Source: https://regulations.justia.com/regulations/fedreg/2012/06/28/2012-15436.html
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Document Index: 466659505

Matched Legal Cases: ['art 71', 'art 71', 'ART 71', 'art 71', '§ 71', 'art 71', 'art 351', 'arts 120', 'art 351', 'ART 351', 'art 351', '§ 351', 'art 351']

Proposed Modification to Regulation Concerning the Use of Market Economy Input Prices in Nonmarket Economy Proceedings, 38553-38556 [2012-15436] :: International Trade Administration :: Department Of Commerce :: Regulation Tracker :: Justia
Justia Regulation Tracker Department Of Commerce International Trade Administration Proposed Modification to Regulation Concerning the Use of Market Economy Input Prices in Nonmarket Economy Proceedings, 38553-38556 [2012-15436]
Proposed Modification to Regulation Concerning the Use of Market Economy Input Prices in Nonmarket Economy Proceedings, 38553-38556 [2012-15436]
Download as PDF Federal Register / Vol. 77, No. 125 / Thursday, June 28, 2012 / Proposed Rules be published subsequently in this Order. The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this proposed regulation; (1) is not a ‘‘significant regulatory action’’ under Executive Order 12866; (2) is not a ‘‘significant rule’’ under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA’s authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106, describes the authority for the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency’s authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would propose controlled airspace at Boise Air Terminal (Gowen Field), Boise, ID. This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1E, ‘‘Environmental Impacts: Policies and Procedures’’ prior to any FAA final regulatory action. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). rmajette on DSK2TPTVN1PROD with PROPOSALS The Proposed Amendment Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR Part 71 as follows: PART 71—DESIGNATION OF CLASS A, B, C, D AND E AIRSPACE AREAS; AIR TRAFFIC SERVICE ROUTES; AND REPORTING POINTS 1. The authority citation for 14 CFR Part 71 continues to read as follows: VerDate Mar<15>2010 15:17 Jun 27, 2012 Jkt 226001 Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959– 1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR Part 71.1 of the Federal Aviation Administration Order 7400.9V, Airspace Designations and Reporting Points, dated August 9, 2011, and effective September 15, 2011 is amended as follows: Paragraph 6003 Class E airspace areas designated as an extension. * * * * * ANM ID E3 Boise, ID [Amended] Boise Air Terminal (Gowen Field), ID (Lat. 43°33′52″ N., long. 116°13′22″ W.) That airspace extending upward from the surface within 3.5 miles each side of the Boise Air Terminal 300° bearing extending from the 5-mile radius of the Boise Air Terminal to 9.5 miles northwest of the airport; and within .5 miles west and 5.6 miles east of the Boise Air Terminal 179° bearing extending from the 5-mile radius of the airport to 6.1 miles south of the airport; and that airspace within 4.3 miles each side of the Boise Air Terminal 114° bearing extending from the 5-mile radius of the airport to 11.7 miles southeast of the airport. Paragraph 6005 Class E airspace areas extending upward from 700 feet or more above the surface of the earth. * * * * * ANM ID E5 Boise, ID [Amended] Boise Air Terminal (Gowen Field), ID (Lat. 43°33′52″ N., long. 116°13′22″ W.) That airspace extending upward from 700 feet above the surface bounded by a line beginning at lat. 43°56′00″ N., long. 116°33′04″ W.; to lat. 43°51′15″ N., long. 116°25′03″ W., thence via the 19.3-mile radius of the Boise Air Terminal (Gowen Field), clockwise to long. 116°14′03″ W.; to lat. 43°45′00″ N., long. 116°14′03″ W.; to lat. 43°31′00″ N., long. 115°52′03″ W.; to lat. 43°20′00″ N., long. 115°58′03″ W.; to lat. 43°25′00″ N., long. 116°25′03″ W.; to lat. 43°27′00″ N., long. 116°29′03″ W.; to lat. 43°25′12″ N., long. 116°32′23″ W.; to lat. 43°29′25″ N., long. 116°37′53″ W.; to lat. 43°32′45″ N., long. 116°49′04″ W.; to lat. 43°37′35″ N., long. 116°47′04″ W.; to lat. 43°42′00″ N., long. 116°57′04″ W., thence to the point of beginning; that airspace extending upward from 1,200 feet above the surface within the 30.5-mile radius of the airport beginning at the 122° bearing of the airport, thence via a line to the intersection of the 34.8-mile radius of the airport and the 224° bearing of the airport, thence clockwise along the 34.8-mile radius of the airport to that airspace 7 miles each side of the 269° bearing of the airport extending from the 34.8-mile radius to 49.6 miles west of the airport, and within 7 miles northeast and 9.6 miles southwest of the 295° bearing of the airport extending from the 34.8-mile radius to 65.3 miles northwest of the airport, to lat. 44°00′27″ N., long. 117°10′58″ W., thence PO 00000 Frm 00018 Fmt 4702 Sfmt 4702 38553 along the 042° bearing to V–253, thence south along V–253, thence along the 30.5mile radius of the airport to the point of beginning; that airspace southeast of the airport extending upward from 9,000 feet MSL bounded on the north by V–444, on the east by V–293, on the south by V–330, on the southwest by V–4 and on the west by the 30.5-mile radius of the airport; that airspace northeast of the airport extending upward from 11,500 feet MSL, bounded on the northeast by V–293, on the south by V–444, on the southwest by the 30.5-mile radius of the airport, and on the west by V–253. Issued in Seattle, Washington, on June 19, 2012. Robert Henry Acting Manager, Operations Support Group, Western Service Center. [FR Doc. 2012–15910 Filed 6–27–12; 8:45 am] BILLING CODE 4910–13–P DEPARTMENT OF COMMERCE International Trade Administration 19 CFR Part 351 Proposed Modification to Regulation Concerning the Use of Market Economy Input Prices in Nonmarket Economy Proceedings Import Administration, International Trade Administration, Department of Commerce. ACTION: Proposed rule; request for comments. AGENCY: