65 FR 60615, October 12, 2000 A-583-824 3rd AR 5/1/98-4/30/99 Public Document IA: I/2 BEL MEMORANDUM TO: Troy H. Cribb Acting Assistant Secretary for Import Administration FROM: Richard W. Moreland Deputy Assistant Secretary for Import Administration SUBJECT: Polyvinyl Alcohol from Taiwan: Issues and Decision Memorandum for the Third Antidumping Duty Administrative Review and Determination Not to Revoke-(Period of Review: May 1, 1998, through April 30, 1999) Summary We have analyzed the comments of the interested parties in the 1998-1999 administrative review of and determination not to revoke the antidumping duty order covering polyvinyl alcohol from Taiwan. Although, we have determined not to revoke the order, we have made one change in the margin calculation as discussed in the "Margin Calculation" section of this memorandum. We recommend that 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 administrative review for which we received comments by parties: 1. Commercial Quantities: a. Applicability of the Commercial Quantities Regulation to Chang Chun's U.S. Sales of Subject Merchandise b. Application of the Commercial Quantities Requirement and the Positive Evidence Rule c. Other Commercial-Quantity-Related Issues 2. Positive Evidence Rule and Factors to Consider in Revoking the Order 3. Ministerial Error Background On June 6, 2000, the Department of Commerce ("the Department") published the preliminary results of the administrative review and intent not to revoke the antidumping duty order on polyvinyl alcohol from Taiwan. See Polyvinyl Alcohol from Taiwan: Preliminary Results of the Third Antidumping Duty Administrative Review and Intent Not to Revoke Order in Part, 65 FR 35896 ("Preliminary Results"). The product covered by this review is polyvinyl alcohol ("PVA"). PVA is a dry, white to cream-colored, water-soluble synthetic polymer. The merchandise under review is currently classifiable under subheading 3905.30.00 of the Harmonized Tariff Schedule of the United States. The period of review ("POR") is May 1, 1998, through April 30, 1999. We invited parties to comment on our preliminary results of review. We held a public hearing on July 20, 2000. Margin Calculations We calculated export price and normal value using the same methodology stated in the Preliminary Results, except as follows: 1. We corrected a unit of measurement conversion for a single U.S. sales transaction based on data contained in verification exhibit one.(1) In the preliminary results, the Department incorrectly tried to convert from pounds to kilograms the variable and total costs of manufacture reported in verification exhibit one for one U.S. sales transaction. Because the correction amounts reported in verification exhibit one were already reported in kilograms, the Department's attempted conversion was not necessary. See Comment 3 below for further discussion. Discussion of the Issues Comment 1a: Applicability of the Commercial Quantities Regulation to Chang Chun's Sales of Subject Merchandise The Respondents' Argument Chang Chun argues that in its Preliminary Results, the Department deviated from its long-standing revocation practice by illegally expanding it to include the commercial quantities requirement. Chang Chun argues that the Department's 1989 amendments to its antidumping duty regulations state that the Department will revoke an antidumping duty order with respect to specific respondents when the following two criteria are satisfied: (i) the producer demonstrated that it did not sell subject merchandise in three consecutive years at less than foreign market value; and (ii) the producer agreed to immediate reinstatement of the antidumping duty order if it breaches its commitment not to dump in the future. Chang Chun states that the commercial quantities requirement was not included in the Department's 1989 amended regulations. In addition, Chang Chun states that the Department's practice has been to revoke antidumping duty orders with respect to respondents that have satisfied the two requirements above, irrespective of their sales volume. Chang Chun cites to a number of cases in which it argues that the Department has revoked the antidumping duty order based solely on the aforementioned 1989 criteria above (see Chang Chun's July 6, 2000, case brief ("Chang Chun case brief") at page 15). Chang Chun argues that neither the Uruguay Round Agreement's Act ("URAA"), nor the Department's 1997 amendments-in conformance with the URAA-to its regulations have changed the 1989 requirements for revocation. Chang Chun states that the Department's final regulations of 19 C.F.R. § 351.222(b) (1997) did not change the requirements for revocation based on an absence of dumping.(2) Thus, Chang Chun maintains that the Department has no basis to deviate from its 1989 regulations concerning respondents that have three consecutive administrative reviews without dumping. Chang Chun states that the application of the commercial quantities requirement to its sales during this proceeding is an impermissible expansion of the existing regulations because Chang Chun has had three consecutive administrative reviews without dumping. Chang Chun maintains that the Department has incorrectly applied the commercial quantities requirement of 19 C.F.R. § 351.222(e) in this case, despite the fact that Chang Chun has had three consecutive administrative reviews without dumping. Chang Chun states that the commercial quantities requirement of 351.222(e) is not applicable in this case because the commercial quantities requirement is intended to apply only in instances where there are unreviewed or intervening years (i.e., for parties that have not participated in three consecutive administrative reviews). Chang Chun argues that only 19 C.F.R. § 351.222(b) sets forth elements that the Department may consider in determining whether to revoke an antidumping order with respect to a specific producer that has participated in three consecutive reviews, and this section of the regulations does not include a requirement that sales be made in commercial quantities. Additionally, Chang Chun argues that 19 C.F.R. § 351.222(d)(1) further demonstrates that the commercial quantities requirement is not applicable in this instance because it states that "the Department established a new procedure under which a review of an 'intervening year' would not be necessary if . . . the Secretary is satisfied that during the unreviewed intervening years there were exports to the United States in commercial quantities."