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Rule

Modification to Regulation Concerning the Revocation of Antidumping and Countervailing Duty Orders

Action

Final Rule.

Summary

The Department of Commerce (the Department) is amending its regulations concerning the revocation of antidumping and countervailing duty orders in whole or in part, and the termination of suspended antidumping and countervailing duty investigations. This rule eliminates the provision for revocation of an antidumping or countervailing duty order with respect to individual exporters or producers based on those individual exporters or producers having received antidumping rates of zero for three consecutive years, or countervailing duty rates of zero for five consecutive years.

Unified Agenda

Modification to Regulation Concerning the Revocation of Antidumping and Countervailing Duty Orders

3 actions from March 21st, 2011 to December 2011

  • March 21st, 2011
  • April 20th, 2011
    • NPRM Comment Period End
  • December 2011
    • Final Action
 

Table of Contents Back to Top

DATES: Back to Top

This Final Rule is effective June 20, 2012. This rule will apply to all reviews that are initiated on or after June 20, 2012.

FOR FURTHER INFORMATION CONTACT: Back to Top

James Maeder at (202) 482-3330, Mark Ross at (202) 482-4794, or Jonathan Zielinski at (202) 482-4384.

SUPPLEMENTARY INFORMATION: Back to Top

Background Back to Top

On March 21, 2011, the Department published a proposed rule entitled “Proposed Modification to Regulation Concerning the Revocation of Antidumping and Countervailing Duty Orders” that would modify its regulations concerning the revocation of antidumping and countervailing duty orders. (76 FR 15233). The Proposed Rule detailed proposed changes to the Department's regulations that provide for revocation of antidumping and countervailing duty orders. Certain parties commented on the Proposed Rule, and the Department has addressed those comments in the section below entitled “Response to Comments on the Proposed Rule”.

After analyzing and carefully considering all of the comments that the Department received in response to the Proposed Rule, the Department is adopting the proposed changes and is amending its regulations to eliminate the provision for revocation of an antidumping or countervailing duty order with respect to individual exporters or producers based on those individual exporters or producers having received antidumping rates of zero for three consecutive years, or countervailing duty rates of zero for five consecutive years. The Proposed Rule, comments received, and this Final Rule can be accessed using the Federal eRulemaking Portal at http://www.regulations.gov under Docket Number ITA-2011-0001.

Explanation of Changes to 19 CFR 351.222 Back to Top

To implement this rule, the Department is removing 19 CFR 351.222(b)(2) and (3) (dumping) and 351.222(c)(3) and (4) (countervailable subsidy), and is making conforming changes as necessary to the remaining paragraphs of 19 CFR 351.222. In addition, the Department is amending 19 CFR 351.222(f)(2) to make it clear that a request for revocation that does not conform with the requirements of paragraph (e) does not require the Secretary to undertake the actions provided for in paragraphs (f)(2)(i) through (f)(2)(vi). The Department also is correcting a grammatical error in the third sentence of 19 CFR 351.222(a) (changing “have” to “has”) and deleting 19 CFR 351.222(m) (a provision related to the Uruguay Round Agreements Act that is no longer applicable). Finally, the Department is correcting a typographical error in § 351.222(e)(1)(i) that was identified in comments on the Proposed Rule (changed “the person” to “they”). The Department is retaining, with some conforming changes, the sections of 19 CFR 351.222 that regard revocations of orders in whole. The Department is not making any changes with respect to revocations as described under paragraphs (g) through (l) of 19 CFR 351.222.

Response to Comments on the Proposed Rule Back to Top

The Department received numerous comments on the Proposed Rule. As indicated in the “Background” section, these comments can be accessed using the Federal eRulemaking Portal at http://www.regulations.gov under Docket Number ITA-2011-0001. The Department analyzed and carefully considered all of the comments received. Below is a summary of the comments, grouped by issue category and followed by the Department's response.

Comment 1—U.S. Law, the WTO Agreements, and Company-Specific Revocations

Some commenters assert that the use of the word “may” in Section 751(d)(l) of the Tariff Act of 1930, as amended (the “Act”), makes it clear that Congress fully delegated to the Department the authority to prescribe the specific conditions under which revocation of an order, whether in whole or in part, is appropriate. Some commenters also assert that, given the availability of revocation and termination in whole or in part in changed circumstances reviews and in whole in five-year sunset reviews, respondents seeking relief from antidumping or countervailing duties have more than ample opportunity to achieve that goal without the company-specific avenue contained in 19 CFR 351.222(b)(2) and (b)(3) and 351.222(c)(3) and (c)(4). Further, in addition to not being required by U.S. law, some parties assert that the company-specific revocation provisions are not required by any of the relevant WTO agreements. These parties assert that the WTO dispute settlement panel in United States—Anti-Dumping Measures on Oil Country Tubular Goods, paragraph 7.166, WT/DS282/R (adopted June 20, 2005) found that 19 CFR 351.222(b)(2) of the Department's regulations was not required by the United States' WTO obligations because there was an opportunity for foreign companies to request revocation under the changed circumstances review provisions (i.e., 19 CFR 351.222(g)).

Some commenters suggest that further cost savings can be attained by withdrawing the regulations providing for country-wide revocations at 19 CFR 351.222(b)(l) (dumping) and 351.222(c)(1) and (2) (subsidies). They assert that, because as part of a sunset review the Department already considers whether there has been continued dumping or subsidies after issuance of an order, there is no compelling need to maintain the company-specific and country-wide revocation procedures set forth at 19 CFR 351.222(b) and (c).

One commenter asserts that when a company demonstrates that it has not dumped its products over a certain period of time, the statue no longer justifies binding that company to costly administrative reviews. Another party asserts that the statute calls for revocation “in whole or in part” based on administrative review results, and that this is evidence of the drafters' intent to allow for other means of revocation besides termination of the order itself. One party asserted that the proposed rule, if implemented, would essentially eliminate the only viable opportunity for revocation for individual exporters/producers. Several commenters note that company-specific revocations have been a practice for many years and assert that parties have relied upon that practice in the expectation of being granted a revocation in part.

