65 FR 35605, June 5, 2000 A-570-822 (China) A-583-820 (Taiwan) Sunset Reviews 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 Expedited Sunset Reviews of the Antidumping Duty Orders on Helical Spring Lock Washers from the People's Republic of China and Taiwan; Final Results Summary We have analyzed the substantive responses of interested parties in the expedited sunset reviews of the antidumping duty orders covering helical spring lock washers ("HSLWs") from the People's Republic of China ("PRC") and Taiwan. We recommend that for our 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 these expedited sunset reviews for which we received substantive responses by parties: 1. Likelihood of continuation or recurrence of dumping Weighted-average dumping margin Volume of imports 2. Magnitude of the margin likely to prevail Margins from investigation History of the Orders PRC The Department issued its final determination of sales at less than fair value ("LTFV") with respect to HSLWs from the PRC on September 20, 1993 (58 FR 48833). In this determination, the Department published six company-specific weighted-average dumping margins of 77.47 percent ad valorem for Hangzhou Spring Washer Plant ("HSWP"), and HSWP via Foreign Trading Companies 1 through 5; in addition, the Department published an "all others" rate of 128.63 percent. On October 19, 1993, the Department issued its antidumping duty order on HSLWs from the PRC (58 FR 53914 (October 19, 1993)). In order to correct ministerial errors made in the margin calculations in the final determination, on November 23, 1993, the Department issued an amendment to the LTFV determination and the antidumping duty order. (1) In this amended determination, the new dumping margins for HSWP, HSWP via IFI Morgan Limited, HSWP via Caraway Development Limited, HSWP via Fastwell Industry Co., Ltd., HSWP via Linkwell Industry Co., Ltd., HSWP via Midway Fasteners, Ltd., HSWP via Sunfast International Corp., and HSWP via Winner Standard Parts Co., Ltd. were all calculated to be 69.88 percent, while the "all others" rate remained unchanged at 128.63 percent. Since the issuance of the order, the Department has completed four administrative reviews. (2) In the first administrative review (covering 1993- 1994), the Department published one company-specific weighted-average dumping margin of 26.08 percent for Zhejiang Wanxin Group Co., Ltd. ("ZWG"), also known as HSWP; in the second (1994-1995) administrative review, the Department calculated a rate of 38.27 percent for ZWG. The Department calculated a margin of 14.15 percent for ZWG in the third (1995-1996) administrative review and a margin of 3.85 percent for ZWG in the fourth (1996-1997) administrative review. The order remains in effect for all known producers/exporters of the subject merchandise from the PRC. To date, the Department has not issued any duty absorption findings in this case. Taiwan The Department published its final determinations of sales at LTFV with respect to HSLWs from Taiwan on May 11, 1993 (58 FR 27709). In this determination, the Department published three company-specific weighted-average dumping margins of 31.93 percent for Spring Lake Enterprises, Ceimiko Industrial, and Par Excellence Industrial, as well as an "all others" rate of 31.93 percent. On June 28, 1993, the Department issued the antidumping duty order on HSLWs from Taiwan (58 FR 34567 (June 28, 1993)). The Department has not conducted any administrative reviews of the order on HSLWs from Taiwan. The order remains in effect for all known producers/exporters of the subject merchandise from Taiwan. To date, the Department has not issued any duty absorption findings in this case. Background On November 2, 1999, the Department initiated sunset reviews of the antidumping duty orders on HSLWs from the PRC and Taiwan (64 FR 59160), pursuant to section 751(c) of the Act. The Department received notices of intent to participate for both reviews on behalf of the Shakeproof Assembly Components Division of Illinois Tool Works, Inc. ("Shakeproof") on November 16, 1999, within the deadline specified in section 351.218(d)(1)(i) of the Sunset Regulations. Pursuant to 19 U.S.C. § 1677(9)(C), Shakeproof claimed interested party status as a domestic producer of a like product. Moreover, Shakeproof stated that it was a petitioner in both of the original antidumping investigations and it has participated in all of the administrative reviews of the PRC order conducted by the Department, including the ones now pending. The Department received complete substantive responses from Shakeproof on December 2, 1999, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i). We did not receive a substantive response from any respondent interested party to these proceedings. As a result, pursuant to 19 CFR 351.218(e)(1)(ii)(C), the Department determined to conduct expedited, 120-day reviews of these orders. In accordance with section 751(c)(5)(C)(v) of the Act, the Department may treat a sunset review as extraordinarily complicated if it is a review of a transition order (i.e., an order in effect on January 1, 1995). These reviews cover transition orders within the meaning of section 751(c)(6)(C)(ii) of the Act. Therefore, on March 6, 2000, the Department determined that the sunset reviews of the antidumping duty orders on HSLWs from the PRC and Taiwan are extraordinarily complicated pursuant to section 751(c)(5)(C)(v) of the Act, and extended the time limit for completion of the final results of these reviews until not later than May 30, 2000, in accordance with section 751(c)(5)(B) of