Antidumping Proceedings: Calculation of the Weighted-Average Dumping Margin and Assessment Rate in Certain Antidumping Duty Proceedings; Final Modification, 8101-8114 [2012-3290]
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Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Rules and Regulations
DEPARTMENT OF COMMERCE
International Trade Administration
19 CFR Part 351
[Docket No. 101130598–2109–03]
RIN 0625–AA87
Antidumping Proceedings: Calculation
of the Weighted-Average Dumping
Margin and Assessment Rate in
Certain Antidumping Duty
Proceedings; Final Modification
Import Administration,
International Trade Administration,
Department of Commerce.
ACTION: Final rule; Final Modification.
AGENCY:
The Department of Commerce
(‘‘the Department’’) is modifying its
methodology regarding the calculation
of the weighted-average dumping
margins and antidumping duty
assessment rate in certain segments of
antidumping duty proceedings
(hereinafter, ‘‘Final Modification for
Reviews’’). Currently, in a review of an
antidumping duty order conducted
under 19 CFR 351.213 (administrative
review), 351.214 (new shipper review),
and 351.215 (expedited antidumping
review) (collectively ‘‘reviews’’), the
Department usually makes comparisons
between transaction-specific export
prices and average normal values and
does not offset the amount of dumping
that is found with the results of
comparisons for which the transactionspecific export price, or constructed
export price, exceeds normal value.
Several World Trade Organization
(‘‘WTO’’) dispute settlement reports
have found that the United States’
application of these methodologies was
inconsistent with its WTO obligations.
Under this Final Modification for
Reviews, the Department will calculate
weighted-average margins of dumping
and antidumping duty assessment rates
in a manner which provides offsets for
non-dumped comparisons while using
monthly average-to-average (‘‘A–A’’)
comparisons in reviews, paralleling the
WTO-consistent methodology that the
Department applies in original
investigations. The Department is also
modifying its practice in five-year
(‘‘sunset’’) reviews, such that it will not
rely on weighted-average dumping
margins that were calculated using the
methodology found to be WTOinconsistent. The schedule for
implementing these changes is set forth
in the ‘‘Timetable’’ section in
SUPPLEMENTARY INFORMATION.
DATES: This Final Rule and Final
Modification for Reviews are effective
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SUMMARY:
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April 16, 2012. The modification in the
methodology will apply to preliminary
determinations issued after April 16,
2012.
FOR FURTHER INFORMATION CONTACT:
Rachael Nimmo, U.S. Department of
Commerce, 14th Street and Constitution
Avenue NW., Washington, DC 20230;
telephone: 202–482–0836.
SUPPLEMENTARY INFORMATION:
Background
In antidumping duty proceedings, the
Department determines margins of
dumping by comparing normal value
with the export price 1 of comparable
merchandise. Prior to this Final Rule
and Final Modification for Reviews, the
Department typically has compared
normal value and export price using the
average-to-transaction (‘‘A–T’’) method,
which involved a comparison of the
weighted-average normal value 2 to the
export price of individual transactions
for comparable merchandise. When
aggregating the results of these
comparisons to determine the weightedaverage margin of dumping in a review,
the Department did not offset the results
of the comparisons for which export
price was less than normal value by the
results of comparisons for which export
price exceeded normal value.3 When
determining importer-specific
assessment rates in a review, the
Department similarly aggregated the
results of importer-specific comparison
results and did not offset the
comparison results for which export
price was less than normal value by the
comparison results for which export
price exceeded normal value.
This methodology was challenged as
being inconsistent with the WTO
General Agreement on Tariffs and Trade
1994 (‘‘GATT 1994’’) and the Agreement
on Implementation of Article VI of the
GATT 1994 (‘‘Antidumping
Agreement’’) in several disputes.4 The
1 The Department may also use constructed
export prices, if appropriate. Because the use of
export prices or constructed export prices is not
relevant to the substance of this notice, the
Department refers only to export prices hereafter.
2 In addition to weighted-average comparison
market prices, the Department may base normal
value on constructed value or appropriately valued
factors of production, where required by law or
regulation.
3 Section 771(35)(A) of the Tariff Act of 1930
(‘‘the Act’’) defines the dumping margin as the
amount by which normal value ‘‘exceeds’’ export
price (or constructed export price). Section
771(35)(B) defines the weighted-average dumping
margin as the percentage determined by dividing
the aggregate dumping margins determined for a
specific exporter or producer by the aggregate
export or constructed export price of that exporter
or producer.
4 United States-Laws, Regulations and
Methodology for Calculating Dumping Margins
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WTO Appellate Body in US—Zeroing
(EC), US—Zeroing (Japan), US—
Stainless Steel (Mexico), and US—
Continued Zeroing (EC) found the
denial of offsets for non-dumped
comparisons in antidumping duty
reviews to be inconsistent with Article
9.3 of the Antidumping Agreement and
Article VI:2 of the GATT 1994, either
‘‘as such,’’ or ‘‘as applied’’ in certain
reviews, or both.5 The WTO Dispute
Settlement Body has adopted the
dispute settlement panel reports, as
modified by the WTO Appellate Body,
which found the denial of offsets for
non-dumped comparisons in reviews to
be inconsistent with the United States’
WTO obligations.
Additionally, in US—Zeroing (EC),
US—Zeroing (Japan), and US—
Continued Zeroing (EC), the WTO
Appellate Body found that the reliance
on weighted-average margins of
dumping calculated without granting
offsets for non-dumped comparisons as
the basis for determinations made in
certain sunset reviews was inconsistent
with Article 11.3 of the Antidumping
Agreement.6 In US—Zeroing (Japan),
the WTO Appellate Body also found
that the denial of offsets for nondumped comparisons in original
antidumping duty investigations using
transaction-to-transaction (‘‘T–T’’)
comparisons 7 was inconsistent with
(‘‘Zeroing’’) (‘‘US—Zeroing (EC)’’), WT/DS294/R,
WT/DS294/AB/R, adopted May 9, 2006; United
States-Measures Related to Zeroing and Sunset
Reviews (‘‘US—Zeroing (Japan)’’), WT/DS322/R,
WT/DS322/AB/R, adopted Jan. 23, 2007; United
States-Final Anti-Dumping Measures on Stainless
Steel from Mexico (‘‘US—Stainless Steel (Mexico)’’),
WT/DS344/R, WT/DS344/AB/R, adopted May 20,
2008; United States-Continued Existence and
Application of Zeroing Methodology (‘‘US—
Continued Zeroing (EC)’’), WT/DS350/R, WR/
DS350/AB/R, adopted Feb. 19, 2009.
5 US—Zeroing (EC), WT/DS294/R, WT/DS294/
AB/R, para. 263(a)(i); US—Zeroing (Japan), WT/
DS322/R, WT/DS322/AB/R, para. 190(c) & 190(e);
US—Stainless Steel (Mexico), WT/DS344/R, WT/
DS344/AB/R, paras. 165(a) & 165(b); US—
Continued Zeroing (EC), WT/DS350/R, para. 8.1(e),
WT/DS350/AB/R, paras. 395(a)(v), 395(d) &
395(e)(ii).
6 US—Zeroing (EC), WT/DS294/AB/RW, para.
469(h)(iv) & (vi); US—Zeroing (Japan), WT/DS322/
AB/R, para. 190(f); US—Continued Zeroing (EC),
WT/DS350/R, para. 8.1(f), WT/DS350/AB/R, para.
395 (f).
7 Pursuant to section 777A(d)(1)(A) of the Act, in
an investigation, the Department may determine
whether the subject merchandise is being sold at
less than fair value by comparing normal values of
individual transactions to the export prices of
individual transactions for comparable merchandise
(the transaction-to-transaction comparison method).
The Department’s regulations state that the
Department will use the transaction-to-transaction
method only in unusual situations, such as when
there are very few sales of subject merchandise and
the merchandise sold in each market is identical or
very similar or is custom-made. 19 CFR
351.414(c)(1).
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Articles 2.4 and 2.4.2 of the
Antidumping Agreement.8 The WTO
Appellate Body, in US—Zeroing
(Japan), further found that the denial of
offsets for non-dumped comparisons in
antidumping duty new shipper reviews
was inconsistent with Articles 2.4 and
9.5 of the Antidumping Agreement.9
Following these adverse findings, the
United States Trade Representative
(‘‘USTR’’), informed the WTO Dispute
Settlement Body (DSB), that the United
States intended to comply with its WTO
obligations in these disputes.10 Pursuant
to section 123(f) of the Uruguay Round
Agreements Act (‘‘URAA’’), the USTR
notified the House Ways and Means and
Senate Finance Committees of the
adverse findings, and further consulted
with these committees concerning
implementation.
Pursuant to section 123(g)(1) of the
URAA, on December 28, 2010, the
Department published a notice in the
Federal Register proposing to modify its
methodology for calculating weightedaverage margins of dumping and
antidumping duty assessment rates to
provide offsets for non-dumped
comparisons while using monthly A–A
comparisons in reviews, in a manner
that parallels the WTO-consistent
methodology the Department currently
applies in original antidumping duty
investigations. Antidumping
Proceedings: Calculation of the
Weighted Average Dumping Margin and
Assessment Rate in Certain
Antidumping Duty Proceedings, 75 FR
81533 (December 28, 2010) (‘‘Proposed
Modification for Reviews’’). In that
notice, the Department solicited
comments on its proposal. On February
1, 2011, the Department extended the
period of time for the submission of
comments. Antidumping Proceedings:
Calculation of the Weighted Average
Dumping Margin and Assessment Rate
in Certain Antidumping Duty
Proceedings, 76 FR 5518 (Feb. 1, 2011).
In September, 2011, pursuant to
section 123(g)(1)(D) of the URAA, the
USTR submitted a report to the House
Ways and Means and Senate Finance
Committees describing the proposed
modification, the reasons for the
modification, and a summary of the
advice USTR had sought and obtained
from relevant private sector advisory
8 US—Zeroing (Japan), WT/DS322/AB/R, para.
190(b).
9 Id., para. 190(d).
10 See WT/DSB/M/213 at para. 2 (minutes of U.S.
statement at May 30, 2006 DSB meeting), WT/DSB/
M/226 at para. 34 (minutes of U.S. statement at Feb.
20, 2007 DSB meeting), WT/DSB/M/251 at para. 9
(minutes of U.S. statement at June 2, 2008 DSB
meeting), WT/DSB/M/266 at para. 57 (minutes of
U.S. statement at March 20, 2009 DSB meeting).
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committees pursuant to section
123(g)(1)(B) of the URAA. Also in
September, 2011, pursuant to section
123(g)(1)(E) of URAA, the USTR,
working with the Department of
Commerce, began consultations with
both congressional committees
concerning the proposed contents of the
final rule and final modification. This
notice is published pursuant to section
123(g)(1)(F) of the URAA.
