Market Economy Inputs Practice in Antidumping Proceedings involving Non-Market Economy Countries, 14176-14179 [E6-4069]
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14176
Federal Register / Vol. 71, No. 54 / Tuesday, March 21, 2006 / Notices
We will instruct CBP to continue to
collect cash deposits for non–reviewed
companies covered by this order at the
most recent company–specific rate
applicable to the company. Accordingly,
the cash deposit rate that will be
applied to non–reviewed companies
covered by this order will be the rate for
that company established in the
investigation. See Notice of Amended
Final Affirmative Countervailing Duty
Determination: Dynamic Random
Access Memory Semiconductors from
the Republic of Korea, 68 FR 44290 (July
28, 2003). The ‘‘all others’’ rate shall
apply to all non–reviewed companies
until a review of a company assigned
this rate is requested. The Department
has previously excluded Samsung
Electronics Co., Ltd. from this order. Id.
This notice also serves as a reminder
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This administrative review and notice
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Dated: March 14, 2006.
David M. Spooner,
Assistant Secretary for Import
Administration.
sroberts on PROD1PC70 with NOTICES
APPENDIX I
Comments in the Issues and Decision
Memorandum
Comment 1: Entrustment or Direction of
the December 2002 Restructuring
A. Government of Korea Policy
Towards Hynix
B. Government of Korea Influence of
Creditors
C. Government of Korea’s Influence
over the Creditors’ Council
D. The Deutsche Bank Report
Comment 2: Whether the December
2002 Restructuring Was Commercial
Comment 3: Entrustment or Direction of
the October 2001 Restructuring
Comment 4: Private and Foreign Banks
as Benchmarks
Comment 5: Hynix’s Equityworthiness
Comment 6: Hynix’s Creditworthiness
Comment 7: Ministerial Error Regarding
Financing from Foreign Banks
Comment 8: Ministerial Error Regarding
KDB Fast Track Bonds
Comment 9: Adjustment of Benefit to
Account for Sale of Hynix’s Subsidiaries
Comment 10: Benefits Relating to
Creditors Exercising Appraisal Rights
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Comment 11: Ministerial Errors
Regarding Benchmarks
Comment 12: Value of October 2001 and
December 2002 Equity
Comment 13: Timing of Benefits from
the December 2002 Restructuring
Comment 14: Benchmark for
Creditworthy Companies / Discount
Rate for Debt Forgiveness
Comment 15: Ministerial Errors
Regarding G7/Highly Advanced
National Program
Comment 16: Evasion of the
Countervailing Duty Order
Comment 17: Hynix and the
Government of Korea’s Cooperation and
Disclosure of Information
Dated: March 15, 2006.
J. Marc Chittum,
Executive Secretary, U.S. Travel and Tourism
Advisory Board.
[FR Doc. E6–4082 Filed 3–20–06; 8:45 am]
[FR Doc. E6–4071 Filed 3–20–06; 8:45 am]
AGENCY:
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
U.S. Travel and Tourism Advisory
Board: Meeting of the U.S. Travel and
Tourism Advisory Board
International Trade
Administration, Commerce.
ACTION: Notice of an open meeting.
AGENCY:
The U.S. Travel and Tourism
Advisory Board (Board) will hold a
meeting to discuss a Gulf Coast
Recovery Plan and a Travel and
Tourism Strategic Plan. The Board was
established on October 1, 2003, and
reconstituted on October 1, 2005, to
advise the Secretary of Commerce on
matters relating to the travel and
tourism industry.
DATES: April 12, 2006.
Time: 3 p.m. to 4:30 p.m. (e.s.t.)
ADDRESSES: Room 4832, U.S.
Department of Commerce, 1401
Constitution Avenue, NW., Washington,
DC 20230. This program will be
physically accessible to people with
disabilities. Seating is limited and will
be on a first come, first served basis.
Because of building security, all nongovernment attendees must pre-register.
Requests for sign language
interpretation, other auxiliary aids, or
pre-registration, should be submitted no
later than April 3, 2006, to J. Marc
Chittum, U.S. Travel and Tourism
Advisory Board, Room 4043, 1401
Constitution Avenue, NW., Washington,
DC 20230, 202–482–4501,
Marc.Chittum@mail.doc.gov.
SUMMARY:
J.
Marc Chittum, U.S. Travel and Tourism
Advisory Board, Room 4043, 1401
Constitution Avenue, NW., Washington,
DC 20230, 202–482–4501,
Marc.Chittum@mail.doc.gov.
