65 FR 41434, July 5, 2000 A-570-826 Sunset Review Public Document MEMORANDUM TO: Troy H. Cribb Acting Assistant Secretary for Import Administration FROM: Jeffrey A. May Director Office of Policy SUBJECT: Issues and Decision Memo for the Sunset Review of Paper Clips from the People's Republic of China; Final Results Summary We have analyzed the substantive response of the interested parties participating in the expedited sunset review of the antidumping duty order covering covering paper clips from the People's Republic of China ("PRC"). We recommend that, for our expedited final results, you approve the positions we have developed in the Discussion of the Issues section of this memorandum. Below is the complete list of the issues in this expedited sunset review for which we received substantive response from domestic interested party: 1. Likelihood of continuation or recurrence of dumping: A. Weighted-average dumping margin B. Volume of imports 2. Magnitude of the margin likely to prevail A. Margins from investigation History of Order: The antidumping duty order on paper clips from the PRC was published in the Federal Register on November 25, 1994 (59 FR 60606). (1) In the order, the Department assigned the weighted-average dumping margin of 57.64 percent ad valorem to Shanghai Lansheng Corp. ("Lansheng"), 46.01 percent to Zhejiang Light Industrial Products Import and Export Corp. ("Zhejiang Light"), 60.70 percent to Zhejiang Machinery and Equipment Import and Export Corp. ("Zhejiang Machinery"), and 126.94 percent to all other Chinese producers/exporters of the subject merchandise. The Department has not conducted an administrative review since the issuance of the order. The order remains in effect for all producers and exporters of the subject merchandise. The Department has not conducted any duty-absorption investigations in this proceeding. Background: On December 1, 1999, the Department initiated a sunset review of the antidumping duty order on paper clips from the PRC (64 FR 67247) pursuant to section 751(c)(6)(A)(i) of the Tariff Act of 1930, as amended ("the Act"). On December 13, 1999, we received a Notice of Intent to Participate on behalf of ACCO Brands, Inc. ("ACCO"), a manufacturer of the domestic like product, within the deadline specified in 19 CFR 351.218(d)(1)(i) (1999) ("Sunset Regulations"). In its notice of intent to participate, ACCO indicated that it is not affiliated with a Chinese manufacturer/exporter or related to a U.S. importer of the subject merchandise. We received a complete substantive response on behalf of ACCO on December 21, 1999, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i). As a manufacturer of a domestic like product, ACCO claims an interested-party status under section 771(9)(C) of the Act. ACCO states that it is willing to participate in the instant sunset review and that it has been involved in this proceeding since its inception. We did not receive a substantive response from any respondent interested parties to this proceeding. Consequently, pursuant to section 351.218(e)(1)(ii)(C) of the Sunset Regulations, the Department determined to conduct an expedited, 120-day, sunset review of this order. In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (i.e., an order in effect on January 1, 1995). This review concerns a transition order within the meaning of section 751(c)(6)(C)(ii) of the Act. Therefore, on April 6, 2000, the Department determined that the sunset review of the antidumping duty order on paper clips from the PRC is extraordinarily complicated and extended the time limit for completion of the final results of this review until not later than June 28, 2000, in accordance with section 751(c)(5)(B) of the Act. (2) Discussion of the Issues In accordance with section 751(c)(1) of the Act, the Department conducted this sunset review to determine whether revocation of the antidumping duty order would be likely to lead to continuation or recurrence of dumping. Section 752(c) of the Act provides that, in making this determination, the Department shall consider the weighted-average dumping margins determined in the investigation and subsequent reviews and the volume of imports of the subject merchandise for the period before and the period after the issuance of the antidumping duty order. In addition, section 752(c)(3) of the Act provides that the Department shall provide to the International Trade Commission ("the Commission") the magnitude of the margin of dumping likely to prevail if the order is revoked. Below we address substantive response of the domestic interested party. 1. Likelihood of Continuation or Recurrence of Dumping Interested Party's Substantive Response: ACCO argues that dumping of the subject merchandise will continue or recur should the Department revoke the order. In support of its argument, ACCO contends that Chinese manufacturers/exporters have persisted dumping the subject merchandise at levels above de minimis since the issuance of the order. ACCO also claims that import volumes of the subject merchandise declined after the issuance of the order. (See December 21, 1999, Substantive Response of ACCO at 3 - 5.) With respect to import volumes of the subject merchandise, ACCO argues that, after the imposition of the order, imports of paper clips from the PRC substantially declined. ACCO states that, for example, in 1993, Chinese manufacturers/exporters exported 3,538 tons of paper clips to the United States, whereas, in 1998, the total imports of the subject merchandise decreased to 119 tons - a decline of 97 percent. Id. As to its argument regarding continued dumping of the subject merchandise, ACCO claims that dumping margins have continued to exist since the issuance of the order. Inasmuch as the Department has not conducted an administrative review of any period, ACCO contends that the margins from the investigation, ranging from 46.01 to 126.94 percent, are the prevailing margins. ACCO concludes that, therefore, the Department should not revoke the order because the volume of imports significantly declined and because dumping of the subject merchandise continued at levels above de minimis after the issuance of the order. Id. Department's Position: Drawing on the guidance provided in the legislative history accompanying the Uruguay Round Agreements Act ("URAA"), specifically the Statement of Administrative Action ("the SAA"), H.R. Doc. No. 103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1 (1994), and the Senate Report, S. Rep. No. 103-412 (1994), the Department issued its Sunset Policy Bulletin providing guidance on methodological and analytical issues, including the bases for likelihood determinations. In its Sunset Policy Bulletin, the Department indicated that determinations of likelihood will be made on an order-wide basis. (See section II.A.2.) In addition, the Department indicated that normally it will determine that revocation of an antidumping order is likely to lead to continuation or recurrence of dumping where (a) dumping continued at any level above de minimis after the issuance of the