[Federal Register Volume 64, Number 106 (Thursday, June 3, 1999)]
[Proposed Rules]
[Pages 29818-29821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14098]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
19 CFR Part 351
[Docket No. 990521142-9142-01]
RIN 0625-AA54
Proposed Regulation Concerning the Revocation of Antidumping Duty
Orders
AGENCY: Import Administration, International Trade Administration,
Commerce.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Department of Commerce (the ``Department'' or ``DOC'') is
proposing to amend 19 CFR 351.222(b), which governs the revocation of
antidumping duty orders, in whole or in part, based upon an absence of
dumping. The proposed regulation is intended to conform the existing
regulation to the United States' obligations under Article 11 of the
Agreement on the Implementation of Article VI of the General Agreement
on Tariffs and Trade 1994 (``Antidumping Agreement'' or ``AD
Agreement''). The proposed regulation, if adopted, would allow the
Secretary to revoke an antidumping duty order if the Secretary
concludes that producers or exporters did not sell subject merchandise
at less than normal value for at least three consecutive years and that
the continued application of the antidumping duty order as to those
producers or exporters is no longer necessary to offset dumping.
DATES: To be assured of consideration, written comments must be
received not later than July 6, 1999.
ADDRESSES: A signed original and two copies of each set of comments
including reasons for any recommendation, along with a cover letter
identifying the commenter's name and address, should be submitted to
Robert S. LaRussa, Assistant Secretary for Import Administration,
Central Records Unit, Room 1870, U.S. Department of Commerce,
Pennsylvania Avenue and 14th Street, NW, Washington, DC 20230.
FOR FURTHER INFORMATION CONTACT: Melissa G. Skinner, Office of Policy,
Import Administration, U.S. Department of Commerce, at (202) 482-1560,
or Myles S. Getlan, Office of the Chief Counsel for Import
Administration, U.S. Department of Commerce, at (202) 482-5052.
SUPPLEMENTARY INFORMATION:
Background:
On July 24, 1997, the Department issued the final results of the
third administrative review of the antidumping duty order on Dynamic
Random Access Memory Semiconductors (DRAMs) Of One Megabit Or Above
From Korea (62 FR 39809)(``DRAMs From Korea''), in which the Department
considered the respondents'' request that the Department revoke the
order, in part, under 19 CFR 353.25(a)(1996) (the precursor to 19 CFR
351.222(b)). Pursuant to this regulation, the Department may revoke an
order, in whole or in part, if (1) producers and/or exporters have sold
subject merchandise at not less than normal value for three consecutive
years; and (2) the Secretary concludes that it is not likely that those
producers and/or exporters will in the future sell subject merchandise
at not less than normal value. Applying this regulation in DRAMs From
Korea, the Department did not revoke the order because the second
criterion had not been met.
On January 29, 1999, a panel established by the Dispute Settlement
Body (DSB) of the World Trade Organization (WTO) determined that the
[[Page 29819]]
``not likely'' standard contained in 19 CFR 353.25(a)(2) was
inconsistent with the United States' obligations under Article 11.2 of
the WTO Antidumping Agreement. The panel recommended that the United
States ``bring section 353.25(a)(2)(ii) of the DOC regulations
. . . into conformity with its obligations under Article 11.2 of the AD
Agreement.'' The DSB adopted the panel report on March 19, 1999. On
April 15, 1999, the United States announced its intention to implement
the recommendations and rulings of the DSB. Consistent with section
123(g) of the Uruguay Round Agreements Act, which governs the
Department's implementation of adverse panel reports, the Department is
revising 19 CFR 351.222(b).
Explanation of the Proposed Regulation
Pursuant to 19 CFR Sec. 351.222(b)(1998), the Department may revoke
an antidumping duty order, in its entirety or with respect to certain
exporters or producers, if several criteria are met. In order to revoke
an order, the Secretary must conclude that the exporter or producer has
not sold subject merchandise at less than normal value for three
consecutive years and that ``[i]t is not likely that those persons will
in the future sell the subject merchandise at less than normal value.''
See 19 CFR 351.222(b)(1) and (2).
In its report to the DSB, the Panel considered the consistency of
the ``not likely'' standard described above with the obligations
contained in Article 11.2 of the Antidumping Agreement. See United
States--Anti-Dumping Duty On Dynamic Random Access Memory
Semiconductors (DRAMS) Of One Megabit Or Above From Korea, WT/DS99/R
(adopted March 19, 1999) (``Panel Report''). Article 11.2 of the
Antidumping Agreement provides:
The authorities shall review the need for the continued
imposition of the duty, where warranted, on their own initiative or,
provided that a reasonable period of time has elapsed since the
imposition of the definitive anti-dumping duty, upon request by any
interested party which submits positive information substantiating
the need for a review. Interested parties shall have the right to
request the authorities to examine whether the continued imposition
of the duty is necessary to offset dumping, whether the injury would
be likely to continue to recur if the duty were removed or varied,
or both. If, as a result of the review under this paragraph, the
authorities determine that the anti-dumping duty is no longer
warranted, it shall be terminated immediately.
