[Federal Register Volume 64, Number 184 (Thursday, September 23, 1999)]
[Notices]
[Pages 51511-51514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24828]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-423-602]


Preliminary Results of Full Sunset Review: Industrial Phosphoric 
Acid From Belgium

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of preliminary results of full sunset review: Industrial 
phosphoric acid from Belgium.

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SUMMARY: On March 1, 1999, the Department of Commerce (``the 
Department'') initiated a sunset review of the antidumping duty order 
on industrial phosphoric acid from Belgium (64 FR 9970) pursuant to 
section 751(c) of the Tariff Act of 1930, as amended (``the Act''). On 
the basis of a notice of intent to participate filed on behalf of 
domestic interested parties and adequate substantive comments filed on 
behalf of domestic and respondent

[[Page 51512]]

interested parties, the Department determined to conduct a full review. 
As a result of this review, the Department preliminarily finds that 
revocation of the antidumping duty order would likely lead to 
continuation or recurrence of dumping at the levels indicated in the 
Preliminary Results of Review section of this notice.

FOR FURTHER INFORMATION CONTACT: Darla D. Brown or Melissa G. Skinner, 
Office of Policy for Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street & Constitution 
Avenue, NW, Washington, D.C. 20230; telephone: (202) 482-3207 or (202) 
482-1560, respectively.

EFFECTIVE DATE: September 23, 1999.

Statute and Regulations

    This review is being conducted pursuant to sections 751(c) and 752 
of the Act. The Department's procedures for the conduct of sunset 
reviews are set forth in Procedures for Conducting Five-year 
(``Sunset'') Reviews of Antidumping and Countervailing Duty Orders, 63 
FR 13516 (March 20, 1998) (``Sunset Regulations'') and 19 CFR Part 351 
(1998) in general. Guidance on methodological or analytical issues 
relevant to the Department's conduct of sunset reviews is set forth in 
the Department's Policy Bulletin 98:3--Policies Regarding the Conduct 
of Five-year (``Sunset'') Reviews of Antidumping and Countervailing 
Duty Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (``Sunset 
Policy Bulletin'').

Scope

    The merchandise subject to this antidumping duty order is 
industrial phosphoric acid (``IPA'') from Belgium. IPA is currently 
classifiable under item number 2809.20.00 of the Harmonized Tariff 
Schedule of the United States (``HTSUS''). Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description remains dispositive.

History of the Order

    The Department published its final determination of sales at less 
than fair value (``LTFV'') with respect to IPA from Belgium on July 7, 
1987 (52 FR 25436). In this determination, the Department published a 
weighted-average dumping margin for one company as well as an ``all 
others'' rate. On August 20, 1987, the Department issued the 
antidumping duty order on IPA from Belgium (52 FR 31439). Since the 
order, four administrative reviews have been conducted.1 In 
each of these reviews, the Department published one company-specific 
weighted-average dumping margin, as well as an ``all others'' rate. The 
order remains in effect for the sole known exporter of IPA from 
Belgium. We note that, to date, the Department has not issued any duty 
absorption findings in this case.
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    \1\ See Final Results of Antidumping Administrative Review; 
Industrial Phosphoric Acid from Belgium, 61 FR 20227 (May 6, 1996); 
Final Results of Antidumping Administrative Review; Industrial 
Phosphoric Acid from Belgium, 61 FR 51424 (October 2, 1996); Final 
Results of Antidumping Administrative Review; Industrial Phosphoric 
Acid from Belgium, 62 FR 41359 (August 1, 1997); and Final Results 
of Antidumping Administrative Review; Industrial Phosphoric Acid 
from Belgium, 63 FR 55087 (October 14, 1998).
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Background