The Department of Commerce (‘‘Department’’) proposes to modify its regulation which states that the Department normally will use the price that a nonmarket economy (‘‘NME’’) producer pays to a market economy supplier when a factor of production is purchased from a market economy supplier and paid for in market economy currency, in the calculation of normal value (‘‘NV’’) in antidumping proceedings involving NME countries. The rule, if adopted, would establish (1) a requirement that the input at issue be produced in one or more market economy countries, and (2) a revised threshold requiring that ‘‘substantially all’’ of an input be purchased from one or more market economy suppliers before the Department would use the purchase price paid to value the entire factor of production. Through this proposed modification, the Department is announcing its proposed definition of ‘‘substantially all’’ to be 85 percent of the total purchased volume of the particular input. The Department invites public comment on this proposed change. SUMMARY: E:\FR\FM\28JNP1.SGM 28JNP1 38554 Federal Register / Vol. 77, No. 125 / Thursday, June 28, 2012 / Proposed Rules To be assured of consideration, comments must be received no later than July 30, 2012. ADDRESSES: All comments must be submitted through the Federal eRulemaking Portal at http:// www.Regulations.gov, Docket No. ITA– 2012–0002, and the Department prefers this means of submitting comments. However, if a commenter does not have access to the Internet, as an alternative, he or she may submit the original and two copies of each set of comments by mail or hand delivery/courier. All comments should be addressed to Paul Piquado, Assistant Secretary for Import Administration, Room 1870, Department of Commerce, 14th Street and Constitution Ave. NW., Washington, DC 20230. The comments should be identified by Regulation Identifier Number (RIN) 0625–AA89. The Department will consider all comments received before the close of the comment period. The Department will not accept comments accompanied by a request that part or all of the material be treated confidentially because of its business proprietary nature or for any other reason. All comments responding to this notice will be a matter of public record and will be available for inspection at Import Administration’s Central Records Unit (Room 7046 of the Herbert C. Hoover Building) and online at http:// www.Regulations.gov and on the Department’s Web site at http:// www.trade.gov/ia/. Any questions concerning file formatting, document conversion, access on the Internet, or other electronic filing issues should be addressed to Andrew Lee Beller, Import Administration Webmaster, at (202) 482–0866, email address: webmastersupport@ita.doc.gov. FOR FURTHER INFORMATION CONTACT: Wendy Frankel at (202) 482–5849 or Scott McBride at (202) 482–6292. SUPPLEMENTARY INFORMATION: rmajette on DSK2TPTVN1PROD with PROPOSALS DATES: Background In antidumping proceedings involving NME countries, the Department calculates NV by valuing the NME producer’s factors of production, to the extent possible, using prices from a market economy that is at a comparable level of economic development and that is also a significant producer of comparable merchandise. See section 773(c)(4) of the Tariff Act of 1930, as amended (‘‘the Act’’). The goal of this surrogate factor valuation is to use the ‘‘best available information’’ to determine NV. See section 773(c)(1) of the Act; see also Dorbest Ltd, et al. v. VerDate Mar<15>2010 15:17 Jun 27, 2012 Jkt 226001 United States, 604 F.3d 1363 (Fed. Cir. 2010). Pursuant to 19 CFR 351.408(c)(1), as currently written, when an NME producer purchases inputs from market economy suppliers and pays for those purchases in a market economy currency, the Department normally uses the weighted-average price paid by the NME producer for these inputs to value the input in question, where possible. When a portion of the input is purchased from a market economy supplier and the remainder from a nonmarket economy supplier, the Department will normally use the price paid for the input sourced from market economy suppliers to value all of the input, provided that the volume of the market economy input as a share of total purchases from all sources is ‘‘meaningful.’’ See Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27366 (May 19, 1997); Shakeproof Assembly Components Div. of Ill. Tool Works, Inc. v. United States, 268 F. 3d 1376 (Fed. Cir. 2001). In Antidumping Methodologies: Market Economy Inputs, Expected NonMarket Economy Wages, Duty Drawback; and Request for Comments, 71 FR 61716 (October 19, 2006), the Department instituted a rebuttable presumption that market economy input prices are the best available information for valuing all of an input when the total volume of the input purchased by the respondent from all market economy sources during the period of investigation or review exceeds 33 percent of the total volume of the input purchased from all sources during the period. Under this practice, unless casespecific facts provide adequate grounds to rebut the Department’s presumption, the Department uses the weightedaverage market economy purchase price to value all of the input. Alternatively, when the volume of an NME firm’s purchases of a particular input from market economy suppliers during the period of investigation/review does not exceed this 33 percent threshold, the Department weight-averages the (weighted-average) market economy purchase price and an appropriate surrogate value,1 using as weights the relative quantities of the input imported and purchased from domestic sources. In determining whether market economy purchases meet this 33 percent threshold, the Department compares the volume that the respondent purchased from market economy sources during the period of investigation or review 1 The Department will choose a surrogate value from a market economy country which is at a level of economic development comparable to that of the