Final Modification for Calculating the
Weighted-Average Dumping Margin and
Assessment Rate in Certain
Antidumping Duty Proceedings
After considering all of the comments
submitted, the Department is adopting
the proposed changes to its
methodology for calculating weightedaverage margins of dumping and
antidumping duty assessment rates to
provide offsets for non-dumped
comparisons when using monthly A–A
comparisons in reviews, in a manner
that parallels the WTO-consistent
methodology the Department currently
applies in original antidumping duty
investigations. In reviews, except where
the Department determines that
application of a different comparison
method is more appropriate, the
Department will compare monthly
weighted-average export prices with
monthly weighted-average normal
values, and will grant an offset for all
such comparisons that show export
price exceeds normal value in the
calculation of the weighted-average
margin of dumping and antidumping
duty assessment rate. Where the
weighted-average margin of dumping for
the exporter is determined to be zero or
de minimis, no antidumping duties will
be assessed.
In adopting this Final Modification for
Reviews, the Department’s intention is
to apply a comparison methodology in
reviews that parallels the WTOconsistent methodology the Department
currently applies in original
investigations,11 which will necessarily
include any exceptional or alternative
comparison methods that are
determined appropriate to address casespecific circumstances. Accordingly,
similar to the conduct of original
investigations, when conducting
reviews under the modified
methodology, the Department will
determine on a case-by-case basis
whether it is appropriate to use an
alternative comparison methodology by
examining the same criteria that the
11 See Antidumping Proceedings: Calculation of
the Weighted-Average Dumping Margin During an
Antidumping Investigation; Final Modification, 71
FR 77722 (Dec. 27, 2006) (‘‘Final Modification for
Investigations’’).
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Department examines in original
investigations pursuant to section
777A(d)(1)(A) and (B) of the Act.
The Department has rarely applied
the transaction-to-transaction method in
original antidumping duty
investigations. In the most recent
original investigation in which the
Department calculated the weightedaverage margins of dumping using T-T
comparisons, the Department did not
grant offsets for non-dumped
comparisons.12 The WTO Appellate
Body has found the denial of offsets for
non-dumped comparisons in original
investigations using T-T comparisons to
be inconsistent with the WTO
obligations of the United States. To the
extent that any prior original
antidumping duty investigations using
T-T comparisons could be construed as
establishing a practice of the
Department with respect to the granting
or denial of offsets for non-dumped
comparisons when calculating the
weighted-average margin of dumping,
the Department hereby withdraws any
such practice. Specifically, if the
Department applies the T-T comparison
methodology in a future antidumping
duty proceeding, it will do so without
reference to, or reliance on, any prior
practice with regard to the issue of
offsets because any such practice has
been withdrawn.
In order to implement the revised
methodology, it is necessary to modify
certain provisions of the Department’s
regulations. In particular, 19 CFR
351.414(a) and (c) indicate a preference
for making A-T comparisons in reviews.
These provisions will be modified to
permit application of A-A comparisons
in reviews in a manner that parallels the
comparison methods used in original
investigations. In addition, sections
351.414(d)(3) and (e) of the
Department’s regulations set forth the
time periods over which weighted
averages are calculated. Section
351.414(d)(3) provides that when
applying the A-A method, the weighted
averages will normally be calculated
over the entire period of investigation or
review, unless another averaging period
is deemed appropriate. Section 351.414
(e) provides that when applying the AT method in a review, the Department
will calculate weighted-average normal
values on a monthly basis.13 The
12 See Notice of Determination Under Section 129
of the Uruguay Round Agreements Act;
Antidumping Measures Concerning Certain
Softwood Lumber Products from Canada, 70 FR 22,
636 (May 2, 2005).
13 The Department recognizes that the Statement
of Administrative Action (‘‘SAA’’) states that ‘‘the
preferred methodology in reviews will be to
compare average to individual export prices’’
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Department currently relies on monthly
weighted-average normal values when
calculating dumping margins in
reviews, and departing from monthly
averaging is not necessary to comply
with the WTO findings. Accordingly,
the Department is modifying section
351.414(d)(3) to permit weighted
averages normally to be calculated on a
monthly basis in reviews, regardless of
the comparison method used.
Conforming changes to section
351.414(e) will ensure sections
351.414(d)(3) and (e) do not contain
redundant language. The language for
the modified provisions is set forth at
the end of this notice.
With respect to the findings of
inconsistency in certain of the
Department’s sunset reviews,14 the
Department notes that the underlying
issue is the methodology for calculating
weighted-average dumping margins in
original investigations and reviews,
which is addressed by the modifications
the Department has made with respect
to investigations and is making herein
with respect to reviews. When making
a sunset determination, the statute
requires administrative review margins
to be ‘‘considered’’ but does not require
that the Department rely on such
margins exclusively or in a particular
manner in making its determination
whether dumping will continue or recur
if the antidumping order were to be
revoked.15 Notwithstanding the
Department’s prior practice of relying
on margins determined in the original
investigation and subsequent reviews
when determining whether dumping is
likely to continue in the absence of an
antidumping order,16 the Department
will modify its practice in five-year
sunset reviews, such that it will not rely
on weighted-average dumping margins
that were calculated using the
methodology determined by the
Appellate Body to be WTO-inconsistent
in US—Zeroing (EC), US—Zeroing
(Statement of Administrative Action, p, 843, H. Doc.
No. 103–316, vol. 1 (1994)); however, in order to
implement the findings in the WTO dispute
settlement reports, the Department will restrict the
use of that preferred methodology to situations in
which the Department, on the basis of the facts of
the specific administrative review, determines that
average-to-transaction comparisons are more
appropriate than average-to-average comparisons.
14 US—Zeroing (EC), WT/DS294/AB/RW, para.
469(h)(iv) & (vi), US—Zeroing (Japan), WT/DS322/
AB/R, para. 190(f); US—Continued Zeroing (EC),
WT/DS350/R, para. 8.1(f), WT/DS350/AB/R, para.
395 (f).
15 See section 752(c)(1) of the Act.
16 See e.g., Certain Circular Welded Carbon Steel
Pipes and Tubes From India, Thailand, and Turkey;
Final Results of Expedited Five-Year (‘‘Sunset’’)
Reviews of Antidumping Duty Orders, 76 FR 66893
(Oct. 28, 2011), and accompanying Issues and
Decision Memorandum, at Cmt. 1.
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(Japan), and US—Continued Zeroing
(EC). However, only in the most
extraordinary circumstances will the
Department rely on margins other than
those calculated and published in prior
determinations, pursuant to 19 CFR
351.218(e)(2).
The Department does not anticipate
that it will need to recalculate the
dumping margins in the vast majority of
future sunset determinations to avoid
WTO inconsistency, apart from the
‘‘most extraordinary circumstances’’
provided for in its regulations. Instead,
the Department will limit its reliance to
margins determined or applied during
the five-year sunset period that were not
determined in a manner found to be
WTO-inconsistent in these disputes.
Future dumping margins in reviews will
be determined in accordance with this
Final Modification for Reviews. The
Department may also rely on past
dumping margins that were not affected
by the WTO-inconsistent methodology,
such as dumping margins recalculated
pursuant to Section 129 proceedings,
dumping margins determined based on
the use of adverse facts available, and
dumping margins where no offsets were
denied because all comparison results
were positive. If the dumping margins
determined in a manner not found to be
WTO-inconsistent in these disputes
indicate that dumping continued with
the discipline of the order in place,
those dumping margins alone can form
the basis for a determination that
dumping will continue or recur if the
order were to be revoked. Additionally,
if dumping margins decline over the
five-year sunset period, or if there are no
dumping margins during the five-year
sunset period, decreased volumes may
provide another basis to determine that
dumping is likely to continue or recur
if the discipline of the order is removed.
Assessment Rates
Pursuant to section 751(a)(2)(A) of the
Act, and 19 CFR 351.212(b), the
Department will determine, and U.S.
Customs and Border Protection (CBP)
will assess, antidumping duties on all
appropriate entries. When an
administrative review is conducted, and
where the weighted-average margin of
dumping for the exporter or producer is
determined to be greater than de
minimis, the Department will calculate
an importer-specific ad valorem
assessment rate for each importer of
subject merchandise covered by the
review. 19 CFR 351.212(b)(1). Importerspecific assessment rates will be
calculated in the same manner as the
exporter’s dumping margin, on the basis
of average-to-average comparisons using
only the transactions associated with
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that importer with offsets being
provided for non-dumped comparisons.
Where the weighted-average margin of
dumping for the exporter or producer is
determined to be zero or de minimis, no
assessment rates will be calculated and
the Department will instruct CBP to
liquidate all imports from the exporter
or producer without regard to
antidumping duties.
Analysis of Comments Received
Numerous comments and rebuttal
comments were submitted in response
to the Proposed Modification for
Reviews. The Department has carefully
considered each of the comments
submitted. It has grouped and
summarized the comments according to
common themes and has responded
accordingly.
Average-to-Average Comparison
Methodology in Reviews
Several commentators argue that the
proposal to move to an A-A comparison
methodology in reviews is
unnecessarily complex. These
commentators suggest that compliance
can be achieved by simply eliminating
the use of zeroing in the A-T
comparison methodology. They note
that this would only require the
elimination of one line of programming.
One commentator is concerned that
the Department has not adequately
explained why it is necessary to alter its
current dumping calculation
methodology in reviews from an A-T
methodology to one using monthly
weighted averages in both markets.
Some request that the Department
clarify whether it will grant offsets for
negative dumping margins only against
positive dumping margins found in the
same month or apply negative dumping
margins to offset positive dumping
margins across the entire period of
review (POR). Some argue that only a
complete POR-wide offset will be
consistent with the Department’s
current offset methodology applied in
original antidumping duty
investigations and with WTO
obligations.
Many are not in favor of relying on
the A-A comparison methodology as the
preferred method for reviews because of
its potential to mask dumping. Some
commentators argue that using the A-A
methodology in reviews would not be in
compliance with the statute and the
SAA, and thus would not withstand
judicial scrutiny. Eliminating entryspecific antidumping duty assessments
would violate sections 751(a)(2)(A) and
(C) of the Act, which require the
Department to make entry-specific
assessments. The preference for a
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transaction-specific approach is
confirmed by the SAA, and is supported
by the statutory language, which
indicates the Department will determine
normal value and export price for ‘‘each
entry.’’
A few argue that nothing in the statute
provides discretion for the Department
to use either A-A or T-T in reviews, and
that the statutory construction would
make no sense if Congress intended for
any of the three methods to be used in
both investigations and reviews.
Congress envisioned and required the
Department to determine an individual
margin of dumping for each U.S. entry,
and nowhere indicated that margins
should be calculated for averaging
groups.
