[Federal Register Volume 79, Number 250 (Wednesday, December 31, 2014)]
[Proposed Rules]
[Pages 78742-78744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30664]
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DEPARTMENT OF COMMERCE
International Trade Administration
19 CFR Part 351
[Docket No. 140929814-4814-01]
RIN 0625-AB02
Modification of Regulations Regarding Price Adjustments in
Antidumping Duty Proceedings
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
ACTION: Proposed rule and request for comments.
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SUMMARY: The Department of Commerce (``the Department'') proposes to
modify two regulations pertaining to price adjustments in antidumping
duty proceedings and is seeking comments from parties. These
modifications, if adopted, are intended to clarify that the Department
generally will not consider a price adjustment that reduces or
eliminates a dumping margin unless the party claiming such price
adjustment demonstrates, to the satisfaction of the Department, through
documentation that the terms and conditions of the adjustment were
established and known to the customer at the time of sale.
DATES: To be assured of consideration, written comments must be
received no later than January 30, 2015.
ADDRESSES: All comments must be submitted through the Federal
eRulemaking Portal at http://www.regulations.gov, Docket No. ITA-2014-
0001, unless the commenter does not have access to the internet.
Commenters that do not have access to the internet may submit the
original and one electronic copy of each set of comments by mail or
hand delivery/courier. All comments should be addressed to Paul
Piquado, Assistant Secretary for Enforcement & Compliance, Room 1870,
Department of Commerce, 14th Street and Constitution Ave. NW.,
Washington, DC 20230. Comments submitted to the Department will be
uploaded to the eRulemaking Portal at www.Regulations.gov.
The Department will consider all comments received before the close
of the comment period. All comments responding to this notice will be a
matter of public record and will be available on the Federal
eRulemaking Portal at www.Regulations.gov. The Department will not
accept comments accompanied by a request that part or all of the
material be treated confidentially because of its business
[[Page 78743]]
proprietary nature or for any other reason.
Any questions concerning file formatting, document conversion,
access on the Internet, or other electronic filing issues should be
addressed to Moustapha Sylla, Enforcement and Compliance Webmaster, at
(202) 482-4685, email address: [email protected].
FOR FURTHER INFORMATION CONTACT: Jessica Link at (202) 482-1411 or
Melissa Skinner at (202) 482-0461.
SUPPLEMENTARY INFORMATION:
Background
In general terms, section 731 of the Tariff Act of 1930, as amended
(the Act) provides that when a company is selling foreign merchandise
into the United States at less than fair value, and material injury or
threat of material injury is found by the International Trade
Commission, the Department shall impose an antidumping duty. An
antidumping duty analysis involves a comparison of the company's sales
price in the United States (known as the export price or constructed
export price) with the price or cost in the foreign market (known as
the normal value). See 19 CFR 351.401(a); see also section 772 of the
Act (defining export price and constructed export price); section 773
of the Act (defining normal value). The prices used to establish export
price, constructed export price, and normal value involve certain
adjustments. See, e.g., 19 CFR 351.401(b). In its May 19, 1997 final
rulemaking, the Department promulgated regulatory provisions governing
the use of price adjustments in the calculation of export price,
constructed export price, and normal value in antidumping duty
proceedings. Antidumping Duties; Countervailing Duties; Final Rule, 62
FR 27296 (May 19, 1997) (``Final Rule''). In particular, the Department
promulgated the current regulation at 19 CFR 351.102(b)(38), which
provides a definition of ``price adjustment''. In providing this
definition, the Department stated that ``{t{time} his term is intended
to describe a category of changes to a price, such as discounts,
rebates and post-sale price adjustments, that affect the net outlay of
funds by the purchaser.'' Id., 62 FR at 27300.
The Department also enacted 19 CFR 351.401(c), which explains how
the Department will use a price net of price adjustments. In the Final
Rule, the Department explained that 19 CFR 351.401(c) was intended to
``restate{{time} the Department's practice with respect to price
adjustments, such as discounts and rebates.'' Final Rule, 62 FR at
27344.
The Department also addressed the following comment on the proposed
rulemaking, regarding whether ``after the fact'' price adjustments,
that were not contemplated at the time of sale, would be accepted under
19 CFR 351.401(c):
One commenter suggested that, at least for purposes of normal
value, the regulations should clarify that the only rebates Commerce
will consider are ones that were contemplated at the time of sale.