One commenter asserts that the additional risk inherent in the U.S. retrospective system is partly offset by the possibility of revocation, and requests that the Department take this into account in assessing whether to eliminate company-specific revocations of antidumping and countervailing duty orders. One party proposes that the Department's current revocation provisions remain in effect for developing countries as a form of special and differential treatment per Article 15 of the Antidumping Agreement and Article 27 of the Agreement on Subsidies and Countervailing measures. Another commenter contends that pursuant to Articles 11 of the Antidumping Agreement, WTO members can only continue an antidumping duty order “to the extent necessary” to “counteract dumping” and must consider the request of “any interested party” to “examine whether the continued imposition of the duty is necessary to offset dumping.” Citing Amended Regulation Concerning the Revocation of Antidumping and Countervailing Duty Orders; Final Rule, 64 FR 51226 (September 22, 1999), the party asserts that in that Federal Register notice the Department concluded that Article 11.2 of the Antidumping Agreement requires the Department to revoke an antidumping order for any exporter who demonstrates the absence of dumping for three years, provided there is no evidence of record to the contrary. One party asserts that the Department vigorously defended company-specific revocations pursuant to Article 11 of the Antidumping Agreement in WTO litigation (citing report of WTO Panel, United States—Antidumping duty on Dynamic Random Access Memory Semiconductors from Korea, WT/DS99/R (adopted March 19, 1999) (DRAMS).

Response to Comments: Company-specific revocations are not required by U.S. law, and thus, the elimination of such revocations is consistent with U.S. law. Section 751(d)(1) of the Act states, in relevant part, that the Department “may revoke, in whole or in part * * * .” an antidumping or countervailing duty order. As several parties note, the use of the word “may” indicates that revocations under this section of the Act, whether in whole or in part, are not required. Because the authority for company-specific revocations derives from section 751(d)(1) of the Act, those types of revocations are not mandatory.

We agree that section 751(d)(1) of the Act permits revocations other than revocation of an order in whole, i.e., the provision permits the Department to revoke an order in part. The Act does not, however, define what it means to revoke an order in part. See Sahaviriya Steel Ind. Pub Co. Ltd. v. United States, No. 2010, slip op. at 9-10 (Fed. Cir. June 17, 2011). The Department has the discretion to interpret this provision, and is not required to interpret it to include company-specific revocations. The Proposed Rule does not affect other types of revocations in part. For example, orders may continue to be revoked in part if a party demonstrates a lack of interest in maintaining the order on a certain type of subject merchandise by substantially all of the domestic industry. See, e.g., Certain Pasta from Italy; Final Results of Countervailing Duty Changed Circumstances Review and Revocation, In Part, 76 FR 27634 (May 12, 2011).

Regarding the comment from several parties that company-specific revocations have been a practice for many years and that parties have relied upon that practice in the expectation of being granted a revocation in part, the age of a practice does not affect the legality of its elimination. Rather, the Department has the authority to change its practice at any time provided that it gives a reasoned explanation for its change. See Allegheny Ludlum Corp. v. United States, 346 F.3d 1368, 1373 (Fed. Cir. 2003) (Allegheny Ludlum). In the Proposed Rule and the below sections entitled “Comment 2—Whether the Department Provided a Reasoned Analysis for the Proposed Rule” and “Comment 4—Reasons for Discontinuing Company-Specific Revocations”, the Department further explains its rationale for eliminating company-specific revocations. Moreover, the Department has provided parties ample notice of the change and opportunity to comment, and took those comments into consideration for this Final Rule. In any event, the statute and the regulation make clear that revocation is discretionary.

Regarding the comments from several parties that the Proposed Rule would be contrary to the United States' obligations under the Antidumping Agreement, we disagree. We note that the Act “is intended to bring U.S. law fully into compliance with U.S. obligations under [the WTO Agreements].”See SAA accompanying the URAA, HR Doc 316, Vol. 1, 103d Cong (1994) at 669. And, as explained above, U.S. law does not require company-specific revocations. Moreover, there is nothing in Article 11 of the Antidumping Agreement that requires company-specific revocations. We also note that the Department is not eliminating its practice, as codified in its regulations, of revoking an order in whole based on the absence of dumping.

Regarding the argument that the Department defended company-specific revocations pursuant to Article 11 of the Antidumping Agreement in the DRAMS dispute, that dispute concerned the evidence that could be relied upon in determining whether revocation was proper. The Department's regulation at the time required it to determine that sales of subject merchandise at below normal value in the future were not likely. The Panel considered whether this “not likely” standard was consistent with the requirements of Article 11.2 of the Antidumping Agreement, and determined that it was not. This dispute was not about whether company-specific revocations were required by the Antidumping Agreement, and the Panel's findings did not involve that issue.

Finally, with regard to the suggestion that the company-specific revocation regulations remain in effect for developing countries as a form of special and differential treatment per Article 15 of the Antidumping Agreement and Article 27 of the Agreement on Subsidies and Countervailing measures, neither Article requires company-specific revocations, and we have not adopted this suggestion.