Several commentators note that
nothing in the WTO Appellate Body
(AB) rulings or the WTO Antidumping
Agreement requires the Department to
adopt an A-A approach in reviews. They
argue that the Department should not
confine itself to a single ‘‘one size-fits
all’’ approach, but instead, leave open
the option of selecting the comparison
method (A-A, T-T, or A-T) on a casespecific basis to capture the maximum
amount of dumping. Some
commentators argue that given that the
preferred method as cited in the SAA is
A-T, the Department should keep this
option open. Some commentators also
argue that the T-T method would be a
good option in many instances,
asserting that advancements in
computer technology have eliminated
much of the administrative burden
associated with the use of the T-T
method.
Department Position: As previously
indicated, the Department is adopting a
methodology that parallels the WTOconsistent methodology it adopted
earlier in connection with original
antidumping duty investigations. The
Department disagrees that adopting a
methodology with which it is already
familiar and experienced in
administering is an unnecessarily
complex approach. In addition, while
the Department has previously adopted
an interpretation of section 771(35) of
the Act such that non-dumped A-A
comparison results offset the aggregate
amount of dumping in the numerator of
the weighted-average dumping margin,
the Department has not adopted such an
interpretation for the results of A-T
comparisons. The Department finds that
this approach preserves the A-T
comparison methodology as a distinct
comparison method that is an
alternative to the A-A comparison
method.
Previous to this modification, the
Department has generally used A-T
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comparisons in reviews, with monthly
average normal values as required by
section 777A(d)(2) of the Act. The
Department did not find that it was
necessary to depart from the use of
monthly average normal values to adopt
the A-A comparison method in reviews.
To facilitate contemporaneous
comparisons, the Department will
utilize monthly average export prices in
making A-A comparisons in reviews.
The monthly averages will be compared
to monthly average normal values and
the results will be aggregated with
offsets being provided for non-dumped
comparisons. Those offsets will be
provided regardless of the month,
model, level of trade, etc. for the other
comparison(s) found to have been
dumped.
With respect to the potential for
masked dumping as a reason not to
prefer the use of A-A comparisons in
reviews, the Department does not agree
that the potential for masked dumping
means that A-A comparisons are
unsuitable as the default basis for
determining the weighted-average
dumping margins and antidumping
duty assessment rates in reviews.
Similar to the conduct of original
investigations, when conducting
reviews under the modified
methodology, the Department will
determine, on a case-by-case basis,
whether it is appropriate to use an
alternative comparison methodology by
examining the same criteria the
Department examines in original
investigations pursuant to sections
777A(d)(1)(A) and (B) of the Act.
With respect to the question of
consistency with existing U.S. law, the
Department does not interpret the Act to
prohibit A-A comparisons from being
utilized as a basis to determine
weighted-average dumping margins and
assessment rates in reviews. Nor does
any provision of the Act articulate a
mandate to use A-T comparisons in
reviews. Section 777A(d)(2) simply
directs how A-T comparisons should be
made when such comparisons are used.
This provision differs markedly from
section 777A(d)(1), which specifically
provides criteria for selecting a
comparison methodology in original
antidumping duty investigations. The
Department interprets this statutory
structure as mandating certain criteria
for selecting a comparison methodology
in original antidumping duty
investigations, but leaving the
Department considerable discretion in
selecting an appropriate comparison
methodology in reviews. It is, therefore,
within the Department’s discretion to
establish criteria for the selection of an
appropriate comparison methodology in
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reviews, including criteria that differ
from, or are similar to, the criteria
mandated for use in original
antidumping duty investigations.
The Department disagrees with
comments suggesting that sections
751(a)(2)(A) and (C) of the Act preclude
the use of A-A comparisons in reviews.
Section 777A(d) of the Act provides for
three distinct comparison
methodologies by which dumping
margins may be determined. Section
751(a)(2), in contrast, does not make
reference to any specific comparison
methodology to be used in reviews.
Accordingly, the Department considers
that any of the three comparison
methodologies satisfies the
requirements of section 751(a)(2).
Moreover, section 751(a)(2) does not
make reference to either the weightedaverage dumping margin or the
importer-specific antidumping duty
assessment rate that is the specific
subject of this modification. These
particular results of reviews are not
specifically mandated by section
751(a)(2), but are instead features of the
Department’s long-standing practice in
reviews. Both the weighted-average
dumping margin and the importerspecific antidumping duty assessment
rate are the product of aggregating
comparison results obtained using one
of the three comparison methodologies.
While calculation of these rates depends
on transaction-specific data, and these
rates are applied to entries at the time
of entry or upon liquidation, they do not
involve entry-by-entry determinations of
dumping or antidumping duty
assessment. The courts have affirmed
these features of the Department’s
practice, confirming that section
751(a)(2) does not mandate an entry-byentry determination of dumping and
antidumping duties.17
With respect to the language of the
SAA 18, this language does not clarify
the meaning of any statutory provision
to the effect that A-T comparisons are
mandatory or that A-A comparisons are
prohibited in reviews. Instead, the SAA
makes the point that, in contrast to the
situation with regard to original
antidumping duty investigations, a
17 See e.g.,Timken Co. v. United States, 354 F.3d
1334, 1341–42 (Fed. Cir. 2004), cert den’d 543 U.S.
976 (Nov. 1, 2004); Corus Staal BV v. DOC, 395 F.3d
1343, 1347 (Fed. Cir. 2005), cert. denied, 126 S.Ct.
1023 (Jan. 9, 2006).
18 Statement of Administrative Action, at p. 843,
H. Doc. No. 103–316, vol. 1 (1994) (‘‘The Agreement
reflects the express intent of the negotiators that the
preference for the use of an average-to-average or
transaction-to-transaction comparison be limited to
the ‘‘investigation phase’’ of an antidumping
proceeding. Therefore, as permitted by Artcle 2.4.2,
the preferred methodology in reviews will be to
compare average to individual export prices.’’)
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preference for A-T comparisons is not
inconsistent with Article 2.4.2 of the AD
Agreement. Whereas it has been the
Department’s long-standing practice to
prefer A-T comparisons in reviews, this
practice has not been codified in the
statute and it remains within the
Department’s discretion to alter this
practice upon providing a reasoned
explanation. The Department finds
adopting a methodology that parallels
the WTO-consistent methodology it
adopted earlier in original investigations
using A-A comparisons will facilitate
the administration of a change to
comply with WTO dispute settlement
findings on zeroing.
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Continued Effectiveness of the
Antidumping Remedy
Several commentators argue that
allowing offsets for non-dumped
comparisons will reduce the
effectiveness of U.S. trade laws because
it would reduce or eliminate the amount
of dumping that would otherwise be
fully captured in the absence of any
offsets. In so doing, the proposal would
go against the current law’s mandate
that 100 percent of the dumping be fully
captured. To illustrate this point, some
draw on the ‘‘speeding ticket’’ analogy,
whereby a driver caught exceeding the
speed limit could nevertheless avoid the
fine by submitting evidence that he or
she drove below the speed limit on
another occasion. One commentator
noted that the EU and Japan have
acknowledged that dumping can be
masked completely through the
provision of offsets by asserting that
dumping would not exist but for the
denial of offsets. These commentators
also argue that, if the Department
decides to provide offsets, it should
allow itself the greatest flexibility to
account for the maximum amount of
dumping.
Several commentators suggest that the
Department should consider all three
possible comparison methodologies
when conducting reviews, and select
whichever method captures the
maximum amount of dumping. Some
argue that the T–T method would
capture the greatest amount of dumping,
and that recent technology permits
greater use of this comparison
methodology. Several further suggest
that the Department should indicate a
willingness to use averaging for
whichever time period captures the
most dumping (e.g., daily, weekly,
monthly, or period-wide). One
commentator notes that because many
agricultural products are perishable, and
domestic producers can be harmed via
short-term (i.e., daily or weekly) price
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suppression, maximum flexibility
should be maintained.
Some commentators suggest that, in
addition to maintaining flexibility in
comparison methodologies, the
Department should also implement
additional changes unrelated to the
revised comparison methodology on
zeroing, to antidumping policies and
practices that preserve the full
effectiveness of the antidumping laws.
One commentator suggests the
Department should give renewed focus
to the use of provisions addressing
fictitious markets and sales that are
outside the ordinary course of trade,
should consider shortening the range of
months from which the
contemporaneous month may be
selected, and should revise its model
match criteria. These commentators
argue that despite their suggested
alternatives, there is no way to come
into compliance with the WTO findings
without seriously compromising the
effectiveness of the trade remedy laws.
One commentator argues that while it
may be appropriate to invoke section
123(g) of the URAA for purposes of
modifying the Department’s regulations,
the use of zeroing can be abandoned
without the Department invoking its
authority under section 123 because the
Department can choose not to apply the
zeroing method on a case-by-case basis.
This party argues that Congress has
purposefully imposed section 123
procedures only on amendments or
modifications of regulations and written
policy guidance. Because application of
the zeroing method is not pursuant to
written policy guidance, U.S.
obligations with respect to adopted
WTO reports, and changes pursuant
thereto, have no bearing on domestic
procedures. Because section 123
imposes certain procedural obligations
that are not required in order for the
Department to abandon zeroing, this
party urges the Department to clarify
that any changes undertaken are made
pursuant to the agency’s general legal
authority to administer the antidumping
laws, and that the Department did not
rely upon or invoke the procedures
called for under section 123.
Department Position: The Department
has carefully considered all of the
comments provided in this section 123
proceeding, particularly those
comments addressing the need to
maintain the effectiveness of the
antidumping remedy, and has
determined to adopt this Final
Modification for Reviews. The
Department is not taking this step
lightly, and it stands to reason that the
adoption of this Final Modification for
Reviews will have some impact on the
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weighted-average dumping margins
determined in reviews. Nevertheless,
the Department, after fully considering
the issue, and consulting with USTR
and the relevant congressional
committees, has determined to adopt
this Final Modification for Reviews in
order to address the findings of several
WTO dispute settlement reports and to
bring its practice into conformity with
the WTO obligations of the United
States as determined in those reports.
The Department considers, moreover,
that it has adopted a reasoned and
balanced approach to implementation
that is consistent with existing U.S. law
and administrable by the agency.
With respect to the Final Modification
for Reviews being a reasoned and
balanced approach, the Department is
adopting a methodology that parallels
the WTO-consistent methodology the
Department previously adopted in
response to WTO dispute settlement
reports relating to investigations. This
new methodology for reviews will be
the default methodology in all reviews
for which this Final Modification for
Reviews is effective; however, the
Department does retain the discretion,
on a case-by-case basis, to apply an
alternative methodology, when
appropriate. The Department retained
similar discretion in investigations and
has only needed to exercise it in a
limited number of investigations since
the adoption of the Final Modification
for Investigations.19
With respect to this Final
Modification for Reviews being
consistent with existing U.S. law, the
courts have held, in more than thirty
cases, that while zeroing is a reasonable
interpretation of the statute, it is a
reasonable interpretation of an
ambiguous provision of the statute. The
ambiguity recognized by the Court of
Appeals for the Federal Circuit means
that it is within the Department’s
discretion to alter or abandon its zeroing
methodology upon providing a reasoned
explanation.20 The Department is
hereby altering that methodology, by
adopting an A–A comparison
methodology in reviews that parallels
the WTO-consistent methodology
adopted in investigations, and providing
offsets when it aggregates the results of
19 See Final Modification for Investigations, 71 FR
77722 (Dec. 27, 2006).
