Countervailing Duty Changed Circumstances Reviews; Request for Comment on Agency Practice, 3107-3109 [E7-1015]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 15 (Wednesday, January 24, 2007)]
[Notices]
[Pages 3107-3109]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-1015]


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DEPARTMENT OF COMMERCE

International Trade Administration


Countervailing Duty Changed Circumstances Reviews; Request for 
Comment on Agency Practice

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

ACTION: Request for comment on agency practice

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EFFECTIVE DATE: January 24, 2007.
SUMMARY: When conducting a countervailing duty changed circumstances 
review for purposes of determining the appropriate cash deposit rate in 
light of a change in a company's name, structure, or ownership, the 
Department's general approach has been to apply the ``successor in 
interest'' analysis that it uses for considering similar types of 
changes in antidumping duty changed circumstances reviews. The 
Department has conducted relatively few changed circumstances reviews 
involving the successorship of companies in the context of 
countervailing duty measures. However, based on recent experience, the 
Department is now considering whether its practice regarding such 
reviews should be revised or clarified.
    This notice highlights various considerations relevant to this 
issue, and provides an opportunity for public comment on whether any 
changes to the Department's current practice regarding countervailing 
duty changed circumstances reviews would be warranted and, 
specifically, what those changes should entail.

DATES: Comments should be submitted within 30 days of the publication 
date of this request for comment.

ADDRESSES: An original and six copies of all written comments should be 
sent to Gregory W. Campbell, Office of Policy, 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: Gregory W. Campbell, Office of Policy, 
Import Administration, U.S. Department of Commerce, Room 3712, 
Pennsylvania Avenue and 14th Street, NW, Washington, DC 20230, (202) 
482-2239.

SUPPLEMENTARY INFORMATION:

Background

    In accordance with section 751(b) of the Tariff Act of 1930, as 
amended (the Act), and 19 CFR 351.216 and 19 CFR 351.221, the 
Department of Commerce (Department) may conduct a review of an 
antidumping (AD) or countervailing duty (CVD) measure where, inter 
alia, an interested party requests such a

[[Page 3108]]