the Act. (3) Discussion of the Issues In accordance with section 751(c)(1) of the Act, the Department conducted these reviews to determine whether revocation of the antidumping duty orders 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 order, and shall provide to the International Trade Commission ("the Commission") the magnitude of the margin of dumping likely to prevail if the order was revoked. Below we address the comments of interested parties. Likelihood of Continuation or Recurrence of Dumping Interested Party Comments PRC In their substantive response, Shakeproof argues that revocation of the antidumping duty order on HSLWs from the PRC would likely result in the continuation or recurrence of dumping. The domestic interested parties argue that the continued existence of dumping margins above de minimis, combined with a significant decline in import volumes since the imposition of the order, demonstrate that dumping is likely to continue or recur if the order is revoked. Specifically, the domestic interested parties, quoting the Sunset Policy Bulletin and the SAA, point out that the Department will normally find that dumping is likely to continue or recur where dumping has continued at any level above de minimis after the imposition of the order. Here, Shakeproof argues that ZWG continues to dump the subject merchandise in the United States. Shakeproof also maintains that although the dumping margins with respect to imports from ZWG have declined in the two most recent administrative reviews conducted by the Department, the new valuation methodology employed by the Department in those reviews is presently being challenged in court by Shakeproof (see December 2, 1999, substantive response of Shakeproof at 6-7). In addition, Shakeproof argues that after the issuance of the order in 1993, imports of the subject merchandise from the PRC dropped significantly. Shakeproof maintains that in 1993, the year following the filing of the dumping petition, imports of HSLWs from the PRC fell to 1.7 million pounds, a decrease of 6.3 million pounds or 78.30 percent (see id. at 6). Shakeproof further argues that in 1995, imports of HWLWs remained low at 1.1 million pounds, which constituted a decrease of 85.87 percent from 1992 (see id. at 6). Shakeproof concludes that the decrease in exports of the subject merchandise reflects the significance of the dumping order and underscores what will happen if the dumping order is revoked. Shakeproof maintains that not only will ZWG sell more in the U.S. market if the order is revoked, but other Chinese producers that have been unable to compete in the U.S. market without dumping will quickly return to the market. Taiwan Shakeproof, in its December 2, 1999, substantive response, argues that revocation of the order on HSLWs from Taiwan would lead to the continuation or recurrence of dumping. Shakeproof argues that although no Taiwanese producer or exporter has requested an administrative review of the order, imports of HSLWs from Taiwan have increased 72.57 percent from 1995 to 1998, proving that there is no basis to determine that imports will not continue to be dumped were the order revoked (see December 2, 1999, substantive response of Shakeproof at 5). Therefore, Shakeproof maintains that the fact that an above de minimis dumping margin remains in place for exports of the subject merchandise from Taiwan demonstrate that dumping would continue or recur if the order were revoked. Department's Determination Drawing on the guidance provided in the legislative history accompanying the Uruguay Round Agreements Act ("URAA"), specifically the Statement of Administrative Action ("SAA"), 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 basis for likelihood determinations. The Department clarified that determinations of likelihood will be made on an order- wide basis (seesection II.A.2 of the Sunset Policy Bulletin). In addition, the Department indicated that it will normally 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 the order would be likely to lead to continuation or recurrence of dumping where an interested party waives its participation in the sunset review. In these instant reviews, the Department did not receive a substantive response from any respondent interested party. Pursuant to section 351.218(d)(2)(iii) of theSunset Regulations, this constitutes a waiver of participation. Consistent with section 752(c) of the Act, the Department considered whether dumping continued at any level above de minimis after the issuance of the orders. In the case of the PRC, an above de minimis dumping margin was calculated for ZWG in all four administrative reviews. The Department has never conducted an administrative review of the order on Taiwanese exports, so dumping margins above de minimis (i.e., the margins calculated in the less-than- fair-value investigation) remain in effect for shipments of the subject merchandise from Taiwan. As discussed in Section II.A.3 of the Sunset Policy Bulletin, the SAA at 890, and the House Report at 63-64, if companies continue to dump with the discipline of an order in place, the Department may reasonably infer that dumping would continue if the discipline were removed. As pointed out above, dumping margins above de minimis continue to exist for shipments of the subject merchandise from the PRC and Taiwan. In addition, consistent with section 752(c) of the Act, the Department also considered the volume of imports of the subject merchandise before and after the issuance of the order. As noted above, Shakeproof argues that a significant decline in the