nonmarket economy country and is a significant producer of comparable merchandise. PO 00000 Frm 00019 Fmt 4702 Sfmt 4702 with the respondent’s total purchases during the period. When a firm has made market economy input purchases that may have been dumped (e.g., the country covered by our proceeding has an antidumping measure on the input from the source country) or from a country that the Department has a ‘‘reason to believe or suspect’’ maintains general export subsidies, are not bona fide, or are otherwise not acceptable for use in a dumping calculation (i.e. if the purchases are from an affiliate and are not made at arm’s length), the Department excludes them from the numerator of the ratio to ensure a fair determination of whether valid market economy purchases meet the 33 percent threshold. The Department now proposes to revise 19 CFR 351.408(c)(1) to establish that where substantially all (i.e., 85 percent or more) of an input is purchased from market economy suppliers (from one or more market economy countries) as a share of total purchases of that input from all sources during a particular period of investigation or review, the Department will normally use the weighted-average purchase price paid to the market economy supplier(s) to value all of the input. When the 85 percent threshold is not met, the Department will weightaverage the market economy purchase price(s) and an appropriate surrogate value, using the respective quantities of the input sourced, from market economy and nonmarket economy suppliers. One reason for this proposed revision is a concern that, when market economy purchases of an input do not account for substantially all purchases of the input (imported and domestically supplied), a market economy input price is not the best available information, particularly since it would not be possible to determine objectively whether the price for the input would have been the same had the firm purchased solely from market economy suppliers. The Department has confidence in the market economy purchase price(s) only when the proportion of the total volume of the input that is sourced from market economies is substantially all (i.e., for purposes of this provision, 85 percent or more) of the total purchases of that particular input. The Department also proposes to add a requirement to 19 CFR 351.408(c)(1) that the market economy input at issue actually be produced in one or more market economy countries, and not just sold through market economy countries, to address concerns that the pricing of an NME-produced input by a market economy supplier (or reseller) can be E:\FR\FM\28JNP1.SGM 28JNP1 Federal Register / Vol. 77, No. 125 / Thursday, June 28, 2012 / Proposed Rules rmajette on DSK2TPTVN1PROD with PROPOSALS distorted by NME cost or supply factors. For example, NME input prices that reflect non-profit objectives or low or suppressed capital, land, energy or other factors of production costs in the NME country can be reflected in, and therefore distort, the prices charged by market economy suppliers or resellers of that input. That is not to say that prices of market economy-produced inputs can never be distorted, but only that they are normally not reflective of systemic, economy-wide distortions, as are NME prices. Explanation of Proposed Modification to 19 CFR 351.408 The second sentence of 19 CFR 351.408(c)(1) states that ‘‘[w]here a factor is purchased from a market economy supplier and paid for in a market economy currency, the Secretary normally will use the price paid to the market economy supplier.’’ The Department proposes modifying the existing sentence and adding two parts to that sentence. First, the Department proposes adding ‘‘produced in one or more market economy countries’’ after ‘‘[w]here a factor is.’’ Second, the Department proposes changing the subsequent clauses to read ‘‘purchased from one or more market economy suppliers and paid for in market economy currency, the Secretary normally will use the price(s) paid to the market economy supplier(s).’’ Third, the Department proposes adding the following to the end of that sentence: ‘‘If substantially all of the total volume of the factor is purchased from one or more market economy suppliers. For purposes of this provision, the Secretary defines the term ‘substantially all’ to be 85 percent or more of the total volume of purchases of the factor used in the production of subject merchandise.’’ We view these additions as necessary to specify which inputs qualify and useful to clearly define the proposed threshold. The current third sentence of 19 CFR 351.408(c)(1) states ‘‘In those instances where a portion of the factor is purchased from a market economy supplier and the remainder from a nonmarket economy supplier, the Secretary normally will value the factor using the price paid to the market economy supplier.’’ The Department proposes deleting ‘‘a portion of the factor’’ from the beginning of that sentence and replacing it with ‘‘less than substantially all of the total volume of the factor.’’ The Department also proposes adding ‘‘produced in one or more market economy countries and’’ before ‘‘purchased from a market economy supplier,’’ and changing the latter clause to read ‘‘purchased from VerDate Mar<15>2010 17:15 Jun 27, 2012 Jkt 226001 one or more market economy suppliers.’’ In addition, the Department proposes deleting ‘‘and the remainder from a nonmarket economy supplier.’’ The Department also proposes deleting ‘‘value the factor using the price paid to the market economy supplier’’ at the end of that sentence. The Department is replacing these passages with ‘‘weightaverage the actual price(s) paid for the market economy portion and the surrogate value for the nonmarket economy portion by their respective quantities.’’ We view these changes as necessary to explain the methodology the Department will use when a respondent purchases less than substantially all of the input from market economy suppliers or only part of the input is produced in one or moremarket economy countries. Classification Executive Order 12866 This rule has been determined to be not significant for purposes of Executive Order 12866. Initial Regulatory Flexibility Act (IRFA) Pursuant to Section 603 of the Regulatory Flexibility Act, the Department has prepared the following IRFA to analyze the potential impact that this proposed rule, if adopted, would have on small entities. Description of the Reasons Why Action Is Being Considered The policy reasons for issuing this proposed rule are discussed in the Background section of this document, and are not repeated here. Statement of the Objectives of, and Legal Basis for, the Proposed Rule; Identification of All Relevant Federal Rules That May Duplicate, Overlap, or Conflict With the Proposed Rule This proposed rule is intended to revise 19 CFR 351.408(c)(1) to establish that in valuing factors of production in antidumping proceedings involving nonmarket economies, if substantially all of an input is purchased from market economy suppliers as a share of total purchases of that input from all sources during the investigation or review period, the Department will use the weighted-average purchase price paid to market economy suppliers to value all of the input. Further, the proposed rule is also intended to add a requirement to 19 CFR 351.408(c)(1) that the market economy input at issue actually be produced in one or more market economy countries, and not just be sold through market economy countries. The legal basis for this rule is 5 U.S.C. 301; 19 U.S.C. 1202 note; 19 U.S.C. 1303 PO 00000 Frm 00020 Fmt 4702 Sfmt 4702 38555 note; and 19 U.S.C. 1671 et seq. No other Federal rules duplicate, overlap or conflict with this proposed rule. Number and Description of Small Entities Regulated by the Proposed Rule The proposed rule regulates entities that are: (1) Producing merchandise in a nonmarket economy that is exported to the United States and is subject to an antidumping duty order; (2) being individually examined in an antidumping proceeding; and (3) claiming that market economy purchase prices should be used to value a factor of production in the calculation of the exporter’s weighted average dumping margin and antidumping duty assessment rate. The resulting antidumping duty assessment rate determines the amount of antidumping duties to be paid by importers of record of the subject merchandise imported into the United States. Entities that produce and export merchandise subject to U.S. antidumping duty orders are rarely U.S. companies. Some producers and exporters of subject merchandise do have U.S. affiliates, some of which may be considered small entities under the appropriate Small Business Administration (SBA) small business size standard. The Department is not able to estimate the number of exporters and producer domestic affiliates that may be considered small entities, but anticipates, based on its experience in these proceedings, that the number will not be substantial. Importers may be U.S. or foreign companies, and some of these entities may be considered small entities under the appropriate SBA small business size standard. There are no means by which the Department can readily determine whether or not a substantial number of small importers will be impacted by this rule, as the effect of the Department’s change in methodology will differ from proceeding to proceeding, on a case-bycase basis, and the importers depositing cash deposits and/or paying antidumping duties will also differ from proceeding to proceeding. Description of the Projected Reporting, Recordkeeping, and Other Compliance Requirements of the Proposed Rule The proposed rule will require exporters or producers to establish on the administrative record that 85 percent or more of an input has been purchased from market economy suppliers from one or more market economy countries as a share of total purchases of that input from all sources (domestic and foreign) during a particular period of investigation or E:\FR\FM\28JNP1.SGM 28JNP1 38556 Federal Register / Vol. 77, No. 125 / Thursday, June 28, 2012 / Proposed Rules rmajette on DSK2TPTVN1PROD with PROPOSALS administrative review, if the exporter or producer wishes the Department to use the weighted-average purchase price paid to the market economy supplier(s) to value all of the input (from all sources). Furthermore, the proposed rule will require that exporters or producers also establish on the administrative record that the market economy input at issue was produced in a market economy, rather than merely being sold through a market economy supplier. There will be no additional reporting or recordkeeping burdens on U.S. importers as a result of this rule. Description of Any Significant Alternatives to the Proposed Rule That Accomplish the Stated Objectives of Applicable Statutes and That Minimize Any Significant Economic Impact of the Proposed Rule on Small Entities As required by 5 U.S.C. 603(c), the Department’s analysis considered significant alternatives. The alternatives which the Department considered are: (1) The preferred alternative of modifying 19 CFR 351.408(c)(1) to (a) establish that if substantially all of an input is purchased from market economy suppliers as a share of total purchases of that input from all sources during the investigation or review period, the Department will use the weighted-average purchase price paid to market economy suppliers to value all of the input and (b) require that the market economy input at issue actually be produced in one or more market economy countries, and not just be sold through market economy countries; (2) modify the regulation with respect to (1)(a), but not (1)(b); (3) modify the regulation with respect to (1)(b), but not (1)(a); or (4) maintain the status quo with respect to the valuation of inputs purchased from a market economy supplier and paid for in a market economy currency. Factors of production for the subject merchandise will be assigned a value in the