20 Timken Company Ltd. v. United States, 354
F.3d 1334, 1342 (Fed. Cir. 2004) (‘‘ * * * while the
statutory definitions do not unambiguously
preclude the existence of negative dumping
margins, they do at a minimum allow for
Commerce’s constructions. Basically, one number
‘exceeds’ another if it is ‘greater than’ the other,
meaning it falls to the right of it on the number
line.’’); see also Corus Staal BV v. Dept. of
Commerce, 395 F.3d 1343, 1347 (Fed. Cir. 2005).
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those comparisons. Consistent with this
interpretation of the statute and
application of this methodology, the
Department disagrees with those
comments that suggest it is not
capturing 100 percent of the dumping.
The Department will capture 100
percent of the dumping that is
determined to exist pursuant to this
methodology. Moreover, alternative
methodologies will remain available
when determined to be appropriate on
a case-by-case basis.
With respect to this Final
Modification for Reviews being
administrable by the Department, as
previously indicated, the Department is
adopting a methodology that parallels
the WTO-consistent methodology it
adopted earlier in original antidumping
duty investigations using A–A
comparisons. In so doing, the
Department has adopted a methodology
with which it is already familiar and
experienced in administering. This will
facilitate the administration of a change
impacting the 188 reviews the
Department conducts in an average year.
The Department is not adopting the
comments suggesting that it calculate
dumping margins on the basis of A–A,
T–T, and A–T comparison
methodologies, and rely on the
methodology providing the highest
weighted-average margin of dumping.
Such a proposal would entail
substantial additional work in every
case which is not administratively
feasible given the statutory time
constraints present in every proceeding
and the Department’s limited resources.
Moreover, while such alternative
methodologies remain available to the
Department on a case-by-case basis, the
Department expects to use the A–A
comparison methodology, with offsets,
in most reviews.
With regard to comments suggesting
that the Department alter other aspects
of its methodology having nothing to do
with the issue of zeroing, the
Department notes that the purpose of
this proposal is to bring the United
States into conformity with its WTO
obligations as articulated in the dispute
settlement reports cited above. These
suggestions are beyond the scope of this
section 123 proceeding. When these
issues arise in a particular review,
parties are free to suggest that the
Department reconsider them in the
context of that particular proceeding, as
appropriate.
With regard to comments suggesting
that the Department need not utilize a
section 123 proceeding in order to adopt
changes to its methodologies to address
the findings in the above-cited WTO
dispute settlement reports, these
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comments are inapposite. As is clear
from the on-going proceeding in which
the comments were submitted, the
Department has determined to utilize
the procedures of section 123 to adopt
these changes. Whether the Department
could have made these changes outside
of section 123 is irrelevant. The
Department has determined that, in this
case, it was appropriate to undertake a
section 123 proceeding, with all of its
attendant comment and consultation
processes, in order to complete the
adoption of these significant changes in
its practice.
Explicit Total Prohibition of Zeroing
A number of commentators argue that
the Department should state explicitly
that it will grant offsets when the export
price exceeds the normal value, and
specifically eliminate the zeroing
methodology. Some of these
commentators suggest that the
Department should clearly state that it
will grant offsets equal to the full
difference between normal value and
export price when calculating dumping
margins using the A–A comparison
methodology in reviews. These
commentators note that the proposed
regulations do not explicitly state that
the Department will provide offsets
when calculating the dumping margin.
Some commentators suggest that the
Department include explicit text in the
Final Modification for Reviews, the
regulations, or both, that unequivocally
eliminates zeroing regardless of the
comparison methodology employed,
and regardless of any case-specific
circumstances. Some assert that any
elimination of a subset of comparisons
(i.e., denial of offsets) is a violation of
the United States’ WTO obligations. In
their view, an explicit prohibition of
zeroing in all instances is necessary to
ensure full compliance with WTO
rulings and encourage other countries to
comply with their commitments.
Department Position: With this Final
Modification for Reviews, the
Department is taking all steps necessary
to address the findings of the WTO
dispute settlement reports at issue and
to come into compliance with its WTO
obligations. As a result of this
modification, the new, normal
comparison methodology to be used in
reviews will be the A–A comparison
methodology (on a monthly basis) and
offsets will be provided when the
results of those comparisons are
aggregated for purposes of determining
the weighted-average dumping margin.
This new methodology will parallel the
WTO-consistent methodology the
Department currently uses in original
investigations.
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It is not necessary, appropriate or
desirable for the Department, in this
Final Modification for Reviews, to go
beyond the findings made in the WTO
dispute settlement reports at issue by
adopting a total prohibition of zeroing
regardless of comparison method or
case-specific circumstance. The dispute
settlement reports at issue address only
certain types of comparisons in
particular circumstances, such that a
total prohibition of zeroing is not
necessary to come into compliance.
With respect to the findings regarding
the calculation of weighted-average
dumping margins and antidumping
duty assessment rates in reviews, the
Final Modification for Reviews achieves
compliance with the dispute settlement
findings in that it adopts a methodology
for these reviews that parallels the
WTO-consistent methodology that is
currently being applied in original
investigations. The methodologies and
interpretations set forth and adopted in
the Final Modification for Reviews fully
address the findings of WTO
inconsistency.
Clarification on the Application of an
Alternative Comparison Methodology
Several parties request clarification as
to which circumstances would trigger
the use of an alternative comparison
methodology, and whether zeroing
would be used in the alternative
calculation methodology. These
commentators also encourage the
Department to narrowly tailor the
circumstances under which an
alternative comparison methodology is
used. One commentator notes its
concern that the reference to an
alternative methodology in the Proposed
Modification for Reviews is ambiguous,
and will lead to parties manipulating
the system for a certain preferred
comparison methodology.
Some commentators remind the
Department that if it is considering the
use of the targeted dumping
methodology as an alternative
methodology, this methodology is to be
employed as an exception, in very
limited circumstances. One
commentator suggests the Department
should develop an overall final rule
with regard to targeted dumping that is
explicitly consistent with Article 2.4.2
of the Antidumping Agreement.
Some commentators state that the
targeted dumping methodology was not
intended to apply to reviews, and
request that the Department explicitly
state that it will not employ targeted
dumping in this context.
Department Position: In its Final
Modification for Reviews, the
Department provides additional
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clarification of the circumstances that
could trigger the use of an alternative
comparison methodology. The Proposed
Modification for Reviews indicated that
the Department would use monthly A–
A comparisons, except where it
determines that application of an
alternative comparison method is more
appropriate. The Department also
indicated its intent to apply the
methodology in a manner that parallels
the WTO-consistent methodology the
Department currently applies in
investigations.21
In this Final Modification for Reviews,
the Department clarifies that because
the methodology being applied will
parallel the WTO-consistent
methodology that the Department
currently applies in original
investigations, it will necessarily
include any exceptional or alternative
comparison methods determined
appropriate to address case-specific
circumstances. The Department’s
regulations specifically describe three
types of comparison methodologies that
might be used to determine margins of
dumping and antidumping duty
assessment rates. Although the Final
Modification for Reviews adopts the A–
A method as the default method in
reviews, the Department may determine
to use any of the alternative comparison
methodologies when deemed
appropriate in a particular case.
The Department determines that it
would be inappropriate to further
speculate as to either the case-specific
circumstances that would warrant the
use of an alternative methodology in
future reviews, or what type of
alternative methodology might be
employed. These determinations would
be highly dependent on the facts of the
individual proceeding. However, as is
the case with all administrative
proceedings, interested parties will have
the opportunity to comment on whether
an alternative comparison method is
warranted during the normal course of
the review.
Assessment Rate Calculations
Some commentators request
clarification as to how the Department
intends to calculate antidumping duty
assessment rates. A few request that the
Department specifically clarify that it
will continue to calculate importerspecific antidumping duty assessment
rates. Some commentators argue the
Proposed Modification for Reviews
raises the possibility that antidumping
duty assessment rates could be
impacted by the level of dumping on
21 Proposed Modification for Reviews, 75 FR at
81534.
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other importers’ entries, which
contravenes the current statutory and
regulatory requirements that the
Department determine the level of
dumping required for each entry during
the review period and that it determine
the assessment rate on an importerspecific basis. Some commentators
suggest that the Department state that it
will calculate antidumping duty
assessment rates for individual
importers without the zeroing method.
A few commentators suggest that
before issuing a final section 123
determination, the Department should
consider issuing a separate notice
identifying any proposed changes in its
calculation of importer-specific
assessment rates necessitated by the
proposed change in the Department’s
methodology to permit additional
public comments. It is further suggested
that the Department release for public
comment the standard calculation
program that it intends to use in
reviews.
Department position: For purposes of
this Final Modification for Reviews, the
Department is providing additional
explanation about the antidumping duty
assessment methodology being adopted.
The Department has determined that a
further or separate comment period is
not justified. The calculation program
language, including any antidumping
duty assessment determinations,
particular to any specific review, will be
available to parties through the
Department’s usual disclosure process
and parties are free to comment on it
during the course of the individual
review.
With respect to the issue of
assessment rates, when a review is
conducted applying the A–A
comparison methodology, and the
weighted-average margin of dumping for
the exporter or producer is determined
to be zero or de minimis, no assessment
rates will be calculated and the
Department will instruct CBP to
liquidate all imports from the exporter
or producer without regard to
antidumping duties, regardless of
importer.
When the weighted-average margin of
dumping for the exporter or producer is
determined to be greater than de
minimis, based on the A–A comparison
methodology, the Department will
perform an additional calculation to
determine the assessment rate for each
individual importer that purchases from
the exporter or producer in question.
This additional calculation will
effectively repeat the first calculation
performed at the exporter or producer
level; however, in this case, the export
transactions involved in the calculation
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will be limited to those involving
merchandise imported by the individual
importer. The monthly, weightedaverage export prices of those
transactions will be compared to
monthly normal values, and the results
will be aggregated with offsets being
provided for non-dumped comparisons.
Those offsets will be provided on an
importer-specific basis in the
aggregation, regardless of the month,
model, level of trade, etc. for the other
comparison(s) found to have been
dumped.
Comments on the Proposed Regulations
Several commentators note that the
proposed rule at § 351.414(c)(1) does not
provide sufficient clarification of what
constitutes ‘‘a particular case.’’ The
commentators argue that without further
clarification of the term, the
investigating authority would have
excessive discretion in interpreting and
implementing the regulation. Therefore,
the commentators request the
Department to specify, in the final
regulations, the exceptional
circumstances that would allow the use
of an alternative comparison
methodology. These commentators
suggest that the language of
§ 351.414(c)(1) regarding choice of
method should be clarified to indicate
when and how the Secretary might
choose an alternative comparison
methodology by making clear the
circumstances in which it may find it
‘‘more appropriate’’ to deviate from its
proposed methodology and use a
‘‘different comparison method’’ to
calculate dumping margins and
antidumping duty assessment rates in a
review. One commentator goes further
and suggests that the Department
specify not only the specific
circumstances that make it appropriate
to deviate from the preferred
methodology, but also which alternative
comparison methodology would be used
in particular circumstances.