order, (b) imports of the subject merchandise ceased after the issuance of the order, or (c) dumping was eliminated after the issuance of the order and import volumes for the subject merchandise declined significantly. (See section II.A.3.) In addition to considering the guidance on likelihood cited above, section 751(c)(4)(B) of the Act provides that the Department shall conclude that revocation of an order is likely to lead to continuation or recurrence of dumping where a respondent interested party waives its participation in the sunset review. In the instant review, the Department did not receive a response from any respondent interested party. Pursuant to section 351.218(d)(2)(iii) of the Sunset Regulations, this constitutes a waiver of participation. Consistent with section 752(c) of the Act, the Department considered import volumes of the subject merchandise before and after the issuance of the order. According to the United States Census Bureau (Customs Data) IM146 and data from the Commission, since the imposition of the order, import volumes of the subject merchandise have declined substantially. (See Memorandum to File: Regarding Imports for Consumption of the Subject Merchandise in the United States.) In 1992, the year preceding the year in which the antidumping investigation was initiated, the import volume of the subject merchandise was 4,096 metric tons. In the year immediately following the imposition of the order, 1995, the import volume decreased to 1,047 metric tons - a 74 percent decline. Also, between 1995 and 1998, the average annual import volume of the subject merchandise was 402 metric tons - less than 10 percent of the 1992 pre-initiation volume. (3) Therefore, we agree with ACCO that import volumes of the subject merchandise decreased significantly after the issuance of the order. As indicated in section II.A.3 of the Sunset Policy Bulletin, the SAA at 890, and the House Report at 63-64, the Department also considered whether dumping continued at any level above de minimis after the issuance of the order. If companies continue dumping with the discipline of an order in place, the Department may reasonably infer that dumping would continue were the discipline removed. After examining the published findings pertaining to the weighted-average dumping margins in the order and noting that imports of the subject merchandise continued since the imposition of the order, albeit at a substantially reduced level, we agree with ACCO that the weighted-average dumping margins at levels above de minimis have persisted throughout the life of the order. Hence, we determine that dumping of paper clips from the PRC continued after the issuance of the order. Given that dumping continued over the life of the order, that import volumes of the subject merchandise decreased significantly after the issuance of the order, and that the respondent interested parties waived their right to participate in the instant sunset review, we agree with ACCO's contention that dumping is likely to continue or recur if the order is revoked. 2. Magnitude of the Margin Likely to Prevail Interested Party's Substantive Response: In its substantive response, at 5 - 6, ACCO argues that, should the Department revoke the order, the likely-to-prevail dumping margins are those from the original investigation. ACCO contends that the Department should choose the margins from the original investigation because they are the only margins that were ever calculated and because those margins best reflect the behavior of Chinese manufacturers/exporters of paper clips without the discipline of an order in place. Department's Position: In the Sunset Policy Bulletin, the Department stated that it will normally provide to the Commission the margin that was determined in the final determination of the original investigation. Further, for companies not specifically investigated or for companies that did not begin shipping until after the order was issued, the Department normally will provide a margin based on the all-others rate from the investigation. (See section II.B.1 of the Sunset Policy Bulletin.) Exceptions to this policy include the use of a more recently calculated margin, where appropriate, and consideration of duty-absorption determinations. (See sections II.B.2 and 3 of the Sunset Policy Bulletin.) The Department, in its final results of the original investigation, assigned the weighted-average dumping margin 57.64 percent ad valorem to Lansheng, 46.01 percent to Zhejiang Light, 60.70 percent to Zhejiang Machinery, and 126.94 percent to all other Chinese producers/exporters of the subject merchandise. The Department has not conducted any duty- absorption investigations with respect to the subject merchandise. The Department agrees with the domestic interested parties' contention that the likely-to-prevail margins are the ones from the original investigation. Since there has been no administrative review of this order, the margins from the original investigation are the only ones available to the Department. Absent argument and evidence to the contrary, the Department sees no reason to change its usual practice of selecting the rates from the original investigation. Therefore, we determine that the margins from the original investigation are probative of the behavior of Chinese manufacturers/exporters of paper clips without the discipline of the order. Therefore, we will report to the Commission the rates as contained in the Final Results of Review section of this memorandum. Final Results of Review Based on the above analysis, the Department finds that revocation of the antidumping duty order would be likely to lead to continuation or recurrence of dumping at the margins listed below: ----------------------------------------------------------------------- Manufacturer/Exporter Margin (percent) ----------------------------------------------------------------------- Lansheng --------------------------------------------------- 57.64 Zhejiang Light --------------------------------------------- 46.01 Zhejiang Machinery ----------------------------------------- 60.70 PRC-wide -------------------------------------------------- 126.94 ----------------------------------------------------------------------- Recommendation Based on our analysis of the substantive responses received, we recommend adopting all of the above positions. If these recommendations are accepted, we will publish the final results of review in the Federal Register. AGREE____ DISAGREE____ ______________________ Troy H. Cribb Acting Assistant Secretary for Import Administration _____________________ (Date) ______________________________________________________________________ footnotes: 1. See Antidumping Duty Order: Paper Clips From the People's Republic of China, 59 FR 60606 (November 25, 1994). 2. See Extension of Time Limit for Final Results of Five-Year Reviews, 65 FR 18058 (April 6, 2000). 3. The annual imports of the subject merchandise for the period 1995 through 1998 are as follows: 1995 - 1,047, 1996 - 377, 1997 - 64, and 1998 - 119 metric tons.