calculation of the weighted average dumping margin and antidumping duty assessment rate, whether the assigned value is a market economy purchase price, a surrogate value from a market economy country, or a combination of the two. Accordingly, the economic impact of providing information and argument to the Department in relation to the valuation of the factors of production for entities individually examined in the Department’s antidumping proceedings is roughly equivalent under each of the abovenoted alternatives. In relation to the possible impact of the alternatives on the amount of antidumping duties to be paid by VerDate Mar<15>2010 15:17 Jun 27, 2012 Jkt 226001 importers of record of the subject merchandise, the value of a factor of production is one of numerous elements in the calculation of a weighted average margin of dumping. Whether a particular factor value will have any impact on the resulting weighted average dumping margin is not certain. To the extent that a small U.S. importer will be economically impacted by this rule, it will only be through an increase or decrease in the cash deposits and duties posted by that importer as a result in the change of a weighted average dumping margin. In those circumstances where a change in the value of an input as a result of this regulatory modification does have an impact on the weighted average dumping margin, the impact to the small U.S. importer will depend on whether the publicly sourced value is higher or lower than the market economy purchase price(s). In this regard, the Department is required by 19 U.S.C. 1677b(c)(1)(b) to rely on the best information available for valuing the producer’s factors of production. The proposed modification to the regulation addresses the Department’s concerns that a market economy input price may not be the best available information when: (1) Market economy purchases of an input are insufficient in proportion to NME purchases for the Department to objectively conclude that the purchase price for the input would have been the same had the firm purchased solely from market economy suppliers and (2) the reported pricing of an NMEproduced input purchased from a market economy supplier (or reseller) can be distorted by NME cost or supply factors. Accordingly, the Department considers that the first, preferred alternative is the only alternative that fully addresses the Department’s policy concerns explained in the Background section of this Notice. Dated: June 15, 2012. Paul Piquado, Assistant Secretary for Import Administration. Paperwork Reduction Act 22 CFR Parts 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, and 130 This rule 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.) For the reasons stated, 19 CFR part 351 is proposed to be amended as follows: PART 351—ANTIDUMPING AND COUNTERVAILING DUTIES 1. The authority citation for 19 CFR 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. 2. In § 351.408, revise paragraph (c)(1) to read as follows: Information used to value factors. The Secretary normally will use publicly available information to value factors. However, where a factor is produced in one or more market economy countries, purchased from one or more market economy suppliers and paid for in market economy currency, the Secretary normally will use the price(s) paid to the market economy supplier(s) if substantially all of the total volume of the factor is purchased from the market economy supplier(s). For purposes of this provision, the Secretary defines the term ‘‘substantially all’’ to be 85 percent or more of the total purchase volume of the factor used in the production of subject merchandise. In those instances where less than substantially all of the total volume of the factor is produced in one or more market economy countries and purchased from one or more market economy suppliers, the Secretary normally will weight-average the actual price(s) paid for the market economy portion and the surrogate value for the nonmarket economy portion by their respective quantities. [FR Doc. 2012–15436 Filed 6–27–12; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF STATE [Public Notice [7927]] Export Control Reform Transition Plan List of Subjects in 19 CFR Part 351 Correction Administrative practice and procedure, Antidumping, Business and industry, Cheese, Confidential business information, Countervailing duties, Freedom of information, Investigations, Reporting and recordkeeping requirements. In proposed rule document 2012– 15070 appearing on pages 37346–37349 in the issue of Thursday, June 21, 2012 make the following correction: On page 37346, in the third column, in the document’s heading, the CFR parts affected should read ‘‘22 CFR Parts PO 00000 Frm 00021 Fmt 4702 Sfmt 4702 E:\FR\FM\28JNP1.SGM 28JNP1
[Pages 38553-38556]
[FR Doc No: 2012-15436]
Proposed Modification to Regulation Concerning the Use of Market
Economy Input Prices in Nonmarket Economy Proceedings
SUMMARY: The Department of Commerce (``Department'') proposes to modify
its regulation which states that the Department normally will use the
price that a nonmarket economy (``NME'') producer pays to a market
economy supplier when a factor of production is purchased from a market
economy supplier and paid for in market economy currency, in the
calculation of normal value (``NV'') in antidumping proceedings
involving NME countries. The rule, if adopted, would establish (1) a
requirement that the input at issue be produced in one or more market
economy countries, and (2) a revised threshold requiring that
``substantially all'' of an input be purchased from one or more market
economy suppliers before the Department would use the purchase price
paid to value the entire factor of production. Through this proposed
modification, the Department is announcing its proposed definition of
``substantially all'' to be 85 percent of the total purchased volume of
the particular input. The Department invites public comment on this
[[Page 38554]]
later than July 30, 2012.