Comment 2—Whether the Department Provided a Reasoned Analysis for the Proposed Rule

Several commenters assert that U.S. administrative law requires that the Department provide a “reasoned analysis” for this proposed change to the regulations, and that the Proposed Rule lacked a “reasoned analysis” because the Department did not explain why the Proposed Rule is being undertaken and why the facts and circumstances that underlay the existing revocation policy should be disregarded. They assert that, because the Department has not provided a reasoned analysis or the basic factual assumptions underlying the Proposed Rule, interested parties have been denied a meaningful opportunity to comment. One of these parties cites Motor Veh. Mfrs. Ass'n v. State Farm Ins., 463 U.S. 29, 42, in support of its assertion that U.S. administrative law requires that the Department provide a “reasoned analysis” for this proposed change to the regulations. It argues further that pursuant to the U.S. Supreme Court ruling in FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009), “a reasoned explanation is needed for disregarding facts and circumstances that underlay or were engendered by the prior policy.” The same party cites that in a prior rulemaking exercise the Department stated that it “has consistently considered that an absence of dumping for three consecutive years was indicative that a foreign respondent was not likely to sell at less than normal value in the future.” See Proposed Regulation Concerning Revocation of Antidumping Duty Orders; Notice of Proposed Rulemaking, 64 FR 29818 (June 3, 1999). It contends that in the Proposed Rule the Department made no effort to refute this statement, and that by not explaining the proposed change the Department's proposal runs afoul of the Administrative Procedures Act. The party also asserts that because the Department has not provided a reasoned analysis or the basic factual assumptions underlying the proposed change, interested parties have been denied a meaningful opportunity to comment.

Response to Comments: The Department explained its reasons for eliminating company-specific revocations in the Proposed Rule. Specifically, the Department stated that it was proposing the elimination of company-specific revocations because: (1) The existing regulation requires the Department to expend additional resources in conducting administrative reviews where a request for company-specific revocation is being considered; (2) only a small fraction of the companies the Department reviews are ultimately found to be eligible for a company-specific revocation; (3) to the extent that eligible companies maintain antidumping duty or countervailing duty rates of zero percent, the proposal would not change the amount of duties applied to subject entries; and (4) many of the companies for which reviews have been requested may not have the opportunity to amass the three antidumping rates of zero percent or five countervailing duty rates of zero percent necessary to be eligible for a company-specific revocation because the Department frequently is not able to examine all companies under review. The Department further stated that “[r]ather than administering the company-specific revocation regulations in a manner that does not afford equitable opportunity to all companies to seek revocation, and in light of the additional factors noted, the Department proposes to eliminate the company-specific revocation regulations.”

The Department may change its practice at any time as long as it provides a reasoned explanation for the change. See Allegheny Ludlum. Here, the Department provided a reasoned explanation. The Department explained the burden on its resources that company-specific revocation reviews entail. It is reasonable for the Department to make changes in response to its resource constraints. See Pakfood Public Co. Ltd. v. United States, 753 F. Supp 2d 1334 (Ct. of International Trade 2011) (holding that administrative convenience is a valid reason for a change in practice).

The Department has not ignored the circumstances that supported the existence of the regulation in the first place, but rather has determined that it is no longer appropriate to continue the practice in light of current resources for the reasons described in the Proposed Rule.

Comment 3—Effective Date

Some commenters ask that the Department adopt and implement the proposed change to the revocation regulations immediately (i.e., make the change applicable to all administrative reviews currently pending before the Department). Others request that the Department continue to allow for revocations in all ongoing reviews in which a revocation request has been made. One commenter suggests that the Department “grandfather in” any company that had reviews of itself initiated prior to the adoption of this rule to give them the opportunity to earn three zeros and, ultimately, revocation. Another party expresses concern that the proposal could undermine legitimate expectations of exporters, given uncertainty over entry into force of the proposed change.

Response to Comments: As indicated in the DATES section above, this Final Rule will apply to all reviews that are initiated on or after June 20, 2012. The Department believes that this is a fair and reasonable approach to the effective date issue for this particular change. Importantly, implementing the Final Rule in this manner will provide parties that have requested revocation in ongoing reviews the opportunity to complete those reviews and obtain a revocation should they meet the regulatory requirements in effect when that review was initiated.

Comment 4—Reasons for Discontinuing Company-Specific Revocations

a. Conserve Resources

Some commenters agree with the Department's assertion that, pursuant to the existing regulation, the Department is required to expend additional resources, including additional mandatory verifications, in conducting administrative reviews when company-specific revocations are being considered. They assert, therefore, that the change will help to conserve resources as the Department will save money by not having to conduct “mandatory verifications.” They also argue that the Department will have fewer requests for review, as companies that are already subject to low deposit rates will be less likely to request a review and there will be less of an incentive for companies to “engineer” sales for purposes of achieving revocation, rather than for normal commercial considerations. The parties contend that the Department will also save resources by not having to conduct the changed circumstance reviews that are currently needed to determine whether an exporter, once revoked, needs to be reinstated in the order. Finally, they contend that removal of the country-wide revocation procedures is permissible and would result in further cost savings.

Another party cites to burdens on the U.S. government that are created by circumvention and evasion of trade relief with respect to certain trade remedies, and asserts that such circumstances demonstrate the importance of the proposed changes to the revocation regulations. It asserts that the individual exporter exclusions provided for under the regulations at issue substantially complicate U.S. Customs and Border Protection's responsibilities for enforcement of antidumping orders, and cites to certain duty evasion issues that the U.S. government experienced while administering certain antidumping measures. It contends that company-specific exclusions can also necessitate a significant allocation of resources by the domestic industry to monitor shipments, and try and prevent circumvention of the trade relief.

Some commenters assert that revocations actually reduce administrative burdens by eliminating the need for administrative reviews of companies that are revoked from an antidumping or countervailing duty order, and that by continuing to grant company-specific revocations the Department will free up resources to review other companies. One party asserts that there is no reason to presume that the availability of revocations increases the number of proceedings the Department must undertake. For example, it contends that in a case with a small number of exporters to the U.S. market, revocations could reduce the Department's case load. Other commenters assert that it would be an inefficient use of resources to review companies over and over when they have demonstrated that they do not engage in dumping. A few parties contend that the Proposed Rule will consume more resources because companies will never have a chance for revocation and will bear the expense and burden of participating in more reviews. Some commenters request that the Department find other ways to reduce burdens so that it is able to continue to administer company-specific revocations under the regulations at issue (e.g., create a more efficient and less rigorous process for administrative reviews, make verifications discretionary, allow exporters to certify they are not dumping when they believe that to be the case).