(3) Chang Chun argues that this specific language of the commercial quantities requirement clarifies that the language is applicable only to a respondent who did not participate in an administrative review in an intervening year. Finally, Chang Chun states that the Department's explanation of 19 C.F.R. § 351.222(e) in its proposed rule making(4) further clarifies that the provisions for commercial quantity certification were added as a requirement for revocation explicitly to address problems stemming from an unreviewed intervening year. Thus, Chang Chun maintains that an assessment of commercial quantities is irrelevant to a revocation determination in which the Department had conducted three consecutive administrative reviews. Therefore, Chang Chun contends that the Department should revoke the antidumping duty order with respect to PVA that it produces and exports. The Petitioner's Argument The petitioner states that Chang Chun's assertion that case precedent does not call for the Department to apply the commercial quantities requirement in this review, is based on misplaced reliance on decisions made under the regulation before it was amended in 1997 to include the threshold requirement. On May 19, 1997, the Department issued its revised regulations which included the revocation language on commercial quantities, a threshold requirement, that is applicable to all respondents seeking revocation, in part, of an antidumping duty order.(5) The petitioner states that the Department added the threshold commercial quantities requirement to that regulation to ensure that the information it relies on to determine revocation is reflective of a company's normal commercial experience. The petitioner argues that the Department must ascertain that the company seeking revocation has continued to participate meaningfully in the U.S. market during each of the three years on which revocation is based. Thus, the petitioner argues that the commercial quantities requirement was introduced in the revised regulation, and that the Department has consistently applied it as a threshold requirement in its revocation decisions under the revised regulation. The petitioner also argues that Chang Chun's claim that the commercial quantities requirement applies only to non-reviewed, intervening years ignores the plain language of the regulation and the Department's past rejection of this position. The petitioner argues that the language of the regulation states that the Secretary must be satisfied that exports were in commercial quantities in each of the consecutive years under review. The petitioner states that this language ensures that the commercial quantities requirement applies to years that have had reviews because revocation is precluded unless the Secretary conducted reviews in at least two of those years (i.e., the first and last years). Additionally, the petitioner argues that the Department's revocation determinations have consistently applied commercial quantities as a threshold requirement ever since the regulation was revised in 1997. Thus, the petitioner contends that the application of the commercial quantities requirement to Chang Chun is not an expansion of the Department's precedent or law. Finally, citing to Pure Magnesium from Canada and Pure Magnesium from Canada-2,(6) the petitioner argues that the Department has previously rejected the argument that the commercial quantities threshold applies only to intervening years. DOC Position We disagree with Chang Chun's claim that the commercial quantities requirement applies only to non-reviewed, intervening years and that application of the requirement to its sales is an impermissible expansion of the existing regulations. Chang Chun's arguments ignore the plain language of the regulation and the Department's past rejection of this position. Commercial quantities is a threshold requirement applicable to all respondents seeking revocation, in part, of an antidumping duty order. Specifically, 19 C.F.R. § 351.222(e)(1) requires that a respondent seeking revocation certify that inter alia, in each of the three years at issue they sold the subject merchandise to the United States in commercial quantities. See 19 C.F.R. § 351.222(e)(1)(ii). Furthermore, 19 C.F.R. § 351.222(d)(1) provides that: [B]efore revoking an order . . . . the Secretary must be satisfied that, during each of the three . . . . years, there were exports to the United States in commercial quantities of the subject merchandise to which a revocation . . . . will apply. The threshold requirement that there be exports to the U.S. in commercial quantities, therefore, explicitly applies in each of the three years encompassed in the request for revocation. This language was added in the Department's revised regulations issued in 1997 which govern this administrative review and request for revocation. See 19 C.F.R. § 351.222(d)(1) and 351.701 (1999) and Final Rule., 62 FR at 27325 and 27378 and 27416.