Several commentators note that the
proposed rules do not specify that
zeroing will not be used. Therefore,
these commentators request that the
final rule specifically include a
provision for granting offsets for nondumped sales in all comparison
methodologies. One commentator
suggests clarification of the language of
§ 351.414(d)(3), with respect to the
comparison of weighted-average
monthly export price or constructed
export price to the weighted-average
normal value for the contemporaneous
month. Specifically, the commentator
suggests that it be made clear that while
aggregating the comparisons of different
months covered in a review, the
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Secretary will provide offsets for those
comparisons which result in negative
dumping margins.
Department Position: The Department
disagrees that additional clarification of
the regulations is necessary or
appropriate. The revised regulations
describe three types of comparison
methodologies that might be used to
determine margins of dumping and
antidumping duty assessment rates. The
overarching purpose of 19 CFR 351.414
is to implement section 777A(d) of the
Act and to set forth the three statutory
methodologies for establishing and
measuring dumping margins.22 Section
351.414(c), as revised by this Final Rule
and Final Modification for Reviews, sets
forth the default comparison
methodology to be used in different
contexts, and § 351.414(d) describes
generally how the A–A method will be
applied. The revised regulation makes
clear that the A–A comparison
methodology will be the default
methodology in all reviews for which
the Final Rule and Final Modification
for Reviews applies. The Department
has also explained that because the
methodology being adopted will parallel
the WTO-consistent methodology the
Department currently applies in original
investigations, it will necessarily
include any exceptional or alternative
comparison methodologies determined
appropriate to address case-specific
circumstances. The Final Rule allows
sufficient flexibility for the Department
to apply alternative comparison
methodologies when necessary.
The Department has always retained
discretion under its regulations to apply
any of the three comparison
methodologies in any context, and has
exercised this discretion only in a
limited number of circumstances. It
would be inappropriate to further
speculate as to which case-specific
circumstances might warrant the use of
an alternative comparison methodology
in future reviews as this determination
would be highly dependent on the facts
of the individual proceeding. Because
any description of such circumstances
would be speculative, at best, the
revised regulations do not specify the
exceptional circumstances that might
trigger the use of an alternative
comparison methodology. Such
questions are best addressed in the
context of individual proceedings. As is
the case with all proceedings, interested
parties would have the opportunity to
comment on whether an alternative
comparison methodology is warranted
22 See Antidumping Duties Countervailing Duties,
62 FR 27296, 27374 (May 19, 1997) (Preamble,
Final Rule).
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during the normal course of the
proceeding.
The Department further disagrees that
the revised regulations must specifically
indicate that offsets will be provided.
The purpose of the regulation is to
describe in general terms the
comparison methodologies available,
and the default methodology to be
employed in different contexts. Greater
specificity as to when offsets will be
provided under each comparison
methodology is beyond the intended
purpose of the regulation, and is
unnecessary for purposes of adopting a
methodology that is WTO-consistent.
The Department has already made clear
that its revised methodology for reviews
will parallel the WTO-consistent
methodology the Department currently
applies in original investigations, and
that offsets will be provided when using
this methodology. The Department has
been granting offsets in original
investigations since 2007 without
specific regulatory language directing it
to do so. The Department has further
explained, above, how assessment rates
will be determined for individual
importers. The revised regulations
coupled with the descriptions contained
in this Final Modification for Reviews
and the Department’s responses to
comments are sufficient. The
Department does not consider that the
revised regulations require further
elaboration. Furthermore, as more fully
explained in the Explicit Total
Prohibition of Zeroing section of this
notice, above, the Department disagrees
that it is either necessary or appropriate
to adopt a total prohibition—either
explicit or implicit—of zeroing,
regardless of the comparison
methodology or case-specific
circumstance. The methodologies and
preferences set forth in this Final
Modification for Reviews and the
revised regulations, fully address the
findings of WTO inconsistency.
Sunset Determinations
Many commentators welcome the
United States’ recognition that it should
not rely on dumping margins based on
the zeroing methodology when
conducting sunset reviews. These
commentators agree that international
obligations prohibit the use of dumping
margins calculated with zeroing for
purposes of sunset determinations. One
commentator argues that the Supreme
Court’s decision in Murray v. Charming
Betsy, 6 U.S. (2 Cranch.) 64, 118 (1804)
(Charming Betsy), compels the
Department to terminate its use of
zeroing in sunset reviews immediately
in order to avoid violating the United
States’ international obligations. See
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Fed.-Mogul Corp. v. United States, 63
F.3d 1572, 1581 (Fed. Cir. 1995) (citing
Charming Betsy, 6 U.S. (2 Cranch.) at
118). Several commentators argue that
failure to recalculate dumping margins
would result in costly and unnecessary
litigation in light of the ruling in US—
Zeroing (Japan), in which the Appellate
Body found that reliance on dumping
margins based on the zeroing
methodology in sunset reviews is
inconsistent with U.S. WTO obligations.
Some commentators argue that the
Proposed Modification for Reviews does
not sufficiently account for the many
sunset reviews currently pending where
past dumping margins were based on
zeroing. Many suggest that the
Department should recalculate all
dumping margins relied upon in sunset
reviews using the new WTO-consistent
methodology. These commentators
point out that dumping margin
calculations and, hence, zeroing are
relevant to determining both whether
revocation of an order would be likely
to lead to a continuation or recurrence
of dumping and the magnitude of the
dumping margin likely to prevail if the
antidumping order were revoked.
Another commentator goes on to
observe that the Department must
evaluate the change in dumping margins
over time to ascertain changes in the
exporters’ pricing behavior as part of its
sunset determinations. To conduct a
trends analysis of this sort, it is
necessary that the dumping margins be
calculated in a consistent manner over
time, which can only be done by
eliminating the zeroing methodology
from all calculations.
Certain commentators argue that the
Department correctly recognized in the
Proposed Modification for Reviews that
it is not precluded from recalculating
dumping margins from prior
proceedings to eliminate zeroing for
sunset reviews. One commentator
points out that sections 752(c)(1) & (3)
of the Act direct the Department to
consider the prior rates it has
calculated, not simply to adopt them
wholesale, and that the Department may
consider such other price, cost, market,
or economic factors it deems relevant
(See § 752(c)(2) of the Act). Another
commentator argues that, regardless of
whether certain dumping margins form
the basis for the sunset determination,
the statute (section 751(c) of the Act)
requires the Department to consider all
dumping margins determined during
the five-year period, and therefore,
recalculation cannot be avoided. A few
other commentators request that the
Department add clarifying language to
19 CFR 351.414 to clearly state that it
will not rely on dumping margins that
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contain zeroing in future sunset
reviews, that it will recalculate dumping
margins that contain zeroing in future
sunset reviews, or both.
Several commentators urge that the
Department should stop relying on
dumping margins that contain zeroing
in sunset reviews immediately. One
commentator argues that, for sunset
reviews, there is no reason to delay
implementation until 60 business days
after the date of publication of the Final
Modification for Reviews because the
proposed change is only to the
Department’s practice, and no change is
proposed to its regulation.
Other commentators make more
specific proposals for implementing the
new practice in sunset reviews. One
such proposal is for the Department to
recalculate dumping margins without
zeroing upon a showing by a respondent
company that its individual dumping
margin or the ‘‘all others’’ dumping
margin would be zero or de minimis.
Another commentator proposes that the
Department conduct a changed
circumstances review to determine
whether dumping would be likely to
continue or recur if the order were
revoked upon a showing that the
dumping margins without zeroing in
three reviews completed after January
23, 2007, are zero or de minimis. One
other commentator requests that the
Department both recalculate dumping
margins in a sunset review to eliminate
zeroing, effective immediately, and then
transmit to the ITC the non-zeroed
dumping margins that are likely to exist
if an order were revoked effective for
sunset reviews initiated after the
publication of the proposed rules. One
commentator concerned about sunset
reviews contends that the Department
only suggests it will use section 129 to
implement the DSB’s recommendations
and rulings in US—Continued Zeroing
(EC), WT/DS350/R, para. 8.1(f), WT/
DS350/AB/R (DS 350), but does not
commit to do so. This commentator asks
the Department to state clearly that it
will implement DS 350 under section
129 when making its determination.
This commentator also contends that
there is no impediment to reopening
prior sunset determinations under
section 129.
Department Position: In response to
comments from several parties, in the
Final Modification for Reviews, the
Department clarified that when making
sunset determinations, it will modify its
practice such that it will not rely on
dumping margins determined in a
manner found to be WTO-inconsistent
in US—Zeroing (EC), US—Zeroing
(Japan), US—Stainless Steel (Mexico),
and in US—Continued Zeroing (EC).
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While it is possible that in some
instances, dumping margins will need
to be recalculated to avoid reliance on
such dumping margins, the Department
finds that those situations can be
addressed on a case-specific basis.
When determining whether
revocation of an antidumping order
would be likely to lead to continuation
or recurrence of dumping, section
752(c)(1) of the Act directs the
Department to consider dumping
margins determined during the original
investigation and in subsequent
reviews, and import volumes of the
subject merchandise. The Department’s
regulations further provide that only in
the most extraordinary circumstances
will the Department rely on dumping
margins other than those calculated and
published during prior determinations.
19 CFR 351.218(e)(2)(i). The Department
expects that in the vast majority of
cases, it will have a sufficient number
of dumping margins, determined in a
manner not found to be WTOinconsistent in these disputes, and
sufficient information pertaining to
import volumes, upon which to base its
sunset determinations. Future dumping
margins in reviews will be calculated in
accordance with this Final Modification
for Reviews. Furthermore, the
Department may also rely on past
dumping margins determined in a
manner not found to be WTOinconsistent in these disputes, such as
dumping margins recalculated pursuant
to section 129 proceedings, dumping
margins determined on the basis of
adverse facts available and dumping
margins where no offsets were denied
because all comparison results were
positive. Additionally, if dumping
margins declined over the five-year
period, or if there are no dumping
margins, decreased volumes provide
another basis that indicates whether
dumping is likely to continue or recur
if the discipline of the order is removed.
Although the Department will
evaluate each sunset determination on a
case-by-case basis to determine whether
recalculations are needed, the
Department does not anticipate that,
apart from the ‘‘most extraordinary
circumstances’’ already provided for in
its regulations, it will need to rely on
dumping margins other than those
published in prior determinations in
order to avoid reliance on margins
determined in a manner found to be
WTO-inconsistent in these disputes. For
these reasons, the Department disagrees
that it is necessary to adopt a practice
or methodology which assumes that
previously determined dumping
margins will always need to be
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8109
recalculated in the context of sunset
reviews.