This commenter argued that foreign producers should not be allowed
to eliminate dumping margins by providing ``rebates'' only after the
existence of margins becomes apparent.
The Department has not adopted this suggestion at this time. We
do not disagree with the proposition that exporters or producers
will not be allowed to eliminate dumping margins by providing price
adjustments ``after the fact.'' However, as discussed above, the
Department's treatment of price adjustments in general has been the
subject of considerable confusion. In resolving this confusion, we
intend to proceed cautiously and incrementally. The regulatory
revisions contained in these final rules constitute a first step at
clarifying our treatment of price adjustments. We will consider
adding other regulatory refinements at a later date.
Since enacting these regulations, the Department has consistently
applied its practice of not granting price adjustments where the terms
and conditions were not established and known to the customer at the
time of sale (sometimes referred to as determining the ``legitimacy''
of a price adjustment) because of the potential for manipulation of the
dumping margin through so-called ``after-the-fact'' adjustments. See,
e.g., Certain Oil Country Tubular Goods From Taiwan: Final
Determination of Sales at Less Than Fair Value, 79 FR 41979 (July 18,
2014) and accompanying Issues and Decision Memorandum, Cmt. 3;
Lightweight Thermal Paper From Germany: Notice of Final Results of the
First Antidumping Duty Administrative Review, 76 FR 22078 (April 20,
2011) (Lightweight Thermal Paper from Germany) and accompanying Issues
and Decision Memorandum, Cmt. 3; Canned Pineapple Fruit from Thailand:
Final Results and Partial Rescission of Antidumping Duty Administrative
Review, 71 FR 70948 (Dec. 7, 2006) and accompanying Issues and Decision
Memorandum, Cmt. 1; Ball Bearings and Parts Thereof from France,
Germany, Italy, Japan, and the United Kingdom: Final Results of
Antidumping Duty Administrative Reviews, 71 FR 40064 (July 14, 2006)
and accompanying Issues and Decision Memorandum, Cmt. 19.
On March 25, 2014, the Court of International Trade issued
Papierfabrik August Koehler AG v. United States, 971 F. Supp. 2d 1246
(Ct. Int'l Trade 2014) (Koehler AG), remanding the Department's
decision in Lightweight Thermal Paper from Germany, noted above. The
Court ordered the Department to reconsider Papierfabrik August Koehler
AG's rebate program. The Court disagreed with the Department's
determination that the regulations permitted it to disregard certain
price adjustments, the terms and conditions of which were not
established or known to the customer at the time of sale, stating that
``the regulations set forth a broad definition of price adjustment
encompassing `any change in the price charged for . . . the foreign
like product' that `are reflected in the purchaser's net outlay.' ''
971 F. Supp. 2d at 1251-52 (quoting 19 CFR 351.102(b)(38)) (emphasis
added by Court). In accordance with the Court's order, on remand, under
protest, the Department granted an adjustment for the rebates at issue.
See Final Results of Redetermination Pursuant to Court Remand,
Lightweight Thermal Paper from Germany, Papierfabrik August Koehler AG
v. United States, Court No. 11-00147, Slip Op. 14-31 (Ct. Int'l Trade
March 25, 2014), dated June 20, 2014.
The Department continues to defend its regulatory interpretation of
disallowing price adjustments the terms and conditions of which were
not contemplated and known to the customer at the time of sale.
However, the Department recognizes that the Court of International
Trade in Koehler AG disagrees with its interpretation. Therefore,
without prejudice to the United States Government's right to appeal
Koehler AG, or to argue that the Department's current interpretation of
its regulations is correct, the Department is issuing this proposed
rule to modify the regulations at issue pursuant to Administrative
Procedure Act (5 U.S.C. 553) notice and comment procedures; we invite
comments from all interested parties.
Proposed Modification
The Department proposes to modify 19 CFR 351.102(b)(38) and 19 CFR
351.401(c) as indicated below. These modifications, if adopted, are
intended to clarify that the Department generally will not consider a
price adjustment that reduces or eliminates a dumping margin unless the
party claiming such price adjustment demonstrates, to the satisfaction
of the Department, through
[[Page 78744]]
documentation that the terms and conditions of the adjustment were
established and known to the customer at the time of sale. This
rulemaking would be effective for proceedings initiated on or after 30
days following the date of publication of the final rule.