FOR FURTHER INFORMATION CONTACT:
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BILLING CODE 3510–DR–P
DEPARTMENT OF COMMERCE
International Trade Administration
North American Free Trade Agreement
(NAFTA), Article 1904 Binational Panel
Reviews: Correction of Notice of
Consent Motion to Dismiss Panel
Review, published on March 14, 2006
NAFTA Secretariat, United
States Section, International Trade
Administration, Department of
Commerce.
ACTION: Correction of Notice of Consent
Motion to Dismiss the Panel Review
should have read ‘‘of the final
affirmative countervailing duty
determination made by the International
Trade Administration’’, respecting
Certain Durum Wheat and Hard Red
Spring Wheat from Canada (Secretariat
File No. USA–CDA–2003–1904–05).
Dated: March 15, 2006.
Caratina L. Alston,
United States Secretary, NAFTA Secretariat.
[FR Doc. E6–4010 Filed 3–20–06; 8:45 am]
BILLING CODE 3510–GT–P
DEPARTMENT OF COMMERCE
International Trade Administration
Market Economy Inputs Practice in
Antidumping Proceedings involving
Non-Market Economy Countries
Import Administration,
International Trade Administration,
Department of Commerce.
ACTION: Request for Comments
AGENCY:
SUMMARY: The Department of Commerce
(‘‘the Department’’) is considering
amending its regulations with respect to
the use of market economy inputs in the
calculation of normal value in
antidumping proceedings involving
non–market economy (‘‘NME’’)
countries. Specifically, in cases where
an NME producer sources an input from
both market–economy suppliers and
from within the NME, this regulatory
change would increase the Department’s
flexibility to value the input by weight–
averaging the market economy purchase
price with an appropriate surrogate
value. The Department also intends to
introduce an interim change in its
practice that is consistent with the
Department’s regulations. Interested
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Federal Register / Vol. 71, No. 54 / Tuesday, March 21, 2006 / Notices
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parties are invited to comment on these
proposals.
DATES: Comments must be submitted by
April 19, 2006.
ADDRESSES: Written comments (original
and six copies) should be sent to David
Spooner, Assistant Secretary for Import
Administration, U.S. Department of
Commerce, Central Records Unit, Room
1870, Pennsylvania Avenue and 14th
Street NW., Washington, DC, 20230.
FOR FURTHER INFORMATION CONTACT:
Lawrence Norton, Economist, or
Anthony Hill, Senior International
Economist, Office of Policy, Import
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW, Washington DC, 20230,
202–482–1579 or 202–482–1843,
respectively.
SUPPLEMENTARY INFORMATION:
Background
In antidumping proceedings involving
NME countries, the Department
calculates normal value by valuing the
NME producers’ factors of production,
to the extent possible, using prices from
a market economy that is at a
comparable level of economic
development and that is also a
significant producer of comparable
merchandise. The goal of this surrogate
factor valuation is to use the ‘‘best
available information’’ to determine
normal value. See section 773(c)(1) of
the Tariff Act of 1930 (‘‘the Act’’);
Shangdong Huraong General Corp. v.
United States, 159 F. Supp.2d 714, 719
(CIT 2001). Where an NME producer
purchases inputs from market economy
suppliers and pays in a market economy
currency, however, the Department
normally uses the average actual price
paid by the NME producer for these
inputs to value the input in question,
where possible. See 19 CFR
351.408(c)(1); see also Final
Determination of Sales at Less Than
Fair Value: Oscillating Fans and Ceiling
Fans from the People’s Republic of
China, 56 FR 55271, 55274–75 (October
25, 1991). Where a portion of the input
is purchased from a market economy
supplier and the remainder from a non–
market economy supplier, the
Department will normally use the price
paid for the inputs sourced from market
economy suppliers to value all of the
input1, provided the volume of the
market economy inputs as a share of
total purchases from all sources is
‘‘meaningful,’’ a term used in the
Preamble to the Regulations but which
is interpreted by the Department on a
case–by-case basis. See Antidumping
1 See
19 CFR 351.408(c)(1)
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Duties; Countervailing Duties; Final
Rule, 62 FR 27296, 27366 (May 19,
1997) (Preamble). See also Shakeproof
v. United States, 268 F.3d 1376, 1382
(Fed. Cir. 2001) (Shakeproof). This
market economy input price must also
reflect arms–length, bona fide sales. See
Shakeproof, 268 F.3d at 1382–83.
Additionally, the Department
disregards market economy input
purchases when the prices for such
inputs may be distorted or when the
facts of a particular case otherwise
demonstrate that market economy input
purchase prices are not the best
available information. For example, the
Department disregards all input values
it has reason to believe or suspect might
be dumped or subsidized. See China
National Machinery Import & Export
Corporation v, United States, 293 F.