(7) Moreover, the Department has previously rejected the argument that the commercial quantities threshold requirement is only applicable to intervening years because of the language of the heading of 19 C.F.R. § 351.222(d). In previous case decisions, the Department has stated the following regarding the intervening year argument: [W]hile the regulation requiring sales in commercial quantities may have developed from the unreviewed intervening year regulation, its application in all revocation cases based on the absence of dumping is reasonable and mandated by the regulations. The application of this requirement to all such cases is reflected not only in the provision for unreviewed intervening years (see 19 C.F.R. 351.222 (d)(1)), but also in the new general requirement that parties seeking revocation certify to sales in commercial quantities in each of the years on which revocation is to be based. See 19 C.F.R. 351.222(e)(1) (ii). This requirement ensures that the Department's revocation determination is based upon a sufficient breadth of information regarding a company's normal commercial practice. . . regardless of whether we conducted a review or the sales took place in an intervening year. See Pure Magnesium from Canada, 64 FR at 1279, Pure Magnesium from Canada- 2, 64 FR at 50491, and Pure Magnesium from Canada-3(8) 65 FR at 55504. In other words, the assessment of commercial quantities is a threshold issue to any request for a revocation review. When a respondent is not meaningfully participating in the U.S. market (i.e., selling at below commercial quantities), the Department is not able to establish the respondent's ability to compete in the U.S. market without the discipline of the antidumping duty order. Thus, without commercial quantities the Department lacks a basis upon which to evaluate whether revocation of an order, with respect to that respondent, is appropriate. In sum, the Secretary must be satisfied that exports were in commercial quantities in each of the consecutive years under review. This language ensures that the commercial quantities requirement applies to years that have had reviews because revocation is precluded unless the Secretary conducted reviews in at least two of those years (i.e., the first and last years). Thus, the application of the commercial quantities requirement to Chang Chun is not an expansion of our precedent or law, but rather consistent with agency practice. Comment 1b: Application of the Commercial Quantities Requirement and the Positive Evidence Rule The Respondents' Argument Chang Chun argues that the Department erroneously applied the prior regulations of 19 C.F.R. § 351.222(b), which ceased to be effective as of November 1, 1999. Chang Chun states that the Department should base its final results on the correct regulations regarding revocation and its standards. Chang Chun also states that the Department's reliance on Silicon Metal from Brazil(9) in the Preliminary Results exhibits an inconsistency with the positive evidence rule. Chang Chun claims that the Department's decision in Silicon Metal from Brazil was based on the "not- likely" standard in the prior regulations, rather than the more current positive evidence rule which is appropriate for purposes of determining the final results of this administrative review. Thus, Chang Chun states that the Department should have applied the standard of "whether the continued application of the order is necessary to offset dumping" and the positive evidence rule. Additionally, Chang Chun argues that the Department's application of the commercial quantities requirement is contrary to the positive evidence rule that was adopted by the Department before the initiation of this administrative review. Chang Chun states that, on January 29, 1999, the panel of the Dispute Settlement body of the World Trade Organization ("WTO") Antidumping Agreement determined that the "not-likely" standard, which requires substantive evidence to show the continued application of an antidumping duty order is not necessary to offset dumping, is inconsistent with the WTO Antidumping Agreement.(10) Thus, Chang Chun argues that the Department is obligated to revoke the antidumping duty order with respect to Chang Chun unless positive evidence indicates the necessity of the continuation of the order. Finally, Chang Chun argues that the positive evidence rule prohibits the Department from continued application of an order simply because a producer sold a small quantity of subject merchandise at normal value. Chang Chun argues that any sale at normal value can only positively show that the producer was able to sell the subject merchandise without dumping. Chang Chun states that the positive evidence rule requires the Department to revoke the order unless positive evidence indicates that the continuation of the order is necessary. Chang Chun reasons that its ability to sell a certain volume of subject merchandise to the United States with de minimis dumping duty margins during the second POR can only positively evidence that it was able to sell the subject merchandise at normal value during the period. Thus, Chang Chun argues that the Department's Preliminary Results fail the positive evidence rule. The Petitioner's Argument The petitioner states that the Department's application of the threshold commercial quantities requirement in this case does not violate the positive evidence rule nor the 1999 revision of the revocation regulation that incorporates this rule. The petitioner argues that when the Department revised the revocation regulations in 1999, it explicitly stated