One party argues that because the number of companies who are eligible for a company-specific revocation is so small, the additional resources, including additional mandatory verifications that the Department cites as a reason for the proposed change, cannot be so great. It also asserts that over time the proposed change will increase the resources expended on reviews as companies continue to request reviews to receive zero or low duty rates. The same party asserts that if the company-specific revocation regulations remain in effect, the Department and other U.S. federal agencies (e.g., Customs and Border Protection) may ultimately save resources as the pool of respondents subject to review diminishes over time.

Another party asserts that since money is collected from respondent parties in the form of antidumping duties and it is relatively inexpensive to conduct a revocation proceeding, the Department should not eliminate the revocation provision in the name of resource constraints. It argues that any additional resources that may be required for considering a revocation request are minimal, and suggests that the Department instead conserve resources by limiting the ability of domestic producers to request verification.

Response to Comments: The Department believes that the change will result in savings as it will no longer have to expend the additional resources associated with the conduct of administrative reviews, particularly mandatory verifications, when requests for company-specific revocations are being considered. In addition, the Department anticipates cost savings from not having to conduct changed circumstances reviews currently needed to determine whether an exporter, once excluded, should be reinstated in the order.

With regard to various conflicting arguments that the change will result in either a decrease or an increase in the number of reviews that are requested and, therefore, that cost savings may or may not actually be realized, we find them to be based on speculation as to the motivations of individual parties who may request reviews. Pursuant to 19 CFR 351.213(b), an administrative review of an exporter or producer may be requested by a domestic interested party, a foreign government, an exporter or a producer, or an importer. The Department is in no position to determine for any given proceeding what a particular party's motivations would be in deciding to request a review and how the change may influence its decision. However, the Department would note that there would be no reason for a respondent, with a zero or de minimis cash deposit rate, to request another administrative review but for the possibility of revocation.

Regarding the comment suggesting the elimination of the country-wide revocation procedures as an additional means to save resources, the Proposed Rule and this Federal Register notice only pertain to company-specific revocations and the issues the Department has experienced and hopes to resolve by eliminating those types of revocations. The Final Rule does not include any changes to the parts of the revocation regulations that concern country-wide revocations.

With regard to the suggestion that company-specific revocations should be eliminated because they may be tied to circumvention or duty evasion issues that necessitate a significant allocation of resources by the domestic industry to monitor shipments, we have not relied on this claim as a basis for our decision to implement the proposed rule since we do not have evidence of increased burdens associated with such monitoring.

With regard to the suggestion that the Department conserve resources by limiting the ability of domestic producers to request verifications, we find that our current regulations provide appropriate guidance and flexibility for the conduct of verifications requested by domestic producers in light of the Department's resource considerations. Finally, if necessary, we may in the future consider additional cost-savings measures in addition to the savings associated with the changes made by this rule.

b. A Small Portion of Reviewed Companies Have Been Found To Be Eligible for a Company-Specific Revocation

Several commenters assert that the small portion of companies found to be eligible for company-specific revocation is not a relevant factor to cite in support of changing the regulations. One commenter asserts that such a statistic is simply a consequence of the difficulty of satisfying the requirements for revocation. Another asserts that this measurement is not relevant to the antidumping orders on exports from its country because a number of companies were revoked from one of those antidumping orders. Several commenters argue that the small number of company-specific revocations supports that the existing revocation regulations do not have a material impact on the Department's resources.

Response to Comments: We disagree with the assertion that the number of reviewed companies that the Department has ultimately found to be eligible for a company-specific revocation is not an important factor to cite in support of modifying 19 CFR 351.222. As indicated in the Proposed Rule, while the Department annually conducts administrative reviews of hundreds of foreign companies subject to antidumping or countervailing duty orders, only a small fraction of the reviewed companies are ultimately found to be eligible for a company-specific revocation. Moreover, in evaluating this matter in terms of the burden and administrative procedures involved, it is important to consider that many of the companies that request a company-specific revocation under the regulations at issue go through the process of being reviewed but are, ultimately, not found to be eligible for a company-specific revocation. We examined the review requests for orders that were in effect between 2005 and 2009 and learned that roughly 75% of the company-specific revocation requests that we received ultimately were denied. Many of the companies that requested partial revocation under the regulations at issue did not obtain one because either: (1) The company was still dumping; (2) the company did not make sales in commercial quantities; (3) the company withdrew its request for revocation and/or review after we initiated the review; (4) a revocation of the entire order via the sunset review process took place prior to completion of our review of the company-specific revocation request; or (5) the company was not selected as a respondent because the Department did not have the resources to proceed with a company-specific examination. Thus, with the status quo, the Department can expect to continue to expend significant resources examining unsuccessful requests for company-specific revocations. Instead, the Department has determined, in part, to eliminate the disconnect between the large amount of resources expended conducting these company-specific revocation reviews and the few companies that benefit.

We also disagree with the assertion by one commenter that, with respect to antidumping orders on exports from its country, the small fraction of the reviewed companies the Department ultimately found eligible for a company-specific revocation is not a relevant factor to cite in support of modifying 19 CFR 351.222. The commenter indicates that a number of companies were revoked from one of the antidumping orders on imports from its country. Nonetheless, in evaluating and deciding on this particular change to the regulations our focus has been on all antidumping and countervailing duty orders/measures that are administered by the Department, not just revocation requests for one particular measure, industry, or country.

c. This Amendment Will Not Change the Amount of Duties Applied to Entries Subject to Antidumping or Countervailing Duty Orders Where the Duty Rates Remain Zero

Some parties agree with the Department's reliance on this factor. Others argue that, when companies maintain antidumping or countervailing duty rates of zero percent, both the Department and interested parties are expending resources on reviews of companies that are unlikely to dump or receive countervailable subsidies in the future. Another party asserts that the Department's rationale does not take into account the unpredictability and costs imposed by antidumping and countervailing duty orders. One party comments that the Department appears to be saying that its proposal is revenue neutral because it would not affect the amount of duties applied, and asserts that the amount of revenue collected in antidumping or countervailing duties is not a matter within the jurisdiction of the Department.