    On March 1, 1999, the Department initiated a sunset review of the 
antidumping order on IPA from Belgium (64 FR 9970), pursuant to section 
751(c) of the Act. The Department received a Notice of Intent to 
Participate from Albright and Wilson Americas Inc., Solutia Inc. 
(formerly part of the Monsanto Company), and FMC Corporation 
(collectively, the ``domestic interested parties'') on March 15, 1999, 
within the deadline specified in section 351.218(d)(1)(i) of the Sunset 
Regulations. Pursuant to 19 U.S.C. 1677(9)(C), the domestic interested 
parties claimed interested party status as domestic producers of IPA. 
Moreover, the domestic interested parties stated that FMC and Monsanto 
were petitioners in the original antidumping investigation. The 
Department received a complete substantive response from the domestic 
interested parties on March 31, 1999, within the 30-day deadline 
specified in the Sunset Regulations under section 351.218(d)(3)(i).
    The Department also received a complete substantive response on 
behalf of Societe Chimique Prayon-Rupel, S.A. (``Prayon'') on March 31, 
1999, within the deadline specified in the Sunset Regulations under 
section 351.218(d)(3)(i). Prayon claimed interested party status under 
19 U.S.C. 1677(9)(A) as a manufacturer and exporter of IPA to the 
United States. In its substantive response, Prayon stated that it 
participated in the original investigation and all of the subsequent 
administrative reviews. The Department determined that Prayon's 
response constituted an adequate response to the notice of initiation. 
As a result, the Department determined, in accordance with section 
351.218(e)(2) of the Sunset Regulations, to conduct a full (240 day) 
review.
    On April 8, 1999, the Department received rebuttal comments from 
the domestic interested parties.2
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    \2\ On April 1, 1999, the Department received and granted a 
request from the domestic interested parties for a three working-day 
extension of the deadline for filing rebuttal comments in this 
sunset review. This extension was granted for all participants 
eligible to file rebuttal comments in this review. The deadline for 
filing rebuttals to the substantive comments therefore became April 
8, 1999.
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    In accordance with section 751(c)(5)(C)(v) of the Act, the 
Department may treat a sunset review as extraordinarily complicated if 
it is a review of a transition order (i.e., an order in effect on 
January 1, 1995). On June 25, 1999, the Department determined that the 
sunset review of the antidumping duty order on IPA from Belgium is 
extraordinarily complicated pursuant to section 751(c)(5)(C)(v) of the 
Act, and extended the time limit for completion of the preliminary 
results of this review until not later than September 17, 1999, in 
accordance with section 751(c)(5)(B) of the Act.3
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    \3\ See Industrial Phosphoric Acid from Israel (C-508-605) and 
Industrial Phosphoric Acid from Belgium (A-423-602): Extension of 
Time Limit for Final [sic] Results of Five-Year Reviews, 64 FR 34189 
(June 25, 1999).
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Determination

    In accordance with section 751(c)(1) of the Act, the Department is 
conducting this review to determine whether revocation of the 
antidumping duty order would be likely to lead to continuation or 
recurrence of dumping. Section 752(c) of the Act provides that, in 
making this determination, the Department shall consider the weighted-
average dumping margins determined in the investigation and subsequent 
reviews and the volume of imports of the subject merchandise for the 
period before and the period after the issuance of the antidumping 
order, and shall provide to the International Trade Commission (``the 
Commission'') the magnitude of the margin of dumping likely to prevail 
if the order was revoked.
    The Department's determinations concerning continuation or 
recurrence of dumping and the magnitude of the margin are discussed 
below. In addition, parties' comments with respect to continuation or 
recurrence of dumping and the magnitude of the margin are addressed 
within the respective sections below.

Continuation or Recurrence of Dumping

Interested Parties' Comments

    In their substantive response, the domestic interested parties 
argue that

[[Page 51513]]