that the revision did not affect the threshold commercial quantities requirement. Also, the petitioner states that the Department has found that the commercial quantities threshold is consistent with the WTO ruling and Article 11.2 of the WTO Antidumping Agreement. Citing to Pure Magnesium from Canada-2,(11) the petitioner states that under the Department's regulations, three years of sales in commercial quantities at not less than normal value is the minimum evidence required to establish that a revocation review is warranted and that the commercial quantities requirement is consistent with the WTO Antidumping Agreement. The petitioner states that the Department should confirm its Preliminary Results and continue to find that the threshold commercial quantities requirement applies to Chang Chun in this proceeding. DOC Position We disagree with Chang Chun. As discussed in "Comment 1a." above, commercial quantities is a threshold requirement applicable to all respondents seeking revocation. See 19 C.F.R. 351.222(e)(1) (listing the required certifications for revocation, including sales in commercial quantities in each of the three years at issue). Furthermore, although the Department revised its revocation regulation in 1999, we explicitly stated that the revisions did not affect the threshold commercial quantities requirement. Specifically, the preamble of the Revocation Final Rule(12) states: We disagree with those commenters who suggest that the revised regulation continues to place a burden on respondents, rather than the Department, to prove eligibility for revocation. The threshold requirement for revocation continues to be that respondents not sell at less than normal value for at least three consecutive years, and that, during each of those years respondents exported subject merchandise to the United States in commercial quantities. See 19 C.F.R. 351.222(d)(1). Also, as the Department notes in the preamble, the WTO panel reviewing the Dynamic Random Access Memory Semiconductor ("DRAMs") case whose findings were the impetus for the revisions to the Department's existing regulations, did not disturb the commercial quantities aspect of the Department's revocation practice. See Revocation Final Rule, 64 FR at 51238. Chang Chun's arguments are based on a mischaracterization of the commercial quantities requirement as something other than a threshold requirement and are thus in error. Unless a respondent has demonstrated the ability to participate in the U.S. market in a commercially meaningful way without dumping with the discipline of the order, it is not necessary to consider whether the respondent could do so without the discipline of the order (i.e., the order remains necessary to offset dumping).(13) Because Chang Chun failed to make sales of PVA in the U.S. in commercial quantities during all three years, we cannot consider whether Chang Chun has demonstrated an ability to compete in the U.S. market without the discipline of the antidumping duty order. Thus, the Department lacks a basis upon which to evaluate whether revocation of the order with respect to Chang Chun is appropriate. The positive evidence rule and consideration of whether the continued application of the order is necessary offset dumping is not implicated where a respondent, like Chang Chun, fails to meet the threshold commercial quantities requirement. Comment 1c: Other Commercial-Quantity-Related Issues The Respondents' Argument Chang Chun argues even if the Department finds that commercial quantities threshold requirement is applicable in this case, the Department has applied the commercial quantities requirement to Chang Chun in a manner inconsistent with its own definition. Chang Chun argues that as part of the preamble accompanying the Final Rule and as acknowledged in prior revocation decisions, the Department defined commercial quantities in terms of individual sales. In addition, citing to Color Television Receivers from Taiwan,(14) Chang Chun argues that commercial quantities refers to the size of a particular shipment or sale. Chang Chun argues that there is no requirement in the Department's regulations that a company maintain a certain market share or sales volume after imposition of an antidumping duty order in order to qualify for revocation. Chang Chun argues that because the Preliminary Results were based on the total volume of sales it is contrary to the Department's own definition of commercial quantities. Therefore, Chang Chun contends that the Department should measure commercial quantities based on the sizes of transactions. Even if the Department applies a volume-based commercial quantities standard, Chang Chun states that during the second POR its U.S. sales of subject merchandise were in commercial quantities based on the absolute volume and total number of its transactions. Chang Chun argues that in prior decisions involving commercial quantities, the Department has considered three factors, which include the absolute volume of sales, the number of transactions, and the comparative sales volume of the POR in relation with the POI. Chang Chun states that the record evidence shows that it has sold subject merchandise in commercial quantities in terms of all three of these factors-citing to Pure Magnesium from Canada-2, PECTs from Japan,(15) Brass Sheet and Strip from the Netherlands,(16) Silicon Metal from Brazil, and Carbon Steel from Canada-2.