Supp. 2d 1334 (CIT 2003), as aff’d by
104 Fed. Appx. 183 (Federal Circuit,
July 9, 2004). The Department has also
disregarded the prices of inputs that
could not possibly have been used in
the production of subject merchandise
during the period of investigation or
review. See, e.g., Final Determination of
Sales at Less Than Fair Value: Certain
Frozen and Canned Warmwater Shrimp
from the Socialist Republic of Vietnam,
69 FR 71005 (December 8, 2004). The
Department further does not accept
market economy input purchase prices
when the input in question was
produced within an NME. See Final
Determination of Sales at Less Than
Fair Value: Polyethylene Retail Carrier
Bags from the People’s Republic of
China, 69 FR 34125 and the
accompanying issues and decision
memorandum at Comment 20 (June 18,
2004).
The Department published on May 26
and on August 11 two notices in the
Federal Register requesting comment on
its market economy inputs practice in
NME cases (70 FR 30418 and 70 FR
46816, respectively). Drawing on the
many submissions the Department has
received in response to these notices,
the Department is currently considering
revised proposals. Under the first of
these revised proposals, the Department
would amend its regulations to give it
greater discretion to weight average
market economy input purchase prices
with standard surrogate values when
NME producers source an input both
domestically and from market economy
suppliers based upon the facts of a given
case. This change would remove the
regulatory requirement that the
Department ‘‘normally’’ use market
economy input prices to value an entire
input and allow the Department more
flexibility to consider whether the
standard surrogate value is the best
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available information to value the
domestically purchased input. Under
the second of these revised proposals,
the Department would institute a
rebuttable presumption that market
economy input prices are the best
available information for valuing an
entire input when the portion of the
input purchased from market economy
sources exceeds 33% of the total volume
of the input. This would be consistent
with our current regulations directing
the Department to ‘‘normally’’ use
market economy input prices to value
an entire input.
These two proposals would affect the
Department’s practice in cases where
NME firms purchase a portion of a given
input from a market economy and
source the remainder domestically. In
such cases, the Department must
determine what the best available
information is for valuing the NME–
produced portion of the input, i.e., the
Department must continue to find an
appropriate surrogate value. Whether
the best available information to value
the NME–produced portion of the input
is the price of the firm’s market
economy input purchases or another
surrogate value is a decision that should
be made by the Department on a case–
by-case basis.
While market economy purchase
prices do constitute the best available
information for the portion of an input
sourced from a market economy, these
prices may not always provide the most
accurate valuation for the portion of an
input that is produced from within the
NME. While it may be unduly rigid to
rule out using market economy
purchase prices to value an entire input
if the portion involved were lower than
a particular threshold, neither can the
Department automatically assume
market economy purchases constitute
the best available information to value
the portion of the input produced in the
NME. In some cases, the best available
information is indeed the market
economy purchase price. In other cases
it may not be, and a standard surrogate
value would constitute the best
available information for the NME–
produced portion of the input. For
example, if the market economy price
for an input varied dramatically over the
period of investigation or review, and
the NME firm only purchased from
market economy sources when the
market price was very low (and
otherwise purchased from NME
suppliers), the Department might
determine that a specific, period–wide
surrogate value would constitute a
better surrogate value for the portion of
the input that was produced from
within the NME. While market economy
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Federal Register / Vol. 71, No. 54 / Tuesday, March 21, 2006 / Notices
input purchase prices present a valid
price for the market economy purchases
that an NME firm actually made, and
the Department should use this data
whenever possible to value the portion
of the input purchased from market
economy sources, these prices may not
always be the best available information
for valuing the portion of the input
produced within the NME.
From the foregoing discussion, there
is reason to believe that the most
accurate approach would be to make
case–by-case determinations concerning
whether a market economy input
purchase price or an alternative
surrogate value constitutes the best
available information for valuing the
portion of an input that is produced
within the NME. The regulations
prescribe a preference, however, for the
use of market economy input purchase
prices, when they are available, over the
use of traditional surrogate values.
Under the regulations, the Department
‘‘normally’’ uses market economy input
purchase prices to value an entire input
when they are available, which has the
effect of favoring market economy
purchase prices over surrogate values
and in some cases unnecessarily
excludes surrogate values, even when a
surrogate value might provide a more
accurate valuation for the portion of the
input that is produced within the NME.