Response to Comments: The Department's statement is a matter of fact—if a company maintains an antidumping or countervailing duty rate of zero, its duty liability will not change as a result of this amendment. As for arguments concerning the expenditure of resources in the conduct of reviews for companies that maintain zero dumping or countervailing duty rates, such arguments are based on conjecture about the future pricing behavior of those companies and future subsidization by governments. It also assumes that interested parties will request reviews of those companies. We are not in a position to predict such future behavior. The Department's point is that, as long as a company maintains a dumping or countervailing duty rate of zero, it will incur no antidumping or countervailing duty liability. The Department's reference to this change not impacting the amount of duties collected was simply an effort to consider the burden of the proposal on parties, and not in consideration of the impact on U.S. revenue.

d. Many Companies May Not Have the Opportunity To Amass the Three AD Rates of Zero Percent or Five CVD Rates of Zero Percent

Certain commenters favoring the proposed change to the revocation regulations assert that it will result in a more equitable administration of the antidumping and countervailing duty proceedings for both the petitioners and respondents. One of these commenters claims that company-specific revocations can improperly advantage certain producers or exporters over others, and that such inequities also create difficulties for petitioners in ensuring that orders are effective in eliminating injurious dumping and subsidization.

Several commenters assert that the current company-specific revocation regulations do a good job of promoting equity by revoking orders against companies that are not dumping or receiving countervailable subsidies. They also assert that when such revocations result in one less company to review, it permits companies not previously examined an opportunity to be selected for examination. One commenter contends that there is no reason to deny the important benefits of company-specific revocations simply because it may be impractical in every case. The party also asserts that there are other benefits in the antidumping and countervailing duty regime that are applied unevenly (notably, the ability to obtain one's own margin, as opposed to an average of other rates). Some commenters suggest that the Department adopt new procedures that will allow for all interested and eligible exporters to participate in reviews to the extent necessary to achieve revocation. A few commenters assert that certain factors we cite in support of this change to the revocation regulations do not apply to the unique circumstances of trade remedy measures on their exports (e.g., certain cases involve a “manageable” number of companies and, therefore, the Department should not be concerned with companies in those cases not having an opportunity to be reviewed and amass the requisite zero rates).

Response to Comments: The Department continues to find that this change to the regulations will, in general, result in a more equitable administration of the antidumping and countervailing duty proceedings. In particular, and as explained in the Proposed Rule, many of the companies for which reviews are requested may not have the opportunity to amass the three antidumping rates of zero percent (demonstrating an absence of dumping for three consecutive years) or five countervailing duty rates of zero percent (demonstrating an absence of countervailable subsidies for five consecutive years) necessary to be eligible for a company-specific revocation. See Proposed Rule, 76 FR 15234. This is because it is often not practicable for the Department to examine all companies for which reviews have been requested, and where such circumstances exist, the Act permits the Department to limit the number of companies it individually examines. Rather than administering the company-specific revocation regulations in a manner that does not afford equitable opportunity to all companies to seek revocation, and in light of the comments and various factors noted in the Proposed Rule and this Federal Register notice, the Department is eliminating the company-specific revocation regulations. Moreover, by eliminating the need to obtain two/four subsequent reviews for revocation, the Department anticipates that fewer companies with zero or de minimis deposit rates will request reviews, freeing up limited resources to consider the antidumping or countervailing duty rates of other companies.

With regard to the suggestion that the Department develop or adopt new company-specific revocation procedures, the Department has not identified any new procedures for company-specific revocations that would address all the reasons it has for discontinuing such revocations. As for the commenters that assert that our reasons for discontinuing company-specific revocations do not apply to a particular antidumping or countervailing duty order, we do not find that any sort of differential treatment would be appropriate.

e. Trade Law Enforcement Initiative

One commenter states that the genesis of this proposal was an August 2010 announcement by the Secretary of Commerce to strengthen trade enforcement with a particular focus on illegal import practices from non-market economy countries. The commenter contends that there is little correlation between illegal import practices from non-market economies and the Proposed Rule, and asserts that the Secretary's concerns are more appropriately addressed by other items mentioned in the August 2010 announcement.

Response to Comments: This proposal was identified in the August 26, 2010, announcement of a Trade Law Enforcement Package to strengthen the administration of the nation's trade remedy laws. In making the announcement about this initiative, addressing illegal import practices from non-market economies was highlighted as an objective, but that objective is secondary to the overall purpose of the initiative which is to strengthen the administration of the nation's trade remedy laws. Further, in the Proposed Rule, and in the above sections of this notice, the Department provides a detailed explanation and information about the factors that warrant this amendment. Those factors and the rule change are not specific to imports from any one country or type of economy (market or non-market).

Comment 5—Company-Specific Revocations Award Good Behavior

Several commenters assert that the Department should maintain the existing rules for company-specific revocations as a direct incentive to induce individual foreign firms to adjust prices and eliminate dumping or receiving subsidies. Another party comments that such revocations give respondents hope that if they comply with the United States antidumping and countervailing duty laws, their efforts may be recognized and rewarded by revocation. Another party asserts that company-specific revocations ensure that U.S. manufacturers, retailers and consumers are not denied access to fairly traded goods.

Response to Comments: While we appreciate that companies may wish to retain the opportunity to be revoked from an order, as we noted under Comment 1, there is no obligation under U.S. law or the WTO Agreements to provide for such company-specific revocations. Moreover, if a foreign firm stops dumping or receiving countervailable subsidies, it will eliminate its liability for antidumping and countervailing duties, and U.S. manufacturers will have full access to its fairly traded goods. Finally, the antidumping and countervailing duty laws do not exist to reward any behavior. Instead, these laws exist to provide a remedy for injurious market-distorting unfair trade practices. The imposition of a remedial duty discourages such practices to the extent they are found to exist. As noted above, by maintaining a zero dumping margin or zero subsidy rate, companies avoid liability for these duties.