(17) In particular, Chang Chun states that the record evidence establishes that its normal quantity for a sales transaction is one shipping container of subject merchandise. Chang Chun argues that it made more than 30 transactions during the second period of review and that the average size, in kilograms, of each sale constituted commercial quantities. Thus, Chang Chun maintains that its total quantity of subject merchandise sales during the second POR (i.e., 4.59 percent of the volume of sales in the POI and over 30 sales transactions during the second POR) were made in commercial quantities in accordance with the Department's own definition. Chang Chun argues that the Department's case-by-case standard also warrants revocation of the antidumping duty order with respect to subject merchandise that is produced and exported by Chang Chun. Chang Chun states that the case-by-case standard requires the Department to make a meaningful comparison of its sales volumes by considering any external economic factor which existed during the second POR, but did not exist during the POI. Chang Chun argues that the prohibitively high antidumping duty deposit requirement made the simple comparison of sales volumes between the POI and the second POR meaningless for application of the commercial quantities threshold requirement. Chang Chun argues that the antidumping duty cash deposit, which was ultimately refunded, imposed a severe burden on its importers until June 16, 1998, the publication date of the final results in the first administrative review of the order on polyvinyl alcohol from Taiwan.(18) Thus, Chang Chun contends that the case- by-case analysis requires the Department not to use the comparative sales volumes for purposes of determining whether its sales were made in commercial quantities. In addition, Chang Chun states that if the Department decides to continue with this comparison (i.e., POI sales volumes vs. second POR sales volumes), the Department should then adjust Chang Chun's second POR sales volume by excluding the effects of the refunded antidumping duty deposits. Finally, Chang Chun states that the petitioner concedes in its revocation submissions made prior to the Preliminary Results that Chang Chun sold subject merchandise in significant quantities during its three administrative reviews. Specifically, Chang Chun states that the petitioner admitted that Chang Chun's U.S. sales of subject merchandise during the last three review periods "are not insignificant."(19) In addition, Chang Chun argues that the petitioner did not object to Chang Chun's comments that its U.S. sales of subject merchandise were made in commercial quantities. Chang Chun argues that the petitioner's admission further supports its arguments that the Department should find that Chang Chun's second POR sales were made in commercial quantities. The Petitioner's Argument Citing to Carbon Steel from Canada-2 at 9249, the petitioner states that case precedent has previously rejected claims that the commercial quantities requirement should be based on size of the individual sales. The petitioner states that Chang Chun's characterization of the Department's three standards for commercial quantities examination (i.e., absolute volume, number of transactions, and comparative sales volume) is incorrect. Citing to Brass Sheet and Strip from the Netherlands, 65 FR at 750, PECTs from Japan, 64 FR at 71416, Silicon Metal from Brazil, 65 FR at 7498, and Pure Magnesium from Canada, 64 FR at 12979, the petitioner also argues that the Department-absent unique circumstances or natural disasters-will generally find that sales were not made in commercial quantities when sales are of an abnormally small quantity, either in absolute terms or in comparison to an appropriate benchmark period, because they do not generally provide a reasonable basis for determining that the discipline of the order is necessary to offset dumping. Thus, the petitioner states, in light of the evidence in this case (i.e., Chang Chun's sales quantity during the second POR is 4.59 percent of its POI sales quantity), Chang Chun is ineligible for revocation. The petitioner argues that the Department has treated Chang Chun's request for revocation on a case-by-case basis. Thus, the petitioner agrees that the Department correctly found that Chang Chun failed to participate meaningfully in the U.S. market during the second POR. The petitioner states that Chang Chun has not offered any compelling evidence showing the type of unusual occurrence that the Department would consider in its commercial quantities determinations, thereby making Chang Chun's reliance on PECTs from Japan unconvincing. In this proceeding, Chang Chun proffered the antidumping duty deposits as the main reason for its reduction in its U.S. sales quantities during the second POR. However, the petitioner maintains that the cash deposit is a consequence of virtually every antidumping duty order and cannot qualify as the type of unusual occurrence that would give the Department justification to reverse its commercial quantities determination in the Preliminary Results of this segment of this proceeding. Thus, the petitioner argues, the Department should maintain a standard commercial quantities analysis and deny Chang Chun's request for a revocation review. Finally, the petitioner argues that it neither admitted nor acquiesced to Chang Chun's claim of satisfying the commercial quantities requirement. According to the petitioner, the purported admission that Chang Chun's sales were "not insignificant" is immaterial to Chang Chun's satisfaction of the commercial quantities threshold requirement. The petitioner argues that its statement, taken in its entirety, and its continued participation in this segment of this proceeding illustrates its lack of acquiescence to Chang Chun's assertion of satisfying the commercial quantities requirement. DOC Position We disagree with Chang Chun that the Department has applied the commercial quantities requirement in a manner inconsistent with its past practice and regulations. In addition, we disagree with Chang Chun's assertion that the Department has defined commercial quantities as specifically referring to the size of individual sales (which is not included in the preamble of the Final Rule, the preamble of our Proposed Rule,(20) or codified in our past practice). On the contrary, absent an extraordinary occurrence which would cause the Department to consider other measures of commercial quantities (e.g., PECTs from Japan, 64 FR at 71416), it has been the Department's practice to examine the aggregate volume of total sales to the United States (in absolute terms and in comparison with the POI or other appropriate benchmark period) in determining whether sales have been made in commercial quantities.