The Department disagrees that it is
required to recalculate dumping
margins determined in a manner found
to be WTO-inconsistent in these
disputes that were calculated during the
five-year period so that it may examine
dumping margin trends over time.
When determining whether dumping is
likely to continue in the absence of an
antidumping duty order during a fiveyear sunset review, the Department
looks to whether dumping continued at
any level after the issuance of the
order.23 While section 752(c)(1) of the
Act directs the Department to
‘‘consider’’ previously determined
dumping margins as the basis for its
likelihood determination, there is no
requirement that all dumping margins
determined during that period form the
basis for deciding whether the order
should be continued. Accordingly, the
Department does not agree that all
dumping margins calculated during the
five-year sunset period must be
recalculated as a matter of course in
order for the U.S. to be compliant with
the statute.
The Department further disagrees
with the suggestion that it should
modify section 351.414(d) of its
regulations to indicate that the
Department will recalculate dumping
margins in sunset determinations using
the A–A comparison methodology. The
Department has already indicated that it
does not anticipate that it will need to
recalculate dumping margins other than
in the most extraordinary
circumstances, and such circumstances
are already provided for in its
regulations. See 19 CFR 351.218(e)(2)(i).
Accordingly, those instances where the
Department may need to rely on
dumping margins other than those
previously determined can be addressed
pursuant to 19 CFR 351.218(e)(2)(i) on
a case-specific basis.
The Department has further clarified
that this Final Modification for Reviews
will apply to all sunset reviews pending
before the Department for which either
preliminary results of sunset review, or
expedited final results of sunset review
are issued more than 60 days after the
date of publication of the Department’s
Final Modification for Reviews. The 60day period will allow sufficient time
23 See Certain Circular Welded Carbon Steel
Pipes and Tubes From India, Thailand, and Turkey;
Final Results of Expedited Five-Year (‘‘Sunset’’)
Reviews of Antidumping Duty Orders, 76 FR 66893
(Oct. 28, 2011), and accompanying Issues and
Decision Memorandum, at Cmt. 1; see also
Statement of Administrative Action, at 889 and 890,
H. Doc. No. 103–316, vol. 1 (1994); the House
Report, H. Rep. No. 103–826, pt. 1, at 63–64 (1994).
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prior to issuance of a preliminary sunset
determination, or a final expedited
sunset determination, for parties to
provide comments within the context of
each individual proceeding. For reasons
fully set forth in response to comments
on the Effective Date of Implementation
section of this notice, the Department
finds this to be an adequate amount of
time to permit parties and the
Department to respond to novel and
complex issues that arise as a result of
implementing the modified regulations.
The Department does not find that a
separate notice and comment period is
necessary.
The Department finds the
commentator’s request that it commit to
implementing ‘‘as applied’’ findings of
inconsistency through a section 129
proceeding in certain sunset reviews to
be beyond the scope of this section 123
determination. See Implementation
through Section 129 Proceedings and
Application to Completed Reviews
section of this notice. The purpose of
this Final Modification for Reviews is
not to address or fix how the Final
Modification for Reviews is to be
applied in the specific proceedings that
were challenged, but rather is to address
the broad elements of the prior practice
that were found WTO-inconsistent. The
Department has addressed the
inconsistencies found with respect to
sunset reviews by including a
modification of the methodology that
will be applied in future sunset reviews.
Whether any particular section 129
proceeding will be requested by the
Office of the USTR for certain sunset
reviews is beyond the scope of this
Final Modification for Reviews.
Transaction-to-Transaction
Comparisons in Investigations
A few commentators requested
clarification concerning the
Department’s use of the T–T comparison
methodology in original antidumping
duty investigations. One commentator
interpreted the Department’s statement
to signify that the Department would
provide offsets for non-dumped
transactions when applying the T–T
methodology. Others requested
confirmation that it will provide offsets
for non-dumped sales when using this
comparison methodology.
Department Position: In its Proposed
Modification for Reviews, the
Department stated that ‘‘to the extent
that any prior original antidumping
duty investigations using T–T
comparisons could be considered as
establishing a practice of the
Department with respect to the granting
or denial of offsets for non-dumped
comparisons when calculating the
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weighted average margin of dumping
* * *, the Department proposes to
withdraw any such practice.’’ 76 FR
81534. In its Final Modification for
Reviews, the Department has now
clarified that to the extent that any prior
original antidumping duty
investigations using T–T comparisons
could be considered an established
practice of the Department with respect
to the denial of offsets for non-dumped
comparisons when calculating the
weighted average margin of dumping,
the Department withdraws any such
practice. Specifically, when the
Department applies the T–T comparison
methodology in a future proceeding—
regardless of whether offsets are
provided—it will do so without
reference to or reliance on any prior
practice because, such practice has been
withdrawn.
Effective Date of Implementation
A number of commentators propose
that the Department implement the new
methodology in reviews initiated 60
days or later after the date of the
publication of the Final Modification for
Reviews. Some of these parties explain
that applying the new method to
reviews that are pending as of the
effective date would confuse interested
parties in several different ways. These
parties argue that, due to the
complicated nature of this new policy,
the Department is likely to face many
complex and novel issues concerning its
case-specific application.
Some commentators claim that
implementing the new methodology in
reviews that have already been initiated
would be unfair to all parties who base
decisions on whether to request and/or
participate in reviews on the application
of certain standard methodologies.
Some commentators argue that because
the date of the preliminary results of
review for a proceeding can be subject
to circumstances in the individual
proceeding, the methodology applied
could differ among proceedings that
were initiated on the same day, which
they claim would result in arbitrary
treatment. One party argues that the
arbitrariness of the effective date would
provide an incentive for respondents to
create complexity to slow the process or
for domestic parties to neglect
inadequacies to expedite the process.
They contend that the statute intends
for neither scenario and many of these
concerns can be mitigated by applying
the final rules to newly initiated
reviews.
Other commentators argue that the
Department’s proposed effective date is
too long and takes unnecessary time to
implement the new policy. Some
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commentators cite to the Final
Modification for Investigations (71 FR
77722), as precedent, and note that in
that instance, the Department applied
the new methodology to all
investigations that were pending before
the Department. Other commentators
suggest that the Department apply the
new method to all reviews where the
final results are scheduled to be issued
more than 60 days after the date of
publication.
Some commentators argue that,
because it only takes a simple
programming modification to
implement the final rule, the 60-day
implementation period is too long even
for a review for which the preliminary
results have been issued. Several of
these commentators argue that faster
implementation will pose less litigation
risk to the United States and result in a
reduced litigation burden for all parties.
Some parties argue that because the
provision of offsets is an entirely
administrative practice, the
modification can be applied
immediately, and there is no need for
further delay.
Several commentators suggest that the
effective date should be the date of the
publication of the notice of the final
rule. Some commentators suggest that
the Department implement the final rule
and modification for all reviews where
the final results are expected to be
issued 30 business days or later after the
publication date. Some other
commentators contend that, in
accordance with section 123(g)(2) of the
URAA, the 60-day period should begin
when the Department begins its
consultation with Congress unless the
President determines an earlier effective
date. One commentator argues that the
effective date should be either the date
of the publication of the final rules or
60 days after the Department begins its
consultation, whichever is later. Some
other commentators request that the
Department implement this new policy
immediately but do not suggest any
specific date as the effective date.
Some commentators in favor of an
earlier effective date argue that an
earlier date would not impose a greater
administrative burden because applying
the necessary changes would not require
new factual information. These parties
further argue that the Department’s
Proposed Modification for Reviews
methodology has afforded adequate
notice to the public that the
methodology might change.
One commentator requests that the
Department conduct all sunset reviews
using dumping margins calculated
without zeroing no later than the by the
effective date adopted for reviews.
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Department Position: After careful
consideration of the arguments
presented by the commentators and of
the information needed to implement
this change, and weighing the
administrative burdens, the Department
determines that it will apply the Final
Modification for Reviews in reviews
pending before the Department for
which the preliminary results are issued
more than 60 days after the date of
publication of the Department’s Final
Rule and Final Modification for
Reviews. Additionally, the Final
Modification for Reviews will apply in
all sunset reviews pending before the
Department for which either the
preliminary results of sunset review, or
expedited final results of sunset review,
are issued more than 60 days after the
date of publication of the Department’s
Final Rule and Final Modification for
Reviews. In the Proposed Modification
for Reviews, the Department indicated
that the new methodology would be
effective in reviews pending before the
Department for which the preliminary
results are issued more than 60 business
days after the date of publication of the
Department’s final rule and
modification. As further explained
below, the Department finds 60 days to
be an adequate amount of time for
implementation. Therefore, in this Final
Modification for Reviews, the
Department has eliminated the
requirement that preliminary results be
issued more than 60 business days after
the Final Modification for Reviews in
order for the new method to apply.
This timetable for applying the new
methodology is legally permissible and
appropriate. The Department is
adopting this Final Modification for
Reviews in response to several WTO
dispute settlement findings, pursuant to
section 123(g)(1) of the URAA. Section
123(g)(2) of the URAA provides that a
final rule or modification may not go
into effect before the end of the 60-day
period after the consultations described
in section 123(g)(1)(E) begin, unless the
President determines that an earlier
effective date is in the national interest.
While the statute establishes the manner
of determining the effective date of any
final rule or modification adopted
pursuant to section 123, the statute does
not specify whether the final rule or
modification must apply only to new
segments of proceedings initiated after
the effective date, or may apply to any
segments pending as of the effective
date.
Similarly, the SAA provides no more
specific guidance regarding the
application of any final rule or
modification adopted pursuant to
section 123. The SAA states that section
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129 determinations will apply only with
respect to entries occurring on or after
the effective date.24 However, the SAA
makes no such statement with respect to
section 123 modifications. The SAA
merely states, ‘‘A final rule may not go
into effect before the end of the 60-day
consultation period unless the President
determines that an earlier date is in the
national interest.’’ 25
The applicable date for previous
section 123 determinations has been
determined by the Department on a
case-by-case basis. In four prior section
123 proceedings, the Department has
applied the final modification or final
rule to segments initiated after the
effective date.26 On other occasions, the
Department has adopted and applied a
change in policy involving a statutory
interpretation to all segments pending
as of the date of the change.27
The Department disagrees with
commentators that it is in a position to
adopt a more expedient implementation
date because this Final Modification for
Reviews does not entail a statutory
change. When considering changes or
modifications to a longstanding
methodology in an individual
determination, the Department is
required, at a minimum, to provide
parties with adequate notice and
opportunity to comment within the
context of each proceeding, prior to
making its final determination. Section
782(g) of the Tariff Act of 1930; see also
Koyo Seiko Co., Ltd v. United States,
516 F. Supp. 2d 1323, 1333–34 (CIT
2007), aff’d 551 F.3d 1286 (Fed. Cir.
2008).