As demonstrated by the language of Article 11.2, in reviewing the
need for the continued application of an antidumping duty, the
Department is obligated to terminate the duty if the Department
concludes ``that the anti-dumping duty is no longer warranted.'' In
interpreting the obligations contained in Article 11.2, the Panel
concluded that an absence of dumping does not, in and of itself,
require the revocation of an antidumping duty order. See Panel Report
at para. 6.34. Thus, insofar as the Department's regulation requires
exporters or producers requesting revocation to have sold subject
merchandise at not less than normal value for at least three
consecutive years prior to revocation, the Panel concluded that the
Department's regulation is consistent with the United States' WTO
obligations.
The Panel then considered whether requiring a finding that a
recurrence of dumping is ``not likely'' before revoking an order was
consistent with Article 11.2. In this regard, the Panel noted that
Article 11.2 requires authorities ``to examine whether the continued
imposition of the duty is necessary to offset dumping.'' The Panel
described this obligation as follows:
We note that the necessity of the measure is a function of
certain objective conditions being in place, i.e. whether
circumstances require continued imposition of the anti-dumping duty.
That being so, such continued imposition must, in our view, be
essentially dependent on, and therefore assignable to, a foundation
of positive evidence that circumstances demand it. In other words,
the need for the continued imposition of the duty must be
demonstrable on the basis of the evidence adduced.
Panel Report at para. 6.42.
As noted above, the Panel affirmed the Department's ability to
maintain an antidumping duty order in the absence of present dumping,
thus validating the Department's prospective analysis in determining
the need for the continued application of an order. In addition, the
Panel recognized that such a prospective analysis is inherently
uncertain. However, while ``[m]athematical certainty is not required, .
. . the conclusions should be demonstrable on the basis of the evidence
adduced.'' Panel Report at para. 6.43. In this regard, the Panel
determined that the Department's ``not likely'' standard does not
provide a requisite degree of predictive assurance in performing a
prospective analysis nor does it provide ``any demonstrable basis on
which to reliably conclude that the continued imposition of the duty is
necessary to offset dumping.'' Id. at para. 6.50. Thus, the Panel
concluded that the ``not likely'' criterion contained in 19 CFR
353.25(a)(2)(ii) (currently 19 CFR 351.222(b)) is inconsistent with
Article 11.2 of the Antidumping Agreement.
In implementing the Panel's findings with respect to the revocation
regulation, we sought to reform the regulation in a manner that will
require the Department's determination of whether to revoke an order to
be based upon positive evidence. In adopting the Panel Report, we
recognize the Panel's conclusion that the ``not likely'' standard may,
on its face, allow the Department in certain cases to maintain an order
in the absence of positive evidence suggesting the necessity of
maintaining the order to offset dumping. In this regard, we are
confident that the revised standard provides the appropriate degree of
predictive assurance required in a prospective analysis and provides a
demonstrable basis upon which to reliably conclude whether maintaining
the antidumping duty order is warranted.
While the Panel interpreted ``not likely'' on the basis of its
common meaning and usage, the Panel's ruling was not based upon the
Department's application of the standard in DRAMs from Korea or any
other prior case in which the standard was applied. In addition, the
Panel affirmed the Department's prospective analysis in considering
whether to revoke an antidumping duty order. We took these factors into
account in revising the revocation regulation.
The Department's analysis of whether to revoke antidumping duty
orders based upon an absence of dumping has always implicitly addressed
whether the continued application of an antidumping duty order is
necessary to offset dumping. Therefore, since Article 11.2 itself
provides a standard by which to measure the continued applicability of
an antidumping duty order, promulgating an additional standard is not
necessary to fulfill the United States' international obligations.
Stated differently, the requirement contained in Article 11.2 that
authorities examine the necessity of maintaining an antidumping duty
constitutes a transparent, meaningful standard that can be incorporated
into the Department's current statutory and regulatory scheme.
In previous cases, the Department has applied 19 CFR 353.25(a)(2),
now Sec. 351.222(b), in administrative reviews where an exporter or
producer requested revocation and established that it had sold subject
merchandise at not less than normal value for at least three
consecutive years. The Department has consistently considered that an
absence of dumping for three consecutive years was indicative that a
[[Page 29820]]
foreign respondent was ``not likely'' to sell at less than normal value
in the future. Thus, the absence of dumping for three consecutive years
served as a presumption in favor of revoking the order, which could be
rebutted by positive evidence indicating that dumping may recur if the
order were revoked. Such evidence reflected the likelihood that
respondents would dump in the future. In this regard, we note that the
Panel considered that evidence of likelihood of future dumping was
relevant to a determination under Article 11.2, and suggested that one
way to meet the requirements of the Antidumping Agreement would be to
promulgate a standard which required a finding that respondents are
likely to dump in the future before maintaining an order. See Panel
Report at para. 6.48 n. 494.