(21) Furthermore, Chang Chun's reliance on Color Television Receivers from Taiwan, stating that commercial quantities refers to the size of a particular shipment or sale, is misplaced. The remand dealt with the term commercial quantities for purposes of determining whether sales to a specific subsidiary constituted fictitious sales in the context of the final results of an administrative review in which revocation was not being considered. Thus, the discussion to which Chang Chun refers is not necessarily applicable to a revocation determination. Additionally, the Department previously rejected this argument in Pure Magnesium from Canada- 3, stating: [I]n order to determine whether NHCI is selling subject merchandise to the United States in commercial quantities, our analysis in this revocation review properly focuses on aggregate sales to the United States rather than the size of individual shipments. This is because in order to determine whether the absence of margins is meaningful, we must be satisfied that the margins were calculated on a suitable aggregate quantity. A producer or exporter cannot be said to be making sales in commercial quantities where the current overall level of sales are so small just because the handful of shipments made were in the same lot sizes as those during the benchmark period. If this were the standard, the Department could not reasonably conclude that, without the discipline of the order, NHCI can participate in the U.S. market without selling at less than NV. See Pure Magnesium from Canada-3 and accompanying Decision Memorandum at Comment 6: Benchmarks Used to Determine Commercial Quantities. Chang Chun's reliance on Silicon Metal from Brazil is out of context as well. While the Department analyzed the size of individual sales transactions in that case, the commercial quantities determination was based ultimately on the respondent's small aggregate sales (i.e., two percent of the POI sales) and significantly smaller number of sales transactions during the POR in question (see Silicon Metal from Brazil, 65 FR at 7498). Thus, the Department generally will find that sales were not made in commercial quantities when sales are of an abnormally small quantity, either in absolute terms or in comparison to an appropriate benchmark period, because they do not generally provide a reasonable basis for determining that the discipline of the order is necessary to offset dumping.(22) We also disagree with Chang Chun's characterization of the Department's three standards for commercial quantities examination (i.e., absolute volume, number of transactions, and comparative sales volume). Revocation determinations are particularly fact-intensive and industry-/company- specific, and the Department's practice has been to make its revocation determinations on a case-by-case basis. Thus, the Department's commercial quantities analysis could conceivably include the consideration of all or none of the aforementioned factors (i.e., absolute volume, number of transactions, and comparative sales volume). However, our commercial quantities analysis and practice has considered the relative importance of these factors, as applicable, on a case-by-case basis with a particular focus on the comparative sales volume during the PORs in question and the POI. Commercial quantities have not be found where aggregate sales are determined to be of an abnormally small quantity, either in absolute terms or in comparison to an appropriate benchmark period, because there was not a sufficient breadth of information regarding a company's normal commercial practice.(23) We have treated Chang Chun's request for revocation on a case-specific basis. With respect to Chang Chun's argument that it has made more than 30 U.S. sales transactions of subject merchandise during the POR, we consider the number of transactions to be insignificant when one considers that Chang Chun made several hundred sales transactions during the POI. However, the more telling factor illustrating that Chang Chun did not participate meaningfully in the U.S. market during the second POR is that its sales volume during the second POR is 4.59 percent of its POI sales volume. Therefore, we find that Chang Chun's sales to the U.S. during the second POR were not made in commercial quantities in accordance with the Department's regulatory requirement. Furthermore, Chang Chun has offered no compelling evidence showing the type of unusual occurrence that we would consider in our commercial quantities determination, thereby making Chang Chun's reliance on PECTs from Japan inappropriate. In this proceeding, Chang Chun explained that its low level of sales during the second POR were primarily due to the antidumping duty deposit rate its importers were required to make until the final results of the first antidumping duty administrative review of PVA from Taiwan were published. In the less-than-fair-value investigation on PVA from Taiwan, the Department calculated a 19.21 dumping margin for Chang Chun.