Comment 6—Impact of the Proposed Change on the Economy and Trade

Several commenters request that the Department not change its revocation policy until it conducts a review of the impact of the change on consuming industries and other parties that utilize imports that are subject to antidumping or countervailing duty orders. They assert that such parties will be negatively affected as a result of the Department performing administrative reviews of individual companies that would have otherwise been revoked from an order. One commenter asserts that the proposed change would restrict the ability of U.S. retailers to provide consumers with a variety of high-quality products at affordable prices, undermine U.S. competitiveness, put U.S. jobs at risk, and undermine the Administration's goal of doubling U.S. exports.

Response to Comments: With respect to the comment about consuming industries and other parties that utilize imports that are subject to antidumping or countervailing duty orders, 5 U.S.C. 605(b) requires that the Department consider the “economic impact on a substantial number of small business entities” which includes such parties. The Department provided the analysis required by 5 U.S.C. 605(b) when it issued the Proposed Rule. See Proposed Rule, 76 FR at 15234. More specifically, the Department explained that in the past five years, despite conducting administrative reviews of well over five hundred companies, only 15 companies (of various sizes) have obtained a company-specific revocation under the relevant portions of 19 CFR 351.222. We also believe that in considering the economic impact that this change may have, it is important to take into account the fact that less than two percent of all imports of goods into the United States are subject to antidumping or countervailing duties, and only a very small portion of those imports will ever be affected by this change to the revocation regulations. For these reasons, we continue to find that this change to the revocation regulations will not have a significant economic impact.

Comment 7—Calculation of the Margin for Non-Selected Companies

One commenter urges that, in light of this regulatory change, the Department should consider carefully its methodology for calculating the rate that is assigned to respondents that are not selected for individual review when the Department limits its examination in an administrative review. It notes that when the Department limits its examination to the largest exporters, it applies to the non-examined companies the average of the individual margins assigned to the mandatory respondents, except for any margins that are zero, de minimis, or based on adverse facts available. It also notes that when all of the mandatory respondents receive margins that are zero, de minimis or based on adverse facts available, the Department bases the margin for the non-selected respondents on the most recently calculated affirmative margin from a previous administrative review. It asserts that this situation is likely to arise with far greater frequency once zeroing in administrative reviews is eliminated and the revocation regulations are modified. It also asserts that over time, a margin for non-selected companies identified in this manner could be based on a margin calculated several years in the past and it would no longer be a reasonable approximation of the pricing behavior of non-selected respondents.

Response to Comments: With regard to the Department's practice or methodology for calculating the rate that is assigned to respondents that are not selected for individual review when the Department limits its examination, we believe it would be premature to try and address that issue in the context of a change to the revocation regulations. It would be more appropriate to evaluate that issue in the context of future antidumping or countervailing duty proceedings.

Comment 8—Zeroing in Relation to Company-Specific Revocations

One company cites to the possible elimination of zeroing in AD reviews (see Antidumping Proceedings: Calculation of the Weighted Average Dumping Margin and Assessment Rate in Certain Antidumping Proceedings, 75 FR 81533 (December 28, 2010)), and asserts that if the Department stops zeroing, one would expect that a significant number of exporters may qualify for revocation in the years following the change. Another company suggests that eliminating zeroing while retaining the possibility of revocation should materially reduce the Department's workload after a few years; however, if the Department eliminates both zeroing and revocation, then the Department will waste its resources in repetitious reviews of companies with zero margins.

Response to Comments: On February 14, 2012, in response to several WTO dispute settlement reports, the Department adopted a revised methodology which allows for offsets when making average-to-average comparisons in reviews. See Antidumping Proceedings: Calculation of the Weighted-Average Dumping Margin and Assessment Rate in Certain Antidumping Duty Proceedings; Final Modification, 77 FR 8101 (February 14, 2012). (“Final Modification for Reviews”). The Final Modification for Reviews makes clear that the revised methodology will apply to antidumping duty administrative reviews where the preliminary results are issued after April 16, 2012. The revision to our calculation methodology in antidumping duty administrative reviews was made to implement certain findings by the WTO Appellate Body with respect to that methodology in several disputes. See United States-Laws, Regulations and Methodology for Calculating Dumping Margins, WT/DS294/R, WT/DS294/AB/R, adopted May 9, 2006; United States-Measures Related to Zeroing and Sunset Reviews, WT/DS322/R, WT/DS322/AB/R, adopted Jan. 23, 2007; United States-Final Anti-Dumping Measures on Stainless Steel From Mexico, WT/DS344/R, WT/DS344/AB/R, adopted May 20, 2008; United States-Continued Existence and Application of Zeroing Methodology, WT/DS350/R, WR/DS350/AB/R, adopted Feb. 19, 2009. The Department's decision to change the revocation regulations has been made without regard to, and irrespective of, the change in our calculation methodology as a result of the implementation. Moreover, the comments regarding the possible effects of the proposed revision to our calculation methodology in antidumping duty reviews are based solely upon speculation.

Comment 9—Revocations of AD and CVD Measures—In Whole

Several parties indicate that with respect to revocation or termination in whole, the Department's regulations would remain substantively unchanged and, therefore, in addressing whether or not to award revocation or termination in whole, the Department will need to consider whether “all exporters and producers” have not dumped for at least three consecutive years or have not applied for or received any net countervailable subsidy for at least five consecutive years, respectively. In light of the fact that the Department often reviews individually only a small number of the foreign exporters and producers covered by an order, they ask the Department to consider and address how these prerequisites for revocation or termination in whole are to be satisfied. They propose that each foreign exporter or producer must demonstrate affirmatively that it met these conditions for the prescribed number of years before revocation or termination in whole will be granted by the Department. One of these parties also asked the Department to consider how to address revocation requests when all mandatory respondents receive rates of zero percent for the requisite number of years under § 351.222(b)(1) and (c)(1)-(2); in particular, whether these rates would be assigned to all non-reviewed companies and, if so, whether the order in whole would then be eligible for revocation. One commenter suggests that in addition to withdrawing the regulations establishing company-specific revocations at 19 CFR 351.222(b)(2) and (3) and 351.222(c)(3) and (4), the Department should withdraw its regulations providing for country-wide revocations.