This Final Modification for Reviews
entails a modification to the averaging
24 See Statement of Administrative Action, p.
1026, H. Doc. No. 103–316, vol. 1 (1994).
25 See Statement of Administrative Action, p.
1021, H. Doc. No. 103–316, vol. 1 (1994).
26 See e.g. Procedures for Conducting Five-Year
(‘‘Sunset’’) Reviews of Antidumping and
Countervailing Duty Orders, 70 FR 62062 (Oct. 28,
2005) (applying amended regulations to sunset
reviews initiated after the effective date); Notice of
Final Modification for Reviews of Agency Practice
Under Section 123 of the Uruguay Round
Agreements Act, 68 FR 37125, 37138 (June 23,
2003) (applying new privatization methodology to
investigations and reviews initiated on or after the
effective date); Antidumping Proceedings: Affiliated
Party Sales in the Ordinary Course of Trade, 67 FR
69186, 69197 (Nov. 15, 2002) (‘‘Arms Length Test’’)
(applying new methodology to investigations and
reviews initiated on or after the effective date);
Amended Regulation Concerning the Revocation of
Antidumping and Countervailing Duty Orders, 64
FR 51236 (Sept. 22, 1999).
27 See Basis for Normal Value When Foreign
Market Sales Are Below Cost, Policy Bulletin 98.1
(Feb. 23, 1998); Treatment of Inventory Carrying
Cost in Constructed Value, Policy Bulletin 94.1
(Mar. 24, 1994); Final Modification for
Investigations, 71 FR 77722 (Dec. 27, 2006)
(eliminating zeroing in investigations pending
before the Department as of the effective date of the
Final Rule.)
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8111
methodology applied in reviews that
was longstanding. Therefore, in
transitioning to the new methodology,
the Department will need to ensure that
sufficient time is provided within the
context of individual proceedings to
allow parties to submit any new data
that may be necessary, if desired. The
Department will then need time to
examine and analyze any additional
data, and will need to permit parties to
provide comments on any new data that
is submitted. Additionally, applying the
new methodology prior to issuance of
the preliminary results is appropriate
because the Department will need to
allow sufficient time for parties to
comment on the application of the new
methodology as it applies in the context
of individual proceedings.
The Department is not persuaded that
it should adopt a shorter timetable
simply because it was able to do so
when it modified its methodology to
provide offsets in investigations. In that
instance, the Department found it
appropriate to apply the modification to
all pending proceedings at the time of
the effective date, but only after
ensuring the feasibility of such an
expedited implementation, and
concluding that such a timeframe would
not unfairly prejudice any of the parties
to those proceedings.28 With respect to
this Final Modification for Reviews, the
Department determines that the
modified methodology must apply only
in proceedings where the preliminary
results have not yet been issued in order
to ensure that all parties have ample
time to submit any new data and
provide comment, and that the
Department has adequate time to
consider any new data and comments.
For all of these reasons, the Department
is not persuaded by arguments that it
could apply the new method more
expeditiously without compromising
principles of accuracy, fairness, and due
process.
Conversely, the Department also
disagrees with commentators who argue
that a longer timetable is necessary. The
Department agrees that the new policy
represents a substantive shift in
methodology, and the Department
expects to encounter novel issues as it
begins to apply this methodology. The
timetable already allows parties the
opportunity to submit any new data,
and to provide comment prior to the
preliminary results. Parties will then
have an additional opportunity to
comment on the methodology prior to
the final results, after it is applied. The
Department finds this to be an adequate
28 See Final Modification for Investigations, 71 FR
at 77725.
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amount of time that will permit parties
and the Department to respond to any
novel or complex issues that arise in
any particular case as a result of the new
method.
The Department does not agree that to
maintain fairness and non-arbitrary
application of methodology, it must
only apply the new methodology to
reviews initiated after the effective date.
Uncertainty of methodology is an
insufficient justification for prolonging
the application of a new methodology.
The United States uses a ‘‘retrospective’’
assessment system under which final
liability for antidumping duties is
determined after the merchandise is
imported. 19 CFR 351.212(a). While the
Department must abide by notice
provisions of the statute, changes in
methodology like all other antidumping
review determinations, permissibly
involve retroactive effect. SKF USA Inc.
v. United States, 537 F.3d 1373, 1381
(Fed. Cir. 2008). Requiring changes to be
applied only to future entries would
hinder the Department’s ability to give
timely effect to any changes in its own
practices. Koyo Seiko Co., 516 F. Supp.
2d at 1334, aff’d 551 F.3d at 1286.
Moreover, the public has now been on
notice of an impending change in
methodology because the Proposed
Modification for Reviews has been in the
public realm since December 28, 2010,
providing more than ample time for
parties to consider their options with
respect to upcoming review periods.
Implementation Through Section 129
Proceedings and Application to
Completed Reviews
Many commentators agree that
implementation of the adverse WTO
dispute settlement findings listed in the
Proposed Modification for Reviews
should occur pursuant to section 129 of
the URAA and many further agree that
pursuant to section 129, any changes
must be prospective only. Relying on
section 129(c)(1), these commentators
further argue that the changes should
apply only to entries that remain
unliquidated on or after the date USTR
directs the Department to implement.
Several commentators claim that the
Department has consistently applied
section 129 in this manner.
Numerous other commentators argue
that the calculation and assessment of
antidumping duties using zeroing
should have ceased when the reasonable
period of time (‘‘RPT’’) for compliance
ended for the various WTO rulings.
These commentators claim that
dumping margins should be
recalculated for the reviews involved in
each of the WTO proceedings as well as
any determinations or antidumping
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duty assessments arrived at using
zeroing after the end of the applicable
RPT. According to some other
commentators, this means that the
United States must immediately cease to
apply cash deposit or antidumping duty
assessment rates calculated using
zeroing and replace them with nonzeroed rates, must reliquidate any
entries that were liquidated after the
end of the RPT at assessment rates
calculated with zeroing, must
recalculate cash deposit rates relying on
zeroing and release excess cash deposits
made after the RPT, and must not use
zeroing in any ongoing reviews. One
commentator emphasizes that this must
occur regardless of the dates of entry.
Other commentators argue that any
excess duties collected should be
refunded with interest.
Some commentators urge the
Department not to interpret section
129(c)(1) as precluding the agency from
taking action that affects imports that
entered before the date on which USTR
directs the Department to implement.
Instead, consistent with past
representations to the WTO, the
Department should find that section
129(c)(1) is ambiguous with respect to
the treatment of such entries.
Some commentators argue that
Commerce might use one or more of
several alternatives to come into
compliance with respect to past entries,
including the use of a changed
circumstances review, voluntary
remands for any reviews subject to
litigation, use of the Department’s broad
authority under 19 U.S.C. 1617 to settle
antidumping claims, or legislation
requiring CBP to reliquidate entries that
were liquidated after the end of the RPT
at assessment rates using zeroing.
Other commentators urge the
Department to apply the final rule to
unliquidated entries in all pending
reviews, i.e., not just those subject to
section 129 proceedings. They contend
that treating imports from different
countries and under different orders
differently will prompt new and
unnecessary litigation in the WTO.
Other commentators argue that the final
rule should be effective retrospectively
to any entries in a completed review
that remain unliquidated as of 60 days
after the publication of the Final
Modification for Reviews. Some
commentators claim that the
Department should apply the new
methodology to entries that have not
been liquidated due to pending
litigation. One commentator contends
implementing in this manner would be
prospective to the future liquidation,
and would not constitute retroactive
implementation. Some other
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commentators argue that any dumping
margins with present effects should be
revised and applied prospectively from
the effective date.
Another commentator points out that
when the Proposed Modification for
Reviews speaks of applying the new
methodology pursuant to section 129, it
only references disputes brought by the
European Union, Japan and Mexico.
This commentator contends, however,
the Appellate Body’s finding in USZeroing (EC) makes clear that the United
States’ obligations to remedy zeroing
extend to reviews even though a
Member may only have challenged the
Department’s use of zeroing in the
antidumping investigation. Thus, the
Department must recalculate dumping
margins and antidumping duty
assessment rates for subsequent reviews
of those orders. Other commentators
urge the Department to apply the new
methodology to reviews subject to all
ongoing and future WTO proceedings in
which zeroing is an issue before a panel
or the Appellate Body.
Other commentators argue that the
statute prohibits the Department from
implementing this new policy on entries
covered by completed reviews because
they all entered the United States before
the effective date. The statute only
permits the Department to abandon
zeroing with respect to entries occurring
on or after the date that USTR directs
implementation, and which remain
unliquidated at the time the Department
implements its determination. Because
entries covered by completed reviews
entered prior to the effective date, the
Department is prohibited from
recalculating dumping margins for
entries covered by those reviews. This
commentator argues the Department
should clarify that it will not recalculate
dumping margins for completed
reviews.
Department Position: The Department
is adopting this Final Modification for
Reviews pursuant to section 123 of the
URAA to put in place for future reviews
and certain pending reviews a
methodology that responds to the WTO
findings of inconsistency. The
Department finds that comments
addressing how the new methodology
should apply to specific ‘‘as applied’’
findings of inconsistency are beyond the
scope of this section 123 determination
because section 129 determinations are
separate from section 123
determinations under the URAA. The
purpose of this Final Modification for
Reviews is to address the broad elements
of the prior practice that was found to
be WTO-inconsistent. It is not intended
to address how that practice was
applied in the specific proceedings that
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were challenged. The Final Modification
for Reviews makes clear that the new
WTO-consistent methodology will be
applicable to any determinations made
pursuant to section 129 of the URAA in
connection with the relevant WTO
disputes. Whether any particular section
129 proceeding will be requested by
USTR is beyond the scope of this Final
Modification for Reviews. Accordingly,
the Final Modification for Reviews does
not further specify the particular
proceedings to which the new
methodology will apply.
With regard to the various arguments
that suggest the new methodology
should apply prior to the announced
effective date, such as to entries subject
to reviews that were completed or
ongoing prior to the effective date, for
reasons fully set forth in the Effective
Date of Implementation section of this
notice, the Department disagrees. The
WTO-consistent methodology adopted
will be applied in all reviews that are
pending before the Department for
which the preliminary results are issued
60 days after the publication of the Final
Modification for Reviews.
Adopting a Final Modification for
Reviews During the Negotiation of the
Doha Round
Some commentators suggest that the
Department should delay this Final
Modification for Reviews until the
United States resolves this issue at the
WTO through the Doha Development
Agenda (Doha) negotiations. These
commentators question whether these
implementation efforts will weaken the
U.S. negotiating position in the Doha
Rules negotiations. They suggest the
Department should hold off until the
Doha negotiations are concluded, as this
may obviate the need to implement at
all. Nonetheless, if the Department
chooses to implement, these
commentators support U.S. efforts to
seek correction, through the Doha Rules
negotiations, of the Appellate Body
decisions, which they view as
‘‘extraordinarily flawed.’’