(24) We subsequently instructed the U.S. Customs Service to collect cash deposits for imports of Chang Chun's PVA at the 19.21 percent ad valorem rate. Contrary to Chang Chun's arguments, however, a cash deposit rate does not qualify as the type of unusual occurrence that the Department might accept as appropriate rationale for reduced sales volume. Therefore, the purported effects of the antidumping duty deposits do not impact our commercial quantities analysis. Thus, we see no reason to change from out preliminary results in this administrative review that Chang Chun's U.S. sales during the second POR were not made in commercial quantities. Comment 2: Positive Evidence Rule and Factors to Consider in Revoking the Order The Respondents' Argument Having argued that it has made sales in commercial quantities, Chang Chun argues that the continued application of the antidumping duty order is no longer necessary to offset dumping. Chang Chun further argues that the Department erroneously did not consider whether the continued application of the antidumping duty order is necessary to offset dumping. Chang Chun argues that all the record evidence shows that it will not sell subject merchandise at less than normal value in the future. Chang Chun states that: 1. The world-wide market for PVA has been growing; 2. Chang Chun does not currently have the capacity to supply additional sales to the United States; and 3. Chang Chun's sales to the United States were not at less than normal value even when demand was weaker. Thus, there is no positive evidence showing that Chang Chun will resume dumping if the order is revoked and the continued application of the antidumping duty order is not necessary to offset dumping. Finally, Chang Chun argues that sales of non-subject merchandise are irrelevant to this revocation determination. Chang Chun maintains that the question at issue is whether it is able to sell subject merchandise in the United States without dumping. Additionally, Chang Chun argues that the petitioner's statements are based on the assumption that the subject merchandise is substitutable with non-subject PVA which is inconsistent with previous arguments the petitioner made in its less-than-fair-value investigation petition. Specifically, Chang Chun states that the petitioner argued in its petition that non-subject PVA is a separate product with little, if any, interchangeability in uses and different channels of distribution. The Petitioner's Argument The petitioner states that upon determining that Chang Chun failed to satisfy the threshold commercial quantities requirement, the Department properly refused to proceed to the substantive analysis of the criteria set out in 19 C.F.R. § 351.222(b)(2). In accordance with a consistent line of precedent, the petitioner contends that, Chang Chun's inability to satisfy the Department's threshold requirement made it ineligible for revocation. In addition, the petitioner points out that any further analysis of the factors would have served no purpose. However, the petitioner states that had the Department proceeded to the substantive considerations under 19 C.F.R. § 351.222(b)(2), it would have determined that the continued application of the antidumping duty order is necessary to offset dumping. The petitioner states that: 1. Chang Chun's sales during the three PORs were substantially less than what it sold during the POI; 2. Chang Chun maintained market share by selling non-subject PVA to U.S. customers that could substitute non-subject PVA for subject merchandise; 3. Chang Chun increased its sales of subject PVA and decreased its sales of non-subject PVA after the third POR; 4. There is a world-wide surplus of subject merchandise production capacity; and 5. Chang Chun is increasing its production capacity. Finally, the petitioner argues that Chang Chun's history of non-subject merchandise sales is an important consideration for purposes of revocation. The petitioner argues that Chang Chun had changed its U.S. product mix by substituting/increasing sales of non-subject merchandise PVA for sales of subject merchandise PVA since the imposition of the order. The petitioner states that Chang Chun's levels of subject PVA and non-subject PVA sales illustrates Chang Chun's inability to compete in the U.S. market without dumping. DOC Position Because Chang Chun has not met the commercial quantities requirement, we have not examined the issue as to whether the continued application of the antidumping duty order is necessary to offset dumping (see Silicon Metal from Brazil, 65 FR at 7504). Comment 3: Ministerial Error The Respondents' Argument Chang Chun requests that the Department adjust the dumping margin calculation in its final determination by incorporating a correction for an error with respect to the total and variable costs of manufacture reported for a single sales observation in the U.S. sales listing. Chang Chun argues that the Department incorrectly tried to convert the unit of measurement of the reported costs from pounds to kilograms because the corrections were already reported in kilograms.(25) The Petitioner's Argument The petitioner did not comment on this issue. DOC Position We agree with Chang Chun. At verification, Chang Chun reported a correction to the variable and total costs of manufacture for one U.S. sales observation based on errors identified during its preparation for verification.(26) In the preliminary results, the Department incorrectly tried to convert the corrected amounts from pounds to kilograms, as the corrected amounts were already reported in kilograms. We have adjusted the margin calculation to correct this inadvertent error in the final results. 