Therefore, the Department is
considering beginning the formal
procedures for amending its regulations
to increase the Department’s discretion
to use surrogate values to value the
NME–produced portion of an input.
This regulatory change would increase
the Department’s flexibility to weight
average the market economy input
purchase price with an appropriate
surrogate value for the NME–produced
portion of the input to determine the
overall value to be used for the input.
Because amending the regulation will
be a lengthy process, the Department
also intends to introduce an interim
change in its practice that is consistent
with the Department’s regulations.
Under this interim change, the
Department would clarify that the term
‘‘meaningful,’’ as discussed in the
Preamble, will be interpreted by the
Department as being 33 percent or more
of the total volume of the input used in
production of the subject merchandise,
unless there are case–specific reasons to
conclude otherwise. In other words, the
Department would institute a flexible,
rebuttable presumption that when
market economy input purchases are 33
percent or more of the total volume of
an input, the market economy input
purchase prices represent the ‘‘best
available information’’ to value the
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entire input. Where market economy
input purchases constitute less than 33
percent of the total volume of the input
in question, the Department’s rebuttable
presumption is that the market economy
input purchases do not represent the
‘‘best available information’’ to value
the input. Instead, the Department
would weight average the market
economy purchase prices with an
appropriate surrogate value, unless
parties present evidence that the market
economy purchase value constitutes the
best available information to value the
NME–produced portion of the input.
Introducing such a flexible percentage
threshold for accepting market economy
purchase prices to value an entire input
would improve the accuracy and
predictability of the Department’s
current practice. The higher the ratio of
the market economy–sourced portion to
that produced in the NME, the more
confident the Department can be that
the market economy purchase prices are
indeed representative of the value of the
entire input.
The flexibility of the standard would
allow the Department to continue to
meet its statutory obligation to use the
best available information while
providing guidance to the public as to
how normal value will be determined in
such circumstances. In addition, the
proposed standard of 33 percent is
consistent with a threshold that the
Department has defended, and the Court
has upheld, as constituting a
‘‘meaningful’’ quantity in a prior case.
See Shakeproof, 268 F.3d at 1382–83. A
standard of 33 percent also balances two
competing concerns. First, this standard
would reduce the likelihood that special
arrangements or short–term price
fluctuations might seriously distort the
valuation of the input in that the
Department will only accept these
prices to value the entire input when
they constitute such a meaningful share
of the total volume of the input. Second,
a flexible 33–percent standard is
consistent with our regulatory standard
to ‘‘normally’’ use these prices. We
believe there is merit in establishing
general guidance on when the
Department will use market economy
input purchases to value an entire input
and when it will rely instead on
surrogate values. As discussed above,
the only existing guidance on this point
(beyond that developed through the
Department’s practice, e.g., the
requirement that the input purchased
from a market economy not be dumped
or subsidized) is mentioned in the
Preamble to the regulations, which
indicates that the quantity involved
should be ‘‘meaningful.’’ Such vague
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guidance may create an unnecessary
level of uncertainty for both the
Department and parties about how the
Department will value a given input that
an NME firm purchases both
domestically and from market economy
suppliers.
The Department welcomes comments
on both pursuing a change in the
Department’s regulations and on
adopting, on an interim basis, a flexible,
percentage–based rebuttable
presumption with respect to the use of
market economy purchase prices to
value a factor of production for an NME
firm that purchases the input both
domestically and from market economy
sources. If the Department adopts such
an interim approach, is 33 percent of the
total volume of the input used in the
production of the subject merchandise
an appropriate level for this standard?
Comments
Persons wishing to comment should
file a signed original and six copies of
each set of comments by the date
specified above. The Department will
consider all comments received before
the close of the comment period.
Comments received after the end of the
comment period will be considered, if
possible, but their consideration cannot
be assured. The Department will not
accept comments accompanied by a
request that a part or all of the material
be treated confidentially because of its
business proprietary nature or for any
other reason. The Department will
return such comments and materials to
the persons submitting the comments
and will not consider them in the
development of any changes to its
practice. The Department requires that
comments be submitted in written form.
The Department recommends
submission of comments in electronic
form to accompany the required paper
copies. Comments filed in electronic
form should be submitted either by e–
mail to the webmaster below, or on CD–
ROM, as comments submitted on
diskettes are likely to be damaged by
postal radiation treatment.
Comments received in electronic form
will be made available to the public in
Portable Document Format (PDF) on the
Internet at the Import Administration
website at the following address: https://
ia.ita.doc.gov/.
Any questions concerning file
formatting, document conversion,
access on the Internet, or other
electronic filing issues should be
addressed to Andrew Lee Beller, Import
Administration Webmaster, at (202)
482–0866, email address: webmaster–
support@ita.doc.gov.