revocation of the antidumping duty order would likely result in the 
continuation or recurrence of dumping of IPA (see March 31, 1999, 
Substantive Response of the domestic interested parties at 6). They 
maintain that historical experience clearly supports a decision to 
continue the current order. More specifically, the domestic interested 
parties assert that the behavior of Prayon before and after the 
issuance of the order indicates that were the order revoked, dumping 
would likely continue. For example, they argue that imports fell 
sharply in 1987, the year the order was issued. In 1988, imports again 
declined, followed by a complete cessation in 1989 (see id. at 9 and 
Attachment C). Moreover, the domestic interested parties state that 
Prayon essentially remained outside of the U.S. market until 1994; even 
upon returning to the market, Prayon's imports have remained 
significantly below pre-order shipment levels (see id. at 11). As a 
result, the domestic interested parties conclude that, consistent with 
the Sunset Policy Bulletin, it is reasonable to assume that Prayon 
could not sell in the U.S. market without dumping. Further, citing a 
letter written by Prayon to its U.S. customers, the domestic interested 
parties argue that the cessation in imports was the result of a 
decision made by Prayon because it could not continue shipments in the 
face of the burden of the antidumping duty order (see id. at 9 and 
Attachment A).
    In its substantive response, Prayon argues that revocation of the 
antidumping duty order would not be likely to lead to continuation or 
recurrence of dumping of IPA (see March 31, 1999, Substantive Response 
of Prayon at 3). Prayon bases this argument, in part, on the fact that 
dumping margins have declined steadily throughout the life of the 
order. Prayon explains its declining margins as follows. First, Prayon 
states that it suspended sales to the United States shortly after the 
imposition of the order because of declining IPA prices. Five years 
later, after price trends reversed, Prayon states that it reentered the 
U.S. market with sales of IPA. At that time, margins were zero (1993-94 
administrative review). Subsequently, relative prices temporarily 
changed again as the value of the Belgian franc rose sharply vis-a-vis 
the dollar, and a company-specific margin of 11.36% therefore 
reappeared in the 1994-1995 administrative review. Since that review, 
margins have declined for the subsequent two administrative reviews. 
Moreover, Prayon states that it anticipates that margins will decline 
still further when the Department completes its review for the 1997-
1998 administrative review (see id. at 4).
    Moreover, Prayon argues that it has never held more than a very 
small share of the U.S. market for IPA. Therefore, Prayon argues, 
whether its sales have been at LTFV has been determined by prevailing 
prices in the U.S. and Belgian markets for IPA, and relative currency 
values (see id. at 3).
    Prayon also maintains that there have been significant changes in 
the United States IPA market. As a result of these changes, pricing in 
the market has firmed, argues Prayon. Therefore, Prayon maintains that 
since the 14.67 percent margin found the in the original investigation 
predates these changes in the market and the industry, it does not 
provide a reasonable basis on which to predict the future (see id. at 
5).
    Prayon further argues that although the Policy Bulletin states that 
declining margins alone normally do not qualify as grounds for a 
determination of no likelihood, the recent declining value of the 
Belgian franc vis-a-vis the U.S. dollar provides additional evidence 
for such a determination as well as reason for considering that, in the 
circumstances of this case, the declining margins indicate that 
revocation is not likely to lead to continuation or recurrence of 
dumping (see id. at 4). In other words, Prayon appears to be arguing 
that differences in the dumping margins found in administrative reviews 
were primarily the result of fluctuations in currency exchange rates. 
Therefore, since the Belgian franc has weakened against the dollar in 
recent years, Prayon expects margins to decline. Quoting the Statement 
of Administrative Action (``the SAA''), H.R. Doc. No. 103-316, vol. 1 
(1994), at 889-90, Prayon also argues that its declining dumping 
margins accompanied by steady or increasing imports may indicate that 
foreign companies do not have to dump to maintain market share in the 
United States and that dumping is less likely to continue or recur if 
the order is revoked (see id. at 5-6). In sum, Prayon asserts that both 
of these conditions (i.e., declining margins and steady or increasing 
imports) are satisfied in this case.
    In their rebuttal comments, the domestic interested parties argue 
that the volume of imports of IPA subject to the order has not remained 
steady or increased over the life of the order. On the contrary, argue 
the domestic interested parties, Prayon's volume of sales decreased 
after the issuance of the order and have not regained pre-order levels 
(see April 8, 1999, rebuttal comments of the domestic interested 
parties at 4-5). Moreover, the domestic interested parties address 
Prayon's comments regarding the changes in the United States IPA 
market. They argue that it is precisely because those changes have 
occurred that the Department should recommend the original dumping 
margin as the margin likely to prevail if the order is revoked. They 
assert that many of the changes in the United States IPA market since 
the time of the original investigation are the direct result of the 
order and would not have occurred without the protection from unfair 
imports that the order has provided (see id. at 6).
    Therefore, the conclusion drawn by the domestic interested parties 
is that Prayon cannot sell IPA in the U.S. market without dumping, and, 
were the antidumping order on IPA from Belgium revoked, Prayon would be 
likely to continue and expand sales to the United States at less than 
fair value. Moreover, they conclude that the dumping margin of 14.67 
percent found in original investigation is the only margin available 
that reflects Prayon's behavior without the discipline of the order in 
place (see id. at 5, 7).

Department's Determination

    Drawing on the guidance provided in the legislative history 
accompanying the Uruguay Round Agreements Act (``URAA''), specifically 
the SAA, the House Report, H.R. Rep. No. 103-826, pt. 1 (1994), and the 
Senate Report, S. Rep. No. 103-412 (1994), the Department issued its 
Sunset Policy Bulletin providing guidance on methodological and 
analytical issues, including the basis for likelihood determinations. 
The Department clarified that determinations of likelihood will be made 
on an order-wide basis (see section II.A.2 of the Sunset Policy 
Bulletin). In addition, the Department indicated that it will normally 
determine that revocation of an antidumping order is likely to lead to 
continuation or recurrence of dumping where (a) dumping continued at 
any level above de minimis after the issuance of the order, (b) imports 
of the subject merchandise ceased after the issuance of the order, or 
(c) dumping was eliminated after the issuance of the order and import 
volumes for the subject merchandise declined significantly (see section 
II.A.3).
    Consistent with section 752(c) of the Act, the Department 
considered whether dumping continued at any level above de minimis 
after the issuance of the order. In the 1993-94 review (the first 
administrative review) the Department