eRulemaking Portal at http://www.Regulations.gov, Docket No. ITA-2012-
0002, and the Department prefers this means of submitting comments.
However, if a commenter does not have access to the Internet, as an
alternative, he or she may submit the original and two copies of each
set of comments by mail or hand delivery/courier. All comments should
be addressed to Paul Piquado, Assistant Secretary for Import
Administration, Room 1870, Department of Commerce, 14th Street and
Constitution Ave. NW., Washington, DC 20230. The comments should be
identified by Regulation Identifier Number (RIN) 0625-AA89.
FOR FURTHER INFORMATION CONTACT: Wendy Frankel at (202) 482-5849 or
Scott McBride at (202) 482-6292.
calculates NV by valuing the NME producer's factors of production, to
producer of comparable merchandise. See section 773(c)(4) of the Tariff
Act of 1930, as amended (``the Act''). The goal of this surrogate
factor valuation is to use the ``best available information'' to
determine NV. See section 773(c)(1) of the Act; see also Dorbest Ltd,
et al. v. United States, 604 F.3d 1363 (Fed. Cir. 2010). Pursuant to 19
CFR 351.408(c)(1), as currently written, when an NME producer purchases
inputs from market economy suppliers and pays for those purchases in a
market economy currency, the Department normally uses the weighted-
average price paid by the NME producer for these inputs to value the
input in question, where possible. When a portion of the input is
purchased from a market economy supplier and the remainder from a
nonmarket economy supplier, the Department will normally use the price
paid for the input sourced from market economy suppliers to value all
of the input, provided that the volume of the market economy input as a
share of total purchases from all sources is ``meaningful.'' See
27366 (May 19, 1997); Shakeproof Assembly Components Div. of Ill. Tool
Works, Inc. v. United States, 268 F. 3d 1376 (Fed. Cir. 2001).
In Antidumping Methodologies: Market Economy Inputs, Expected Non-
61716 (October 19, 2006), the Department instituted a rebuttable
information for valuing all of an input when the total volume of the
input purchased by the respondent from all market economy sources
during the period of investigation or review exceeds 33 percent of the
Under this practice, unless case-specific facts provide adequate
grounds to rebut the Department's presumption, the Department uses the
weighted-average market economy purchase price to value all of the
input. Alternatively, when the volume of an NME firm's purchases of a
particular input from market economy suppliers during the period of
investigation/review does not exceed this 33 percent threshold, the
Department weight-averages the (weighted-average) market economy
purchase price and an appropriate surrogate value,\1\ using as weights
the relative quantities of the input imported and purchased from
\1\ The Department will choose a surrogate value from a market
economy country which is at a level of economic development
comparable to that of the nonmarket economy country and is a
In determining whether market economy purchases meet this 33
percent threshold, the Department compares the volume that the
respondent purchased from market economy sources during the period of
investigation or review with the respondent's total purchases during
the period. When a firm has made market economy input purchases that
may have been dumped (e.g., the country covered by our proceeding has
an antidumping measure on the input from the source country) or from a
country that the Department has a ``reason to believe or suspect''
maintains general export subsidies, are not bona fide, or are otherwise
not acceptable for use in a dumping calculation (i.e. if the purchases
are from an affiliate and are not made at arm's length), the Department
excludes them from the numerator of the ratio to ensure a fair
The Department now proposes to revise 19 CFR 351.408(c)(1) to
establish that where substantially all (i.e., 85 percent or more) of an
input is purchased from market economy suppliers (from one or more
market economy countries) as a share of total purchases of that input
from all sources during a particular period of investigation or review,
the Department will normally use the weighted-average purchase price
paid to the market economy supplier(s) to value all of the input. When
the 85 percent threshold is not met, the Department will weight-average
the market economy purchase price(s) and an appropriate surrogate
value, using the respective quantities of the input sourced, from
market economy and nonmarket economy suppliers. One reason for this
proposed revision is a concern that, when market economy purchases of
an input do not account for substantially all purchases of the input
(imported and domestically supplied), a market economy input price is
not the best available information, particularly since it would not be
possible to determine objectively whether the price for the input would
have been the same had the firm purchased solely from market economy
suppliers. The Department has confidence in the market economy purchase
price(s) only when the proportion of the total volume of the input that
is sourced from market economies is substantially all (i.e., for
purposes of this provision, 85 percent or more) of the total purchases
of that particular input.