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Federal Register / Vol. 71, No. 54 / Tuesday, March 21, 2006 / Notices
Dated: March 15, 2006.
David M. Spooner,
Assistant Secretary for Import
Administration.
[FR Doc. E6–4069 Filed 3–20–06; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF DEFENSE
Office of the Secretary
[No. DoD–2006–OS–0045]
Proposed Collection; Comment
Request
Office of the Under Secretary of
Defense for Acquisition, Technology
and Logistics, Department of Defense.
ACTION: Notice.
sroberts on PROD1PC70 with NOTICES
AGENCY:
In compliance with section
35006(c)(2)(A) of the Paperwork
Reduction Act of 1995, the Under
Secretary of Defense for Acquisition,
Technology, and Logistics announces
the proposed extension of a public
information collection for the proper
performance of the functions of the
agency, including whether the
information shall have practical utility;
the accuracy of Dod’s estimate of the
burden of the proposed information
collection; ways to enhance the quality,
utility, and clarity of the information to
be collected; and ways to minimize the
burden of the information collection on
respondents, including through the use
of automated collection techniques or
forms of information technology.
DATES: Consideration will be given to all
comments received by May 22, 2006.
ADDRESSES: You may submit comments,
identified by docket number and title,
by any of the following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Mail: Federal Docket Management
System Office, 1160 Defense Pentagon,
Washington, DC 20301–1160.
Instructions: All submissions received
must include the agency name, docket
number and title for this Federal
Register document. The general policy
for comments and other submissions
from members of the public is to make
these submissions available for public
viewing on the Internet at https://
www.regulations.gov as they are
received without change, including any
personal identifiers or contact
information.
To
request more information on this
proposed information collection or to
obtain a copy of the proposal and
associated collection instruments,
FOR FURTHER INFORMATION CONTACT:
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19:01 Mar 20, 2006
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please write to the Defense
Standardization Program Office (DSPO),
Defense Logistics Agency, J–307,
Attention: Ms. Karen Bond, 8725 John J.
Kingman Road, Mail Stop 6233, Fort
Belvoir, VA 20060–6221, or contact the
Defense Standardization Program Office
(DSPO) at (703) 767–6871.
Title, Associated Forms, and OMB
Number: Acquisition Management
Systems and Data Requirements Control
List (AMSDL); Numerous Forms; 0704–
0188.
Needs and Uses: The Acquisition
Management Systems and Data
Requirements Control List (AMSDL) is a
list of data requirements used in
Department of Defense (DoD) contracts.
The information collected will be used
by DoD personnel and other DoD
contractors to support the design, test,
manufacture, training, operation, and
maintenance of procured items,
including weapons systems critical to
the national defense.
Affected Public: Business or Other
For-Profit; Not-For-Profit Institutions.
Annual Burden Hours: 26,915,328.
Number of Respondents: 944.
Responses Per Respondent: 432.
Average Burden Per Response: 66
hours.
Frequency: On occasion.
14179
Dated: March 13, 2006.
Patricia L. Toppings,
Alternate OSD Federal Register Liaison
Officer, Department of Defense.
[FR Doc. 06–2680 Filed 3–20–06; 8:45 am]
BILLING CODE 5001–06–M
DEPARTMENT OF DEFENSE
Defense Finance and Accounting
Service, Privacy Act of 1974; Systems
of Records
Defense Finance and
Accounting Service; DoD.
AGENCY:
ACTION:
Notice to alter a system of
records.
SUMMARY: The Defense Finance and
Accounting Service is proposing to alter
a system of records notice in its existing
inventory of records systems subject to
the Privacy Act of 1974, (5 U.S.C. 552a),
as amended.
This proposed action will be
effective without further notice on April
20, 2006 unless comments are received
which result in a contrary
determination.
DATES:
SUPPLEMENTARY INFORMATION:
Freedom of Information
Act/Privacy Act Program Manager,
Defense Finance and Accounting
Service, Denver, 6760 E. Irvington Place,
Denver, CO 80279–8000.
Summary of Information Collection
FOR FURTHER INFORMATION CONTACT:
The Acquisition Management Systems
and Data Requirements Control List
(AMSDL) is a list of data requirements
used in Department of Defense
contracts. Information collection
requests are contained in DoD contract
actions for supplies, services, hardware,
and software. This information is
collected and used by DoD and its
component Military Departments and
Agencies to support the design, test,
manufacture, training, operation,
maintenance, and logistical support of
procured items, including weapons
systems. The collection of such data is
essential to accomplishing the assigned
mission of the Department of Defense.