volume of imports of the subject merchandise from the PRC since the imposition of the order provides further evidence that dumping would continue if the orders were revoked. Utilizing U.S. Census data, including IM146 reports, on imports of the subject merchandise from these countries, we agree with Shakeproof's assertions that imports of the subject merchandise from the PRC declined after the order was imposed and have not regained pre-order volumes. (4) As noted above, in conducting its sunset reviews, pursuant to section 752(c) of the Act, the Department considers the weighted-average dumping margins and volume of imports before and after the imposition of the order when determining whether revocation of an antidumping duty order would lead to the continuation or recurrence of dumping. PRC The Department finds that the existence of dumping margins above de minimis levels and a reduction in import volumes after the issuance of the order with respect to the PRC is highly probative of the likelihood of continuation or recurrence of dumping. A deposit rate above a de minimis level continues in effect for imports of the subject merchandise from the PRC. Taiwan The Department finds that the existence of dumping margins above de minimis levels with respect to Taiwan is highly probative of the likelihood of continuation or recurrence of dumping. A deposit rate above a de minimis level continues in effect for imports of the subject merchandise from Taiwan. Therefore, given that dumping has continued over the life of the orders (also, for the PRC, imports of the subject merchandise declined significantly after the imposition of the order), and respondent parties waived participation, absent argument and evidence to the contrary, the Department determines that dumping is likely to continue if these orders were revoked. Magnitude of the Margin Interested Party Comments PRC Shakeproof, in its December 2, 1999, substantive response, recommends forwarding to the Commission the margins of 69.88 percent determined in the original investigation for HSWP and its affiliates and the margin of 128.63 percent for "all others." Taiwan Shakeproof, in its December 2, 1999, substantive response, recommends forwarding to the Commission the margins of 31.93 percent determined in the original investigation for Spring Lake Enterprises, Ceimiko Industrial, Par Excellence Industrial, and "all others" since the Department has not conducted an administrative review of the order. Department's Determination In the Sunset Policy Bulletin, the Department stated that it normally will provide to the Commission the margin that was determined in the final determination in 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.) To date, the Department has not issued any duty-absorption findings in these cases. Concerning the margins for the PRC and Taiwan, the Department agrees with the domestic interested parties. Consistent with the Sunset Policy Bulletin, the Department finds that the margins calculated in the original investigation are probative of the behavior of Chinese and Taiwanese producers and/or exporters if the orders were revoked as they are the only margins which reflect their behavior without the discipline of the order in place. As such, the Department will report to the Commission the rates from the original investigations as contained in the Final Results of Reviews section of this Decision Memo. Final Results of Reviews We determine that revocation of the antidumping duty orders on HSLWs from the PRC and Taiwan would be likely to lead to continuation or recurrence of dumping at the following percentage weighted-average margins: PRC Manufacturer/Exporter Margin (percent) Hangzhou Spring Washer Plant ("HSWP") 69.88 HSWP via IFI Morgan Limited 69.88 HSWP via Carway Development Ltd. 69.88 HSWP via Midway Fasteners Ltd. 69.88 HSWP via Linkwell Industry Co., Ltd. 69.88 HSWP via Fastwell Industry Co., Ltd. 69.88 HSWP via Sunfast International Corp. 69.88 HSWP via Winner Standard Parts Co., Ltd. 69.88 All Others 128.63 Taiwan Manufacturer/Exporter Margin (percent) Spring Lake Enterprises 31.93 Ceimiko Industrial 31.93 Par Excellence Industrial 31.93 All Others 31.93 Recommendation Based on our analysis of the comments received, we recommend adopting all of the above positions. If these recommendations are accepted, we will publish the final results of reviews in the Federal Register. AGREE____ DISAGREE____ _____________________________________________________________________________________ End Notes 1. See Amended Final Determination and Amended Antidumping Duty Order; Certain Helical Spring Lock Washers from the People's Republic of China, 58 FR 61859 (November 23, 1993). 2. See Helical Spring Lock Washers from the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 61 FR 41994 (August 13, 1996); Helical Spring Lock Washers from the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 61 FR 66255 (December 17, 1996);Helical Spring Lock Washers from the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 62 FR 61794 (November 19, 1997); and Helical Spring Lock Washers from the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 64 FR 13401 (March 18, 1999). 3. See Extension of Time Limit for Final Results of Five-Year Reviews, 65 FR 11761 (March 6, 2000). 4. The Department bases this determination on information submitted by Shakeproof in its December 2, 1999, submission, as well as U.S. IM146 Reports, U.S. Department of Commerce statistics, U.S. Department of Treasury statistics, and information obtained from the U.S. International Trade Commission.