The Department invites parties to comment on this proposed rule and
the proposed effective date. Further, any party may submit comments
expressing its disagreement with the Department's proposal and may
propose an alternative approach.
Classifications
Executive Order 12866
It has been determined that this proposed rule is not significant
for purposes of Executive Order 12866.
Paperwork Reduction Act
This proposed rule contains no new collection of information
subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.
Executive Order 13132
This proposed rule does not contain policies with federalism
implications as that term is defined in section 1(a) of Executive Order
13132, dated August 4, 1999 (64 FR 43255 (August 10, 1999)).
Regulatory Flexibility Act
The Chief Counsel for Regulation has certified to the Chief Counsel
for Advocacy of the Small Business Administration 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. A summary of the need for,
objectives of and legal basis for this rule is provided in the
preamble, and is not repeated here.
The entities upon which this rulemaking could have an impact
include foreign exporters and producers, some of whom are affiliated
with U.S. companies, and U.S. importers. Enforcement & Compliance
currently does not have information on the number of entities that
would be considered small under the Small Business Administration's
size standards for small businesses in the relevant industries.
However, some of these entities may be considered small entities under
the appropriate industry size standards. Although this proposed rule
may indirectly impact small entities that are parties to individual
antidumping duty proceedings, it will not have a significant economic
impact on any entities.
The proposed action is merely a continuation of the Department's
practice based on its interpretation of current Department regulations.
If the proposed rule is implemented, no entities would be required to
undertake additional compliance measures or expenditures. Rather, the
regulations, both in their current form and in this proposed
rulemaking, instruct the Department on what adjustments to make to
export price or constructed export price and normal value under certain
factual scenarios in the course of an antidumping duty proceeding.
Because the proposed rule only impacts the way in which the Department
makes certain calculations in antidumping duty proceedings, it does not
directly impact any business entities. The proposed rule merely
clarifies the regulations to better align with current Departmental
practices. Therefore, the proposed rule would not have a significant
economic impact on a substantial number of small business entities. For
this reason, an Initial Regulatory Flexibility Analysis is not required
and one has not been prepared.
List of Subjects in 19 CFR Part 351
Administrative practice and procedure, Antidumping, Business and
industry, Cheese, Confidential business information, Countervailing
duties, Freedom of information, Investigations, Reporting and
recordkeeping requirements.
Dated: December 19, 2014.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.
For the reasons stated, 19 CFR part 351 is proposed to be amended
as follows:
PART 351--ANTIDUMPING AND COUNTERVAILING DUTIES
0
1. The authority citation for 19 CFR part 351 continues to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 1202 note; 19 U.S.C. 1303
note; 19 U.S.C. 1671 et seq.; and 19 U.S.C. 3538.
0
2. In Sec. 351.102, revise paragraph (b)(38) to read as follows:
Sec. 351.102 Definitions.
* * * * *
(b) * * *
(38) Price adjustment. ``Price adjustment'' means a change in the
price charged for subject merchandise or the foreign like product, such
as a discount or rebate, including, under certain circumstances, a
change such as a discount or rebate that is made after the time of sale
(see Sec. 351.401(c)), that is reflected in the purchaser's net
outlay.
* * * * *
0
3. In Sec. 351.401, revise paragraph (c) to read as follows:
Sec. 351.401 In general.
* * * * *
(c) Use of price net of price adjustments. In calculating export
price, constructed export price, and normal value (where normal value
is based on price), the Secretary normally will use a price that is net
of price adjustments, as defined in Sec. 351.102(b), that are
reasonably attributable to the subject merchandise or the foreign like
product (whichever is applicable). The Secretary generally will not
consider a price adjustment that reduces or eliminates a dumping margin
unless the party claiming such price adjustment demonstrates, to the
satisfaction of the Secretary, through documentation that the terms and
conditions of the adjustment were established and known to the customer
at the time of sale.
* * * * *
[FR Doc. 2014-30664 Filed 12-30-14; 8:45 am]
BILLING CODE 3510-DS-P