Response to Comments: We generally agree with the commenters' assertion that each foreign exporter or producer would have to demonstrate that it met the regulatory requirements for the prescribed number of years before revocation or termination in whole could be granted by the Department. With regard to considering how to address revocation requests when all mandatory respondents receive rates of zero percent for the requisite number of years under §§ 351.222(b)(1) and (c)(1)-(2), we believe it is premature to decide whether such circumstances would warrant a revocation of an order in whole. We will address any such scenarios as they arise in the context of future antidumping or countervailing duty proceedings. In addition, we have not adopted the suggestion that in addition to withdrawing the regulations establishing company-specific revocations at 19 CFR 351.222(b)(2) and (3) and 351.222(c)(3) and (4), the Department should withdraw its regulations providing for country-wide revocations at 19 CFR 351.222(b)(l) (dumping) and 351.222(c)(1) and (2) (subsidies). The Proposed Rule and this Federal Register notice only pertain to company-specific revocations and the issues the Department has experienced and hopes to resolve by eliminating those types of revocations. See the Proposed Rule and Comment 4 above.

Comment 10—Reinstatement of AD and CVD Measures

Several commenters requested that the Department not withdraw the subsections of the revocation regulations that deal with the reinstatement of partially revoked orders (i.e., 19 CFR 351.222(b)(2)(i)(B), (e)(1)(iii) (antidumping duty orders) and (c)(3)(i)(B), (e)(2)(iii)(D) (countervailing duty orders)). They contend that if the subsections are removed, it is unclear what recourse would be available to the Department in the event that companies, for which orders have already been partially revoked, resume making U.S. sales at dumped prices or resume benefitting from countervailable subsidies in violation of trade remedy laws. They suggest that in light of the proposed amendments to 19 CFR 351.222, the Department should maintain the rules that would provide for the reinstatement of partially revoked antidumping and countervailing duty orders. One party suggests that the Department maintain the current version of § 351.222(b)(2)(i)(B), (c)(3)(i)(B), (e)(1)(iii), and (e)(2)(iii)(D) in its regulations but clarify that they apply only to orders that have been partially revoked prior to the effective date of the change in regulations.

Response to Comments: We have not adopted the changes proposed by these parties. Any company that has been revoked from an antidumping or countervailing duty order will remain subject to its certified agreement to be reinstated with respect to that order if the Department finds it to have resumed dumping or to be benefitting from a countervailable subsidy. The modification does not absolve the company from its obligations under its existing agreement.

Comment 11—Clerical Error in the Proposed Rule

Two commenters assert that the Department made a typographical error in § 351.222(e)(1)(i) of the proposed amendment to the revocation regulations. One commenter suggests that the term “the person” may need to be changed to the plural form to conform to “all exporters and producers.” The other suggests that the reference to “the person” be changed to “the exporter or producer in each instance.”

Response to Comments: We agree that there is a typographical error in § 351.222(e)(1)(i) of the Proposed Rule. The term “the person” needs to be in a plural form, so we have changed the term to “they”.

Classification Back to Top

Executive Order 12866

The rule has been determined to be not significant for purposes of Executive Order 12866.

Regulatory Flexibility Act

The Chief Counsel for Regulation has certified to the Chief Counsel for Advocacy of the Small Business Administration (“SBA”) under the provisions of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that the proposed rule would not have a significant economic impact on a substantial number of small business entities. The factual basis for the certification was published in the Proposed Rule. The Department received comments regarding the factual basis for this decision, and has summarized and responded to those comments in the above section of this notice entitled “Comment 4—Reasons for Discontinuing Company-Specific Revocations”. Based upon the Department's analysis, as discussed above, the factual basis used in the Proposed Rule to determine that the rule, if promulgated, would not have a significant impact on a substantial number of small business entities did not change. As a result, a Final Regulatory Flexibility analysis is not required and has not been prepared.

Paperwork Reduction Act

This rule does not contain a collection of information for purposes of the Paperwork Reduction Act of 1980, as amended (44 U.S.C. 3501 et seq.).

List of Subjects in 19 CFR Part 351 Back to Top

Dated: May 15, 2012.

Paul Piquado,

Assistant Secretary for Import Administration.

For the reasons stated, 19 CFR part 351 is amended as follows:

begin regulatory text

PART 351—ANTIDUMPING AND COUNTERVAILING DUTIES Back to Top

1.The authority citation for 19 CFR part 351 continues to read as follows:

2.In § 351.222, revise paragraphs (a), (b), (c), (e), and (f), remove paragraph (m), and redesignate paragraph (n) as paragraph (m) to read as follows:

§ 351.222 Revocation of orders; termination of suspended investigations.

(a) Introduction.“Revocation” is a term of art that refers to the end of an antidumping or countervailing proceeding in which an order has been issued. “Termination” is the companion term for the end of a proceeding in which the investigation was suspended due to the acceptance of a suspension agreement. Generally, a revocation or termination may occur only after the Department or the Commission has conducted one or more reviews under section 751 of the Act. This section contains rules regarding requirements for a revocation or termination; and procedures that the Department will follow in determining whether to revoke an order or terminate a suspended investigation.

(b) Revocation or termination based on absence of dumping. (1) In determining whether to revoke an antidumping duty order or terminate a suspended antidumping investigation, the Secretary will consider:

(i) Whether 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) Whether the continued application of the antidumping duty order is otherwise necessary to offset dumping.