The Department also proposes to add a requirement to 19 CFR
351.408(c)(1) that the market economy input at issue actually be
produced in one or more market economy countries, and not just sold
through market economy countries, to address concerns that the pricing
of an NME-produced input by a market economy supplier (or reseller) can
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distorted by NME cost or supply factors. For example, NME input prices
that reflect non-profit objectives or low or suppressed capital, land,
energy or other factors of production costs in the NME country can be
reflected in, and therefore distort, the prices charged by market
economy suppliers or resellers of that input. That is not to say that
prices of market economy-produced inputs can never be distorted, but
only that they are normally not reflective of systemic, economy-wide
distortions, as are NME prices.
The second sentence of 19 CFR 351.408(c)(1) states that ``[w]here a
factor is purchased from a market economy supplier and paid for in a
market economy currency, the Secretary normally will use the price paid
to the market economy supplier.'' The Department proposes modifying the
existing sentence and adding two parts to that sentence. First, the
Department proposes adding ``produced in one or more market economy
countries'' after ``[w]here a factor is.'' Second, the Department
proposes changing the subsequent clauses to read ``purchased from one
or more market economy suppliers and paid for in market economy
currency, the Secretary normally will use the price(s) paid to the
market economy supplier(s).'' Third, the Department proposes adding the
following to the end of that sentence: ``If substantially all of the
total volume of the factor is purchased from one or more market economy
suppliers. For purposes of this provision, the Secretary defines the
term `substantially all' to be 85 percent or more of the total volume
of purchases of the factor used in the production of subject
merchandise.'' We view these additions as necessary to specify which
inputs qualify and useful to clearly define the proposed threshold.
The current third sentence of 19 CFR 351.408(c)(1) states ``In
those instances where a portion of the factor is purchased from a
market economy supplier and the remainder from a nonmarket economy
supplier, the Secretary normally will value the factor using the price
paid to the market economy supplier.'' The Department proposes deleting
``a portion of the factor'' from the beginning of that sentence and
replacing it with ``less than substantially all of the total volume of
the factor.'' The Department also proposes adding ``produced in one or
more market economy countries and'' before ``purchased from a market
economy supplier,'' and changing the latter clause to read ``purchased
from one or more market economy suppliers.'' In addition, the
Department proposes deleting ``and the remainder from a nonmarket
economy supplier.'' The Department also proposes deleting ``value the
factor using the price paid to the market economy supplier'' at the end
of that sentence. The Department is replacing these passages with
``weight-average the actual price(s) paid for the market economy
portion and the surrogate value for the nonmarket economy portion by
their respective quantities.'' We view these changes as necessary to
explain the methodology the Department will use when a respondent
purchases less than substantially all of the input from market economy
suppliers or only part of the input is produced in one or moremarket
the Background section of this document, and are not repeated here.
Identification of All Relevant Federal Rules That May Duplicate,
This proposed rule is intended to revise 19 CFR 351.408(c)(1) to
establish that in valuing factors of production in antidumping
proceedings involving nonmarket economies, if substantially all of an
input is purchased from market economy suppliers as a share of total
purchases of that input from all sources during the investigation or
review period, the Department will use the weighted-average purchase
price paid to market economy suppliers to value all of the input.
Further, the proposed rule is also intended to add a requirement to 19
CFR 351.408(c)(1) that the market economy input at issue actually be
produced in one or more market economy countries, and not just be sold
through market economy countries.
19 U.S.C. 1303 note; and 19 U.S.C. 1671 et seq. No other Federal rules
duplicate, overlap or conflict with this proposed rule.