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 review and the final weighted-average dumping margin for Chang Chun in the Federal Register. Agree____ Disagree____ __________________________________ Troy H. Cribb Acting Assistant Secretary for Import Administration _____________________ (Date) _______________________________________________________________________ footnotes: 1. See the Department's April 27, 2000, Sales and Cost Verification Report ("verification report") at page 4, issued in the Third Administrative Review of the Antidumping Duty Order on PVA from Taiwan. 2. Antidumping Duties; Countervailing Duties: Final Rules; 62 FR 27296, 27325 (May 19, 1997) ("Final Rule"). 3. See Final Rule, 62 FR at 27325. 4. "In addition, to conform to the changes in {section 351.222(d) of the regulations} regarding unreviewed intervening years, the requester must provide certifications regarding sales to the United States in commercial quantities" (see Antidumping Duties; Countervailing Duties, Notice of Proposed Rulemaking, 61 FR 7308, 7320 (February 27, 1996) ("Proposed Rule")). 5. See Final Rule, 62 FR at 27325 and 27399. 6. Pure Magnesium from Canada; Final Results of the Antidumping Duty Administrative Review and Determination Not to Revoke Order In Part, 64 FR 12977, 12979 (March 16, 1999) ("Pure Magnesium from Canada"); and Pure Magnesium From Canada; Final Results of Antidumping Duty Administrative Review and Determination Not to Revoke Order in Part, 64 FR 50489, 50491 (September 17, 1999) ("Pure Magnesium from Canada-2"). 7. The effective date of the Final Rule in an administrative review is July 1, 1997, i.e., any administrative review initiated on the basis of a request filed on or after July 1, 1997, must be conducted in accordance with our revised regulations. Therefore, this administrative review, which was requested on May 27, 1999, and initiated on June 30, 1999, has been conducted in accordance with the Final Rule. See Final Rule, 62 FR at 27416 and 27417; and 19 C.F.R. § 351.701 (1999). 8. See Pure Magnesium from Canada; Final Results of Antidumping Duty Administrative Review and Determination Not To Revoke the Antidumping Duty Order in Part, 65 FR 55503 (September 14, 2000) ("Pure Magnesium from Canada-3") and accompanying Decision Memorandum at Comment 4: Procedural Requirements for Revocation. 9. See Silicon Metal From Brazil: Final Results of the Antidumping Administrative Review, 65 FR 7497, 7498 (February 15, 2000) ("Silicon Metal from Brazil"). 10. See Amended Regulation Concerning the Revocation of Antidumping and Countervailing Duty Orders: Final Rule, 64 FR 51236 (September 22, 1999) ("Revocation Final Rule"). 11. See Pure Magnesium from Canada-2, 64 FR at 50492 12. See Revocation Final Rule, 64 FR at 51236, 51236. 13. See Pure Magnesium from Canada-3 and accompanying Decision Memorandum at Comment 1: Compliance with the WTO Antidumping Agreement. 14. See Color Television Receivers, Except for Video Monitors, From Taiwan; Final Results of Antidumping Duty Administrative Review, 51 FR 46895 (December 29, 1986); and Memorandum from Joseph A. Spetrini to Alan M. Dunn re: Color Television Receivers from Taiwan-Final Results Pursuant to Court Remand (January 31, 1992) ("Color Television Receivers from Taiwan"). 15. Professional Electric Cutting Tools from Japan: Final Results of the Fifth Antidumping Duty Administrative Review and Revocation of the Antidumping Duty Order, in Part, 64 FR 71411 (December 21, 1999) ("PECTs from Japan"). 16. Notice of Final Results of the Antidumping Duty Administrative Review and Determination Not to Revoke the Antidumping Duty Order: Brass Sheet and Strip from the Netherlands, 65 FR 742 (January 6, 2000) ("Brass Sheet and Strip from the Netherlands") 17. Certain Corrosion-Resistant Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from Canada: Final Results of Antidumping Duty Administrative Reviews, and Determination Not To Revoke in Part, 65 FR 9243 (February 24, 2000) ("Carbon Steel from Canada-2") 18. See Polyvinyl Alcohol from Taiwan: Final Results of Antidumping Duty Administrative Review, 63 FR 32810 (June 16, 1998). 19. See the petitioner's December 13, 1999, revocation rebuttal brief at page 7. 20. See Antidumping Duties; Countervailing Duties, Notice of Proposed Rulemaking, 61 FR 7308, 7320 (February 27, 1996). 21. See Pure Magnesium from Canada 64 FR at 12979; Pure Magnesium from Canada-2 64 FR at 50492; Pure Magnesium from Canada-3 and accompanying Decision Memorandum at Comment 6: Benchmarks Used to Determine Commercial Quantities and Comment 9: Whether the Evidence Demonstrates Commercial Quantities; and Carbon Steel from Canada-2, 65 FR at 9249. 22. See Brass Sheet and Strip from the Netherlands, 65 FR at 750, Silicon Metal from Brazil, 65 FR at 7498, Pure Magnesium from Canada, 64 FR at 12978, and Pure Magnesium from Canada-2, 64 FR at 50492. 23. See Brass Sheet and Strip from the Netherlands, 65 FR at 750, Silicon Metal from Brazil, 65 FR at 7498, Pure Magnesium from Canada, 64 FR at 12978, Pure Magnesium from Canada-2, 64 FR at 50492, Certain Corrosion- Resistant Carbon Steel Flat Products and Certain Cut-To-Length Carbon Steel Plate from Canada: Final Results of Antidumping Duty Administrative Reviews and Determination to Revoke in Part, 64 FR 2173, 2189 (January 13, 1999), and Carbon Steel from Canada-2, 65 FR at 9249. 24. See Final Determination of Sales at Less Than Fair Value: Polyvinyl Alcohol From Taiwan, 61 FR 14064, 14073 (March 29, 1996). 25. See verification report at page 4. 26. See verification report at page 4.