[[Page 51514]]

determined that the dumping margin for Prayon was zero (61 FR 20227). 
In the subsequent three administrative reviews conducted, however, the 
Department calculated dumping margins above de minimis for Prayon. As 
for Prayon's assertion that it expects dumping margins to decline in 
the future based on the weakened Belgian franc vis-a-vis the dollar, 
the Department cannot anticipate future exchange rates, and therefore, 
cannot rely on Prayon's statement in making a determination.
    In addition, consistent with section 752(c) of the Act, the 
Department also considered whether imports of the subject merchandise 
ceased after the issuance of the order. Utilizing U.S. Census data, the 
Department agrees with the domestic interested parties that imports of 
IPA decreased sharply following the issuance of the order and have only 
occurred in intermittent years, and even then, at levels significantly 
below pre-order levels. However, imports of the subject merchandise 
from Belgium have continued throughout the life of the 
order.4
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    \4\ The Department bases this determination on information 
submitted by the domestic interested parties in their March 31, 
1999, submission, as well as U.S. IM146 Reports, U.S. Department of 
Commerce statistics, U.S. Department of Treasury statistics, and 
information obtained from the U.S. International Trade Commission.
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    Therefore, given that dumping has continued over the life of the 
order and import volumes declined significantly following the 
imposition of the order, the Department preliminarily determines that 
dumping is likely to continue were the order revoked.

Magnitude of the Margin

Interested Parties' Comments

    The domestic interested parties argue that the Department should 
adhere to its normal procedure and report to the Commission the dumping 
margin of 14.67 percent calculated in the original investigation since 
that is the only calculated rate that reflects the behavior of 
exporters without the discipline of the order in place. They argue that 
the most recent margin calculated for Prayon, 4.35 percent, is not a 
true indication of Prayon's actions as it reflects Prayon's pricing 
practices with the antidumping order in place (see March 31, 1999, 
Substantive Response of the domestic interested parties at 13). 
Moreover, they argue, that the 4.35 percent margin is for a period in 
which imports from Prayon were less than half of what they had been 
prior to the issuance of the order. Therefore, they argue, the 4.35 
percent margin clearly should not be used (see id.).
    Prayon argues that should the Department determine that, were the 
order revoked, dumping is likely to continue or recur, the Department 
should find that a dumping margin no higher than the margin found in 
the current review is likely to prevail (see March 31, 1999, 
Substantive Response of Prayon at 6). Here, Prayon is apparently 
referring to the dumping margin of 4.35 percent calculated in the 1996-
97 administrative review.5
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    \5\ See Industrial Phosphoric Acid from Belgium; Final Results 
of Antidumping Duty Administrative Review, 63 FR 55087 (October 14, 
1998).
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Department's Determination

    In the Sunset Policy Bulletin, the Department stated that it 
normally will provide to the Commission the margin that was determined 
in the final determination in the original investigation. Further, for 
companies not specifically investigated or for companies that did not 
begin shipping until after the order was issued, the Department 
normally will provide a margin based on the ``all others'' rate from 
the investigation. (See section II.B.1 of the Sunset Policy Bulletin.) 
Exceptions to this policy include the use of a more recently calculated 
margin, where appropriate, and consideration of duty absorption 
determinations. (See sections II.B.2 and 3 of the Sunset Policy 
Bulletin.)
    The Department agrees with the domestic interested parties. Section 
II.B.2 of the Sunset Policy Bulletin states that if dumping margins 
have declined over the life of an order and imports have remained 
steady or increased, the Department may conclude that exporters are 
likely to continue dumping at the lower rates found in a more recent 
review. However, in this case, imports of the subject merchandise from 
Belgium have fluctuated over the life of the order but have never 
regained their pre-order levels. Therefore, we preliminarily determine 
that the margin from the Department's original investigation is 
probative of the behavior of Belgian producers and exporters of 
industrial phosphoric acid if the order were revoked because that is 
the only calculated rate which reflects the behavior of exporters 
without the discipline of the order in place. We will report to the 
Commission the company-specific and ``all others'' rates from the 
original investigation contained in the Preliminary Results of Review 
section of this notice.

Preliminary Results of Review

    As a result of this review, the Department preliminarily finds that 
revocation of the antidumping duty order would likely lead to 
continuation or recurrence of dumping at the margins listed below:

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/exporter                      (percent)
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Prayon......................................................       14.67
All Others..................................................       14.67
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    Any interested party may request a hearing within 30 days of 
publication of this notice in accordance with 19 CFR 351.310(c). Any 
hearing, if requested, will be held on November 17, 1999. Interested 
parties may submit case briefs no later than November 8, 1999, in 
accordance with 19 CFR 351.309(c)(1)(i). Rebuttal briefs, which must be 
limited to issues raised in the case briefs, may be filed not later 
than November 15, 1999. The Department will issue a notice of final 
results of this sunset review, which will include the results of its 
analysis of issues raised in any such comments, no later than January 
25, 2000.
    This five-year (``sunset'') review and notice are in accordance 
with sections 751(c), 752, and 777(i)(1) of the Act.

    Dated: September 17, 1999.
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-24828 Filed 9-22-99; 8:45 am]
BILLING CODE 3510-DS-P