The proposed rule regulates entities that are: (1) Producing
merchandise in a nonmarket economy that is exported to the United
States and is subject to an antidumping duty order; (2) being
individually examined in an antidumping proceeding; and (3) claiming
that market economy purchase prices should be used to value a factor of
production in the calculation of the exporter's weighted average
dumping margin and antidumping duty assessment rate. The resulting
antidumping duty assessment rate determines the amount of antidumping
duties to be paid by importers of record of the subject merchandise
Entities that produce and export merchandise subject to U.S.
antidumping duty orders are rarely U.S. companies. Some producers and
exporters of subject merchandise do have U.S. affiliates, some of which
may be considered small entities under the appropriate Small Business
Administration (SBA) small business size standard. The Department is
not able to estimate the number of exporters and producer domestic
affiliates that may be considered small entities, but anticipates,
based on its experience in these proceedings, that the number will not
small business size standard. There are no means by which the
Department can readily determine whether or not a substantial number of
small importers will be impacted by this rule, as the effect of the
Department's change in methodology will differ from proceeding to
proceeding, on a case-by-case basis, and the importers depositing cash
deposits and/or paying antidumping duties will also differ from
proceeding to proceeding.
The proposed rule will require exporters or producers to establish
on the administrative record that 85 percent or more of an input has
been purchased from market economy suppliers from one or more market
economy countries as a share of total purchases of that input from all
sources (domestic and foreign) during a particular period of
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administrative review, if the exporter or producer wishes the
Department to use the weighted-average purchase price paid to the
market economy supplier(s) to value all of the input (from all
sources). Furthermore, the proposed rule will require that exporters or
producers also establish on the administrative record that the market
economy input at issue was produced in a market economy, rather than
merely being sold through a market economy supplier. There will be no
additional reporting or recordkeeping burdens on U.S. importers as a
result of this rule.
Department considered are: (1) The preferred alternative of modifying
19 CFR 351.408(c)(1) to (a) establish that if substantially all of an
price paid to market economy suppliers to value all of the input and
(b) require that the market economy input at issue actually be produced
in one or more market economy countries, and not just be sold through
market economy countries; (2) modify the regulation with respect to
(1)(a), but not (1)(b); (3) modify the regulation with respect to
(1)(b), but not (1)(a); or (4) maintain the status quo with respect to
the valuation of inputs purchased from a market economy supplier and
paid for in a market economy currency.
Factors of production for the subject merchandise will be assigned
a value in the calculation of the weighted average dumping margin and
antidumping duty assessment rate, whether the assigned value is a
market economy purchase price, a surrogate value from a market economy
country, or a combination of the two. Accordingly, the economic impact
of providing information and argument to the Department in relation to
the valuation of the factors of production for entities individually
examined in the Department's antidumping proceedings is roughly
equivalent under each of the above-noted alternatives.
In relation to the possible impact of the alternatives on the
amount of antidumping duties to be paid by importers of record of the
subject merchandise, the value of a factor of production is one of
numerous elements in the calculation of a weighted average margin of
dumping. Whether a particular factor value will have any impact on the
resulting weighted average dumping margin is not certain. To the extent
that a small U.S. importer will be economically impacted by this rule,
it will only be through an increase or decrease in the cash deposits
and duties posted by that importer as a result in the change of a
weighted average dumping margin. In those circumstances where a change
in the value of an input as a result of this regulatory modification
does have an impact on the weighted average dumping margin, the impact
to the small U.S. importer will depend on whether the publicly sourced
value is higher or lower than the market economy purchase price(s).
In this regard, the Department is required by 19 U.S.C.
1677b(c)(1)(b) to rely on the best information available for valuing
the producer's factors of production. The proposed modification to the
regulation addresses the Department's concerns that a market economy
input price may not be the best available information when: (1) Market
economy purchases of an input are insufficient in proportion to NME
purchases for the Department to objectively conclude that the purchase
price for the input would have been the same had the firm purchased
solely from market economy suppliers and (2) the reported pricing of an
NME-produced input purchased from a market economy supplier (or
reseller) can be distorted by NME cost or supply factors. Accordingly,
the Department considers that the first, preferred alternative is the
only alternative that fully addresses the Department's policy concerns
explained in the Background section of this Notice.
2. In Sec.  351.408, revise paragraph (c)(1) to read as follows:
Information used to value factors. The Secretary normally will use
publicly available information to value factors. However, where a
factor is produced in one or more market economy countries, purchased
from one or more market economy suppliers and paid for in market
economy currency, the Secretary normally will use the price(s) paid to
the market economy supplier(s) if substantially all of the total volume
of the factor is purchased from the market economy supplier(s). For
purposes of this provision, the Secretary defines the term
``substantially all'' to be 85 percent or more of the total purchase
volume of the factor used in the production of subject merchandise. In
those instances where less than substantially all of the total volume
of the factor is produced in one or more market economy countries and
purchased from one or more market economy suppliers, the Secretary
normally will weight-average the actual price(s) paid for the market
economy portion and the surrogate value for the nonmarket economy
portion by their respective quantities.