Failure to collect this information
would have a detrimental effect on the
DoD acquisition programs and the
National Security.
Note: The AMSDL is in coordination for
cancellation. The Defense Standardization
Program Office is waiting for the
coordination of two Services. All others have
coordinated. Once cancelled, the information
used to prepare the burden hours will be
contained in the ASSIST Online database.
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ADDRESSES:
Ms.
Linda Krabbenhoft at (303) 676–6045.
The
Defense Finance and Accounting
Service systems of records notices
subject to the Privacy Act of 1974, (5
U.S.C. 552a), as amended, have been
published in the Federal Register and
are available from the address above.
The proposed system report, as
required by 5 U.S.C. 552a(r) of the
Privacy Act of 1974, as amended, was
submitted on March 9, 2006, to the
House Committee on Government
Reform, the Senate Committee on
Homeland Security and Governmental
Affairs, and the Office of Management
and Budget (OMB) pursuant to
paragraph 4c of Appendix I to OMB
Circular No. A–130, ‘Federal Agency
Responsibilities for Maintaining
Records About Individuals,’ dated
February 8, 1996 (February 20, 1996, 61
FR 6427).
SUPPLEMENTARY INFORMATION:
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]]>Agencies
[Federal Register Volume 71, Number 54 (Tuesday, March 21, 2006)]
[Notices]
[Pages 14176-14179]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-4069]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
Market Economy Inputs Practice in Antidumping Proceedings
involving Non-Market Economy Countries
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Request for Comments
-----------------------------------------------------------------------
SUMMARY: The Department of Commerce (``the Department'') is considering
amending its regulations with respect to the use of market economy
inputs in the calculation of normal value in antidumping proceedings
involving non-market economy (``NME'') countries. Specifically, in
cases where an NME producer sources an input from both market-economy
suppliers and from within the NME, this regulatory change would
increase the Department's flexibility to value the input by weight-
averaging the market economy purchase price with an appropriate
surrogate value. The Department also intends to introduce an interim
change in its practice that is consistent with the Department's
regulations. Interested
[[Page 14177]]
parties are invited to comment on these proposals.
DATES: Comments must be submitted by April 19, 2006.
ADDRESSES: Written comments (original and six copies) should be sent to
David Spooner, Assistant Secretary for Import Administration, U.S.
Department of Commerce, Central Records Unit, Room 1870, Pennsylvania
Avenue and 14\th\ Street NW., Washington, DC, 20230.
FOR FURTHER INFORMATION CONTACT: Lawrence Norton, Economist, or Anthony
Hill, Senior International Economist, Office of Policy, Import
Administration, U.S. Department of Commerce, 14\th\ Street and
Constitution Avenue, NW, Washington DC, 20230, 202-482-1579 or 202-482-
1843, respectively.
SUPPLEMENTARY INFORMATION:
Background
In antidumping proceedings involving NME countries, the Department
calculates normal value by valuing the NME producers' factors of
production, to the extent possible, using prices from a market economy
that is at a comparable level of economic development and that is also
a significant producer of comparable merchandise. The goal of this
surrogate factor valuation is to use the ``best available information''
to determine normal value. See section 773(c)(1) of the Tariff Act of
1930 (``the Act''); Shangdong Huraong General Corp. v. United States,
159 F. Supp.2d 714, 719 (CIT 2001). Where an NME producer purchases
inputs from market economy suppliers and pays in a market economy
currency, however, the Department normally uses the average actual
price paid by the NME producer for these inputs to value the input in
question, where possible. See 19 CFR 351.408(c)(1); see also Final
Determination of Sales at Less Than Fair Value: Oscillating Fans and
Ceiling Fans from the People's Republic of China, 56 FR 55271, 55274-75
(October 25, 1991). Where a portion of the input is purchased from a
market economy supplier and the remainder from a non-market economy
supplier, the Department will normally use the price paid for the
inputs sourced from market economy suppliers to value all of the
input\1\, provided the volume of the market economy inputs as a share
of total purchases from all sources is ``meaningful,'' a term used in
the Preamble to the Regulations but which is interpreted by the
Department on a case-by-case basis. See Antidumping Duties;
Countervailing Duties; Final Rule, 62 FR 27296, 27366 (May 19, 1997)
(Preamble). See also Shakeproof v. United States, 268 F.3d 1376, 1382
(Fed. Cir. 2001) (Shakeproof). This market economy input price must
also reflect arms-length, bona fide sales. See Shakeproof, 268 F.3d at
1382-83.