review and there are changed circumstances sufficient to warrant a 
review. In the context of an AD ``changed circumstances review'' 
involving a change in a company's name, structure or ownership, the 
Department relies on its successor-in-interest criteria to determine 
whether the newly named or structured company (``successor company'') 
remains essentially the same as the predecessor company. See, e.g., 
Industrial Phosphoric Acid from Israel; Final Results of Antidumping 
Duty Changed Circumstances Review, 59 FR 6944, 6945 (February 14, 1994) 
(``Industrial Phosphoric Acid''); Notice of Final Results of 
Antidumping and Countervailing Duty Changed Circumstances Reviews; 
Certain Pasta from Italy, 68 FR 41553, 41553 (July 14, 2003).
    Under this analysis, where the evidence demonstrates that the 
successor company operates as the ``same business entity'' as its 
predecessor with respect to the production and sale of the subject 
merchandise, the Department will assign to the successor company the 
existing cash deposit rate of its predecessor. Brass Sheet and Strip 
from Canada; Preliminary Results of Antidumping Duty Administrative 
Review, 57 FR 5128, 5129 (February 12, 1992).
    The Department generally bases its successorship/business entity 
determination in AD changed circumstances reviews on an analysis of the 
following factors: (1) management, (2) production facilities, (3) 
supplier relationships, and (4) customer base. Brass Sheet and Strip 
from Canada; Final Results of Antidumping Duty Administrative Review, 
57 FR 20460 (May 13, 1992). While none of these factors is dispositive 
of the issue, the Department generally considers the new company to be 
the successor company to the predecessor company if its resulting 
operation is not materially dissimilar to that of the predecessor. 
Industrial Phosphoric Acid, 59 FR 6944, 6945.
    However, to the extent that this AD analysis is concerned with the 
pricing behavior of the successor company it might not be entirely 
relevant in the CVD context where price discrimination is not the 
analytical focus. Other factors or considerations (e.g., factors that 
focus on whether subsidies to the predecessor are attributable to the 
successor, or on increased participation in or eligibility for new 
subsidy programs as a result of the changed circumstance) might be more 
relevant.
    In addition, there is also a broader question of whether a 
successorship/business entity analysis generally is too narrowly 
focused when reviewing the changed circumstances of a subsidized 
company. An examination that focuses largely or solely on changes in 
the legal or managerial structure or the productive capacity of a 
company may overlook other important considerations that also may be 
relevant in the context of subsidies and countervailing duties. For 
instance, whether the change (e.g., name change or merger) was 
accompanied or preceded by new subsidies, or had an impact on any 
existing subsidies to the companies involved, also might be a relevant 
consideration.
    One hypothetical example in which a strict successorship/business 
entity analysis might fall short of accurately determining the 
appropriate deposit rate (or level of subsidization) is where a 
producer of subject merchandise, who has been excluded from the order, 
purchases or merges with an unrelated, subsidized producer who has a 
company-specific rate under the order. Even if the combined entity 
(i.e., the successor company) in this hypothetical example operated as 
the same business entity as its predecessor, the changed circumstance 
itself might have resulted in a fundamental change in the nature and 
extent of the subsidization of the successor company. Under this 
scenario, one option might be to assign the rate of the one subsidized 
producer to the successor company. Another option would be to continue 
to exclude the entries of the successor company. This second approach, 
however, might foreclose any possibility of a future administrative 
review of the successor company whose (expanded) operations have 
already been determined to be subsidized, at least in part. In 
circumstances such as these, it might be appropriate for the Department 
to take into account other factors that go beyond a strict business 
entity analysis to determine the appropriate cash deposit rate for the 
successor company in a CVD proceeding.
    A related question is whether, if the subsidy levels have been 
affected by the changed circumstances, the Department should calculate 
a new cash deposit rate in the changed circumstances review that 
reflects the new level of subsidization or, alternatively, whether the 
Department should self-initiate an administrative review. Another 
approach would be for the Department to simply select a rate from among 
existing cash deposit rates (e.g., the predecessor's rate, the all 
others rate, some combination of the existing rates).
    In commenting on these issues, we invite commenters to identify and 
discuss the criteria that they consider most appropriate for a 
successorship/business entity analysis in the CVD context, whether they 
may be the same as the AD criteria, some mix of those criteria and 
others, or an entirely different set of criteria. We further invite 
commenters to address whether and how the Department's analysis might 
extend beyond the successorship/business entity analysis to consider 
more directly any changes in the company's level of subsidization 
occasioned by the changed circumstance. Such comments should also 
address the feasibility of identifying or even quantifying changes in 
subsidy levels given the shorter deadlines of changed circumstances 
reviews and the potentially significant increase in required 
information (e.g., detailed sales and subsidy data), participatory 
burden (e.g., of the respondent company and government), and 
administrative burden such an analysis might entail.
    Suggested practical solutions for addressing possible feasibility 
concerns are encouraged. For example, one possible approach to 
mitigating the burden might be to conduct a staged analysis where, if 
the initial data indicate that the only change has been to the name of 
a company (i.e., the change was not accompanied or prompted by a 
substantial change to the company's ownership or operations), no 
further analysis of changes in the subsidy levels would be necessary 
and the successor company would receive the predecessor's cash deposit 
rate. However, if the changed circumstances entail more than a simple 
name change, and the evidence indicates that the changes could have a 
significant impact on the level of subsidy benefits to the successor 
company, then the successor company could be assigned the all others 
rate until the subsidy levels could be fully analyzed in the course of 
an administrative review.

Comments

    Persons wishing to comment should file a signed original and six 
copies of each set of comments by 5:00 p.m. on the above-referenced 
deadline date. 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 requires that comments 
be submitted in written form. All comments responding to this notice 
will be a matter of public record and will be available for public 
inspection and

[[Page 3109]]

copying at Import Administration's Central Records Unit, Room B-099, 
between the hours of 8:30 a.m. and 5 p.m. on business days. 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 development of any changes to 
its practice.
    The Department also 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 Web 
site 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, 
e-mail address: webmaster-support@ita.doc.gov.
    All written comments should be sent to Gregory W. Campbell, Office 
of Policy, Import Administration, U.S. Department of Commerce, Central 
Records Unit, Room 1870, Pennsylvania Avenue and 14th Street NW., 
Washington, DC 20230, Subject: Countervailing Duty Changed 
Circumstances Reviews; Request for Comment on Agency Practice.

    Dated: January 17, 2007.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E7-1015 Filed 1-23-07; 8:45 am]
BILLING CODE 3510-DS-S