(2) If the Secretary determines, based upon the criteria in paragraphs (b)(1)(i) and (ii) of this section, that the antidumping duty order or suspension of the antidumping duty investigation is no longer warranted, the Secretary will revoke the order or terminate the investigation.

(c) Revocation or termination based on absence of countervailable subsidy. (1)(i) In determining whether to revoke a countervailing duty order or terminate a suspended countervailing duty investigation, the Secretary will consider:

(A) Whether the government of the affected country has eliminated all countervailable subsidies on the subject merchandise by abolishing for the subject merchandise, for a period of at least three consecutive years, all programs that the Secretary has found countervailable;

(B) Whether exporters and producers of the subject merchandise are continuing to receive any net countervailable subsidy from an abolished program referred to in paragraph (c)(1)(i)(A) of this section; and

(C) Whether the continued application of the countervailing duty order or suspension of countervailing duty investigation is otherwise necessary to offset subsidization.

(ii) If the Secretary determines, based upon the criteria in paragraphs (c)(1)(i)(A) through (C) of this section, that the countervailing duty order or suspension of the countervailing duty investigation is no longer warranted, the Secretary will revoke the order or terminate the suspended investigation.

(2)(i) In determining whether to revoke a countervailing duty order or terminate a suspended countervailing duty investigation, the Secretary will consider:

(A) Whether all exporters and producers covered at the time of revocation by the order or the suspension agreement have not applied for or received any net countervailable subsidy on the subject merchandise for a period of at least five consecutive years; and

(B) Whether the continued application of the countervailing duty order or suspension of the countervailing duty investigation is otherwise necessary to offset subsidization.

(ii) If the Secretary determines, based upon the criteria in paragraphs (c)(2)(i)(A) and (B) of this section, that the countervailing duty order or the suspension of the countervailing duty investigation is no longer warranted, the Secretary will revoke the order or terminate the suspended investigation.

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(e) Request for revocation or termination—(1) Antidumping proceeding. During the third and subsequent annual anniversary months of the publication of an antidumping order or suspension of an antidumping investigation, any exporter or producer may request in writing that the Secretary revoke an order or terminate a suspended investigation under paragraph (b) of this section if the person submits with the request:

(i) Certifications for all exporters and producers covered by the order or suspension agreement that they sold the subject merchandise at not less than normal value during the period of review described in § 351.213(e)(1), and that in the future they will not sell the merchandise at less than normal value; and

(ii) Certifications for all exporters and producers covered by the order or suspension agreement that, during each of the consecutive years referred to in paragraph (b) of this section, they sold the subject merchandise to the United States in commercial quantities.

(2) Countervailing duty proceeding. (i) During the third and subsequent annual anniversary months of the publication of a countervailing duty order or suspension of a countervailing duty investigation, the government of the affected country may request in writing that the Secretary revoke an order or terminate a suspended investigation under paragraph (c)(1) of this section if the government submits with the request its certification that it has satisfied, during the period of review described in § 351.213(e)(2), the requirements of paragraph (c)(1)(i) of this section regarding the abolition of countervailable subsidy programs, and that it will not reinstate for the subject merchandise those programs or substitute other countervailable subsidy programs;

(ii) During the fifth and subsequent annual anniversary months of the publication of a countervailing duty order or suspended countervailing duty investigation, the government of the affected country may request in writing that the Secretary revoke an order or terminate a suspended investigation under paragraph (c)(2) of this section if the government submits with the request:

(A) Certifications for all exporters and producers covered by the order or suspension agreement that they have not applied for or received any net countervailable subsidy on the subject merchandise for a period of at least five consecutive years (see paragraph (c)(2)(i) of this section);

(B) Those exporters' and producers' certifications that they will not apply for or receive any net countervailable subsidy on the subject merchandise from any program the Secretary has found countervailable in any proceeding involving the affected country or from other countervailable programs (see paragraph (c)(2)(ii) of this section); and

(C) A certification from each exporter or producer that, during each of the consecutive years referred to in paragraph (c)(2) of this section, that person sold the subject merchandise to the United States in commercial quantities.

(f) Procedures. (1) Upon receipt of a timely request for revocation or termination under paragraph (e) of this section, the Secretary will consider the request as including a request for an administrative review and will initiate and conduct a review under § 351.213.

(2) When the Secretary is considering a request for revocation or termination under paragraph (e) of this section, in addition to the requirements of § 351.221 regarding the conduct of an administrative review, the Secretary will:

(i) Publish with the notice of initiation under § 351.221(b)(1), notice of “Request for Revocation of Order” or “Request for Termination of Suspended Investigation” (whichever is applicable);

(ii) Conduct a verification under § 351.307;

(iii) Include in the preliminary results of review under § 351.221(b)(4) the Secretary's decision whether there is a reasonable basis to believe that the requirements for revocation or termination are met;

(iv) If the Secretary decides that there is a reasonable basis to believe that the requirements for revocation or termination are met, publish with the notice of preliminary results of review under § 351.221(b)(4) notice of “Intent To Revoke Order” or “Intent To Terminate Suspended Investigation” (whichever is applicable);

(v) Include in the final results of review under § 351.221(b)(5) the Secretary's final decision whether the requirements for revocation or termination are met; and

(vi) If the Secretary determines that the requirements for revocation or termination are met, publish with the notice of final results of review under § 351.221(b)(5) notice of “Revocation of Order” or “Termination of Suspended Investigation” (whichever is applicable).

(3) If the Secretary revokes an order, the Secretary will order the suspension of liquidation terminated for the merchandise covered by the revocation on the first day after the period under review, and will instruct the Customs Service to release any cash deposit or bond.

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end regulatory text

[FR Doc. 2012-12257 Filed 5-18-12; 8:45 am]

BILLING CODE 3510-DS-P

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