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\1\ See 19 CFR 351.408(c)(1)
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Additionally, the Department disregards market economy input
purchases when the prices for such inputs may be distorted or when the
facts of a particular case otherwise demonstrate that market economy
input purchase prices are not the best available information. For
example, the Department disregards all input values it has reason to
believe or suspect might be dumped or subsidized. See China National
Machinery Import & Export Corporation v, United States, 293 F. Supp. 2d
1334 (CIT 2003), as aff'd by 104 Fed. Appx. 183 (Federal Circuit, July
9, 2004). The Department has also disregarded the prices of inputs that
could not possibly have been used in the production of subject
merchandise during the period of investigation or review. See, e.g.,
Final Determination of Sales at Less Than Fair Value: Certain Frozen
and Canned Warmwater Shrimp from the Socialist Republic of Vietnam, 69
FR 71005 (December 8, 2004). The Department further does not accept
market economy input purchase prices when the input in question was
produced within an NME. See Final Determination of Sales at Less Than
Fair Value: Polyethylene Retail Carrier Bags from the People's Republic
of China, 69 FR 34125 and the accompanying issues and decision
memorandum at Comment 20 (June 18, 2004).
The Department published on May 26 and on August 11 two notices in
the Federal Register requesting comment on its market economy inputs
practice in NME cases (70 FR 30418 and 70 FR 46816, respectively).
Drawing on the many submissions the Department has received in response
to these notices, the Department is currently considering revised
proposals. Under the first of these revised proposals, the Department
would amend its regulations to give it greater discretion to weight
average market economy input purchase prices with standard surrogate
values when NME producers source an input both domestically and from
market economy suppliers based upon the facts of a given case. This
change would remove the regulatory requirement that the Department
``normally'' use market economy input prices to value an entire input
and allow the Department more flexibility to consider whether the
standard surrogate value is the best available information to value the
domestically purchased input. Under the second of these revised
proposals, the Department would institute a rebuttable presumption that
market economy input prices are the best available information for
valuing an entire input when the portion of the input purchased from
market economy sources exceeds 33[percnt] of the total volume of the
input. This would be consistent with our current regulations directing
the Department to ``normally'' use market economy input prices to value
an entire input.
These two proposals would affect the Department's practice in cases
where NME firms purchase a portion of a given input from a market
economy and source the remainder domestically. In such cases, the
Department must determine what the best available information is for
valuing the NME-produced portion of the input, i.e., the Department
must continue to find an appropriate surrogate value. Whether the best
available information to value the NME-produced portion of the input is
the price of the firm's market economy input purchases or another
surrogate value is a decision that should be made by the Department on
a case-by-case basis.
While market economy purchase prices do constitute the best
available information for the portion of an input sourced from a market
economy, these prices may not always provide the most accurate
valuation for the portion of an input that is produced from within the
NME. While it may be unduly rigid to rule out using market economy
purchase prices to value an entire input if the portion involved were
lower than a particular threshold, neither can the Department
automatically assume market economy purchases constitute the best
available information to value the portion of the input produced in the
NME. In some cases, the best available information is indeed the market
economy purchase price. In other cases it may not be, and a standard
surrogate value would constitute the best available information for the
NME-produced portion of the input. For example, if the market economy
price for an input varied dramatically over the period of investigation
or review, and the NME firm only purchased from market economy sources
when the market price was very low (and otherwise purchased from NME
suppliers), the Department might determine that a specific, period-wide
surrogate value would constitute a better surrogate value for the
portion of the input that was produced from within the NME. While
market economy
[[Page 14178]]
input purchase prices present a valid price for the market economy
purchases that an NME firm actually made, and the Department should use
this data whenever possible to value the portion of the input purchased
from market economy sources, these prices may not always be the best
available information for valuing the portion of the input produced
within the NME.
From the foregoing discussion, there is reason to believe that the
most accurate approach would be to make case-by-case determinations
concerning whether a market economy input purchase price or an
alternative surrogate value constitutes the best available information
for valuing the portion of an input that is produced within the NME.
The regulations prescribe a preference, however, for the use of market
economy input purchase prices, when they are available, over the use of
traditional surrogate values. Under the regulations, the Department
``normally'' uses market economy input purchase prices to value an
entire input when they are available, which has the effect of favoring
market economy purchase prices over surrogate values and in some cases
unnecessarily excludes surrogate values, even when a surrogate value
might provide a more accurate valuation for the portion of the input
that is produced within the NME. Therefore, the Department is
considering beginning the formal procedures for amending its
regulations to increase the Department's discretion to use surrogate
values to value the NME-produced portion of an input. This regulatory
change would increase the Department's flexibility to weight average
the market economy input purchase price with an appropriate surrogate
value for the NME-produced portion of the input to determine the
overall value to be used for the input.