It is the Department's view that the Panel's findings with respect
to the ``not likely'' standard does not necessitate a wholesale change
in the practice described above. When requested to revoke an
antidumping duty order based upon an absence of dumping for three
consecutive years, the Department intends to continue its practice of
revoking orders in the absence of any other record evidence indicating
that the continued application of the order is necessary to offset
dumping. When additional evidence is placed on the record, the
Department will fully consider all relevant factors as to whether the
continued application of the order is necessary to offset dumping.
Factors considered in prior cases relating to the likelihood of future
dumping would still be deemed relevant under the ``necessary'' standard
derived from Article 11.2 of the Antidumping Agreement. That is, the
Department may consider trends in prices and costs, investment,
currency movements, production capacity, as well as all other market
and economic factors relevant to a particular case. An analysis of this
evidence, we believe, provides a demonstrable basis upon which to
reliably conclude whether the continued application of an antidumping
duty order is necessary to offset dumping and provides the appropriate
degree of predictive assurance required in a prospective analysis.
Effective Date
Pursuant to section 123(g)(2) of the Uruguay Round Agreements Act
(``URAA'')(19 U.S.C. 3533(g)(2)), the final amended regulation may not
become effective until the end of the 60-day period beginning on the
date on which the Department and the Office of the U.S. Trade
Representative undertake consultations with the appropriate
congressional committees concerning the proposed contents of the final
rule. Since the date of consultations has not yet been determined, we
are unable to determine the effective date at this time. If the
proposed regulation is adopted, we will publish the effective date in
the notice of final rulemaking based upon the date on which the Office
of the U.S. Trade Representative and the Department consults with
Congress.
Classification
E.O. 12866
This proposed rule has been determined to be not significant under
E.O. 12866.
Paperwork Reduction Act
This proposed rule contains no new collection of information
subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.
E.O. 12612
This proposed rule does not contain federalism implications
warranting the preparation of a Federalism Assessment.
Regulatory Flexibility Act
The Chief Counsel for Regulation of the Department of Commerce has
certified to the Chief Counsel for Advocacy of the Small Business
Administration that this proposed rule, if adopted, would not have a
significant economic impact on a substantial number of small entities.
The Department's existing regulations provide a procedural and
substantive process by which the Secretary considers whether to revoke
an antidumping duty order. The proposed rule retains the current
procedural process and revises the substantive standard used by the
Secretary to make the appropriate revocation determination. As
discussed above, the proposed regulation would not significantly change
the Department's practice in determining whether to maintain an
antidumping duty order. Moreover, as the proposed regulation only
changes the standard by which the Department considers whether to
revoke an antidumping duty order, this action, in and of itself, will
not have a significant economic impact. Therefore, the Chief Counsel
concluded that the proposed rule would not have a significant impact on
a substantial number of small business entities, and a regulatory
flexibility analysis was not prepared.
List of Subjects in 19 CFR Part 351
Administrative practice and procedure, Antidumping duties, Business
and industry, Cheese, Confidential business information, Countervailing
duties, Investigations, Reporting and recordkeeping requirements.
Dated: May 27, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
For the reasons stated, it is proposed that 19 CFR Sec. 351.222(b)
is amended to read as follows:
PART 351--ANTIDUMPING AND COUNTERVAILING DUTIES
Subpart A--Scope and Definitions
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
2. Section 351.222 is amended by revising paragraph (b) to read as
follows:
Sec. 351.222 Revocation of orders; termination of suspended
investigations
* * * * *
(b) Revocation or termination based on absence of dumping. (1) The
Secretary may revoke an antidumping order or terminate a suspended
antidumping investigation if the Secretary concludes that:
(i) All exporters and producers covered at the time of revocation
by the order or the suspension agreement have sold the subject
merchandise at not less than normal value for a period of at least
three consecutive years; and
(ii) The continued application of the antidumping duty order is no
longer necessary to offset dumping.
(2) The Secretary may revoke an antidumping order in part if the
Secretary concludes that:
(i) One or more exporters or producers covered by the order have
sold the merchandise at not less than normal value for a period of at
least three consecutive years;
(ii) The continued application of the antidumping duty order as to
those persons is no longer necessary to offset dumping; and
(iii) Provided that, for any exporter or producer that the
Secretary previously has determined to have sold the subject
merchandise at less than normal value, the exporter or producer agrees
in writing to its immediate reinstatement
[[Page 29821]]
in the order, as long as any exporter or producer is subject to the
order, if the Secretary concludes that the exporter or producer,
subsequent to the revocation, sold the subject merchandise at less than
normal value.
* * * * *
[FR Doc. 99-14098 Filed 6-2-99; 8:45 am]
BILLING CODE 3510-DS-P