Because amending the regulation will be a lengthy process, the
Department also intends to introduce an interim change in its practice
that is consistent with the Department's regulations. Under this
interim change, the Department would clarify that the term
``meaningful,'' as discussed in the Preamble, will be interpreted by
the Department as being 33 percent or more of the total volume of the
input used in production of the subject merchandise, unless there are
case-specific reasons to conclude otherwise. In other words, the
Department would institute a flexible, rebuttable presumption that when
market economy input purchases are 33 percent or more of the total
volume of an input, the market economy input purchase prices represent
the ``best available information'' to value the entire input. Where
market economy input purchases constitute less than 33 percent of the
total volume of the input in question, the Department's rebuttable
presumption is that the market economy input purchases do not represent
the ``best available information'' to value the input. Instead, the
Department would weight average the market economy purchase prices with
an appropriate surrogate value, unless parties present evidence that
the market economy purchase value constitutes the best available
information to value the NME-produced portion of the input. Introducing
such a flexible percentage threshold for accepting market economy
purchase prices to value an entire input would improve the accuracy and
predictability of the Department's current practice. The higher the
ratio of the market economy-sourced portion to that produced in the
NME, the more confident the Department can be that the market economy
purchase prices are indeed representative of the value of the entire
input.
The flexibility of the standard would allow the Department to
continue to meet its statutory obligation to use the best available
information while providing guidance to the public as to how normal
value will be determined in such circumstances. In addition, the
proposed standard of 33 percent is consistent with a threshold that the
Department has defended, and the Court has upheld, as constituting a
``meaningful'' quantity in a prior case. See Shakeproof, 268 F.3d at
1382-83. A standard of 33 percent also balances two competing concerns.
First, this standard would reduce the likelihood that special
arrangements or short-term price fluctuations might seriously distort
the valuation of the input in that the Department will only accept
these prices to value the entire input when they constitute such a
meaningful share of the total volume of the input. Second, a flexible
33-percent standard is consistent with our regulatory standard to
``normally'' use these prices. We believe there is merit in
establishing general guidance on when the Department will use market
economy input purchases to value an entire input and when it will rely
instead on surrogate values. As discussed above, the only existing
guidance on this point (beyond that developed through the Department's
practice, e.g., the requirement that the input purchased from a market
economy not be dumped or subsidized) is mentioned in the Preamble to
the regulations, which indicates that the quantity involved should be
``meaningful.'' Such vague guidance may create an unnecessary level of
uncertainty for both the Department and parties about how the
Department will value a given input that an NME firm purchases both
domestically and from market economy suppliers.
The Department welcomes comments on both pursuing a change in the
Department's regulations and on adopting, on an interim basis, a
flexible, percentage-based rebuttable presumption with respect to the
use of market economy purchase prices to value a factor of production
for an NME firm that purchases the input both domestically and from
market economy sources. If the Department adopts such an interim
approach, is 33 percent of the total volume of the input used in the
production of the subject merchandise an appropriate level for this
standard?
Comments
Persons wishing to comment should file a signed original and six
copies of each set of comments by the date specified above. The
Department will consider all comments received before the close of the
comment period. Comments received after the end of the comment period
will be considered, if possible, but their consideration cannot be
assured. The Department will not accept comments accompanied by a
request that a part or all of the material be treated confidentially
because of its business proprietary nature or for any other reason. The
Department will return such comments and materials to the persons
submitting the comments and will not consider them in the development
of any changes to its practice. The Department requires that comments
be submitted in written form. The Department recommends submission of
comments in electronic form to accompany the required paper copies.
Comments filed in electronic form should be submitted either by e-mail
to the webmaster below, or on CD-ROM, as comments submitted on
diskettes are likely to be damaged by postal radiation treatment.
Comments received in electronic form will be made available to the
public in Portable Document Format (PDF) on the Internet at the Import
Administration website at the following address: https://
ia.ita.doc.gov/.
Any questions concerning file formatting, document conversion,
access on the Internet, or other electronic filing issues should be
addressed to Andrew Lee Beller, Import Administration Webmaster, at
(202) 482-0866, email address: webmaster-support@ita.doc.gov.
[[Page 14179]]
Dated: March 15, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-4069 Filed 3-20-06; 8:45 am]
BILLING CODE 3510-DS-S