Department Position: The Department
disagrees with commentators that it
should wait until the Doha negotiations
are concluded before adopting the Final
Modification for Reviews. The
Department is conducting this exercise
pursuant to the procedures provided for
in section 123 of the URAA. This
modification is necessary to implement
the DSB’s rulings and recommendations
in the four, previously identified
disputes—all of which necessarily dealt
with the interpretation and application
of existing WTO rules. Notwithstanding
this Final Modification for Reviews, the
Department will continue to work
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14:25 Feb 13, 2012
Jkt 226001
closely and actively with USTR with a
view towards clarifying that the AD
Agreement should not be read to require
WTO Members to provide offsets for
non-dumped comparisons.
Application of the Final Modification
for Reviews to Subject Merchandise
From Non-Member Countries
Two commentators representing
interests or products from the Russian
Federation note that Russia is in the
process of joining the WTO, but is not
yet a Member. These commentators
argue that notwithstanding Russia’s
non-Member status, the Department’s
new methodology adopted in the Final
Modification for Reviews should apply
equally to subject merchandise from
Russia.
Department Position: As the
Department has stated in its Final
Modification for Reviews, the revised
methodology will apply in reviews
pending before the Department for
which a preliminary results are issued
more than 60 days after the date of
publication of the Department’s Final
Rule and Final Modification for
Reviews. This includes reviews of
antidumping orders without regard to
whether the subject merchandise is from
a WTO Member.
Comments Unrelated to the Final
Modification for Reviews
One commentator argues that the
2008 rescission of the targeted dumping
regulation violates the Administrative
Procedures Act (‘‘APA’’) because it was
repealed without notice and comment.
The commentator requests that the
targeted dumping regulation be restored
in the final rule. Another commentator
suggests that the Department should
take this opportunity to address and
clarify several aspects of the targeted
dumping methodology it claims are
deficient.
A few commentators request that the
Department clarify that the new
averaging groups will still be based on
CONNUMs. One commentator points
out that in stating that ‘‘an averaging
group will consist of subject
merchandise that is identical or
virtually identical in all physical
characteristics and that is sold to the US
at the same level of trade,’’ the
Department does not define the term
‘‘identical or virtually identical in all
physical characteristics.’’ Based on this,
the commenter argues, it is unclear
whether the proposal refers to
merchandise that comprises individual
CONNUMs. Other commentators note
that the Proposed Modification for
Reviews does not state how the
Department will distinguish price
PO 00000
Frm 00025
Fmt 4700
Sfmt 4700
8113
averaging groups (e.g., by importer,
manufacturer, level of trade, sale type,
or CONNUM). A few commentators also
seek clarification that the Department is
not proposing to change how it
identifies merchandise for the purposes
of model match methodology.
Department Position: These
comments are beyond the scope of this
action. The Department reiterates that
the purpose of this exercise is to bring
the United States into conformity with
its WTO obligations as articulated in the
dispute settlement reports cited above.
The Department has proposed no
changes to these other aspects of its
dumping calculations, and thus finds
these suggestions to be beyond the
scope of this section 123 proceeding.
Parties are free to suggest that the
Department consider these comments in
the context of a particular proceeding,
as appropriate.
Timetable
The Final Rule and Final Modification
for Reviews will be effective and
applicable to all reviews pending before
the Department for which the
preliminary results are issued after
April 16, 2012. The Department will
further apply the Final Rule and Final
Modification of Reviews to all sunset
reviews pending before the Department
for which either the preliminary results
or expedited final results of sunset
review are issued after April 16, 2012.
This methodology will be used in
implementing the findings of the WTO
panels in US-Zeroing (EC), US-Zeroing
(Japan), US-Stainless Steel (Mexico),
and US-Continued Zeroing (EC), with
respect to any antidumping duty
proceedings conducted pursuant to
section 129 of the URAA. This
methodology will also be applicable to
any reviews currently discontinued by
the Department if such reviews are
continued after April 16, 2012 by reason
of a final and conclusive judgment of a
U.S. Court.
Classification
Executive Order 12866
The Final Rule has been determined
to be not significant for purposes of
Executive Order 12866.
Regulatory Flexibility Act
The Chief Counsel for Regulation has
certified to the Chief Counsel for
Advocacy of the Small Business
Administration (’’SBA’’), under the
provisions of the Regulatory Flexibility
Act, 5 U.S.C. 605(b), that this action
would not have a significant economic
impact on a substantial number of small
entities. Parties for whom the
E:\FR\FM\14FER1.SGM
14FER1
8114
Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Rules and Regulations
Department determines a weightedaverage margin of dumping or
antidumping duty assessment rate
include foreign exporters and
manufacturers, some of whom are
affiliated with U.S. companies and U.S.
importers. Some of these entities
affected by the rule may be considered
small entities under the SBA standard.
The Department has determined that
this action will not have a substantial
economic impact on a significant
number of small entities because the
costs associated with antidumping duty
liability generally will not increase as a
result of the proposed rule. No
comments were received regarding the
economic impact of this rule. As a
result, a final regulatory flexibility
analysis is not required and one was not
prepared.
Paperwork Reduction Act
This action does not contain a
collection of information for purposes of
the Paperwork Reduction Act of 1980,
as amended (44 U.S.C. 3501 et seq.).
List of Subjects in 19 CFR Part 351
Administrative practice and
procedure, Antidumping, Business and
industry, Cheese, Confidential business
information, Countervailing duties,
Freedom of information, Investigations,
Reporting and recordkeeping
requirements.
Dated: February 7, 2012.
Paul Piquado,
Assistant Secretary for Import
Administration.
For the reasons stated, 19 CFR part
351 is amended as follows:
PART 351—ANTIDUMPING AND
COUNTERVAILING DUTIES
1. The authority citation for 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.
Subpart B—Antidumping and
Countervailing Duty Procedures
2. Section 351.414 is revised to read
as follows:
■
pmangrum on DSK3VPTVN1PROD with RULES
§ 351.414 Comparison of normal value
with export price (constructed export price).
(a) Introduction. This section explains
when and how the Secretary will
average prices in making comparisons of
export price or constructed export price
with normal value. (See section 777A(d)
of the Act.)
(b) Description of methods of
comparison—(1) Average-to-average
method. The ‘‘average-to-average’’
VerDate Mar<15>2010
14:25 Feb 13, 2012
Jkt 226001
method involves a comparison of the
weighted average of the normal values
with the weighted average of the export
prices (and constructed export prices)
for comparable merchandise.
(2) Transaction-to-transaction
method. The ‘‘transaction-totransaction’’ method involves a
comparison of the normal values of
individual transactions with the export
prices (or constructed export prices) of
individual transactions for comparable
merchandise.
(3) Average-to-transaction method.
The ‘‘average-to-transaction’’ method
involves a comparison of the weighted
average of the normal values to the
export prices (or constructed export
prices) of individual transactions for
comparable merchandise.
(c) Choice of method. (1) In an
investigation or review, the Secretary
will use the average-to-average method
unless the Secretary determines another
method is appropriate in a particular
case.
(2) The Secretary will use the
transaction-to-transaction method only
in unusual situations, such as when
there are very few sales of subject
merchandise and the merchandise sold
in each market is identical or very
similar or is custom-made.
(d) Application of the average-toaverage method—(1) In general. In
applying the average-to-average method,
the Secretary will identify those sales of
the subject merchandise to the United
States that are comparable, and will
include such sales in an ‘‘averaging
group.’’ The Secretary will calculate a
weighted average of the export prices
and the constructed export prices of the
sales included in the averaging group,
and will compare this weighted average
to the weighted average of the normal
values of such sales.
(2) Identification of the averaging
group. An averaging group will consist
of subject merchandise that is identical
or virtually identical in all physical
characteristics and that is sold to the
United States at the same level of trade.
In identifying sales to be included in an
averaging group, the Secretary also will
take into account, where appropriate,
the region of the United States in which
the merchandise is sold, and such other
factors as the Secretary considers
relevant.
(3) Time period over which weighted
average is calculated. When applying
the average-to-average method in an
investigation, the Secretary normally
will calculate weighted averages for the
entire period of investigation. However,
when normal values, export prices, or
constructed export prices differ
significantly over the course of the
PO 00000
Frm 00026
Fmt 4700
Sfmt 4700
period of investigation, the Secretary
may calculate weighted averages for
such shorter period as the Secretary
deems appropriate. When applying the
average-to-average method in a review,
the Secretary normally will calculate
weighted averages on a monthly basis
and compare the weighted-average
monthly export price or constructed
export price to the weighted-average
normal value for the contemporaneous
month.
(e) Application of the average-totransaction method—In applying the
average-to-transaction method in a
review, when normal value is based on
the weighted average of sales of the
foreign like product, the Secretary will
limit the averaging of such prices to
sales incurred during the
contemporaneous month.
(f) Contemporaneous Month.
Normally, the Secretary will select as
the contemporaneous month the first of
the following months which applies:
(1) The month during which the
particular U.S. sales under
consideration were made;
(2) If there are no sales of the foreign
like product during this month, the
most recent of the three months prior to
the month of the U.S. sales in which
there was a sale of the foreign like
product.
(3) If there are no sales of the foreign
like product during any of these
months, the earlier of the two months
following the month of the U.S. sales in
which there was a sale of the foreign
like product.
[FR Doc. 2012–3290 Filed 2–13–12; 8:45 am]
BILLING CODE 3510–DS–P
INTERNATIONAL TRADE
COMMISSION
19 CFR Chapter II
Plan for Retrospective Analysis of
Existing Rules
International Trade
Commission.
ACTION: Policy statement.
AGENCY:
The United States
International Trade Commission
(Commission) gives notice of the
adoption of a plan for the retrospective
analysis of its existing regulations.
FOR FURTHER INFORMATION CONTACT:
Peter L. Sultan, Office of the General
Counsel, United States International
Trade Commission, telephone 202–205–
3094. Hearing-impaired individuals are
advised that information on this matter
can be obtained by contacting the
Commission’s TDD terminal at 202–
SUMMARY:
E:\FR\FM\14FER1.SGM
14FER1
]]>Agencies
[Federal Register Volume 77, Number 30 (Tuesday, February 14, 2012)]
[Rules and Regulations]
[Pages 8101-8114]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-3290]
[[Page 8101]]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
19 CFR Part 351
[Docket No. 101130598-2109-03]
RIN 0625-AA87
Antidumping Proceedings: Calculation of the Weighted-Average
Dumping Margin and Assessment Rate in Certain Antidumping Duty
Proceedings; Final Modification
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Final rule; Final Modification.
-----------------------------------------------------------------------
SUMMARY: The Department of Commerce (``the Department'') is modifying
its methodology regarding the calculation of the weighted-average
dumping margins and antidumping duty assessment rate in certain
segments of antidumping duty proceedings (hereinafter, ``Final
Modification for Reviews''). Currently, in a review of an antidumping
duty order conducted under 19 CFR 351.213 (administrative review),
351.214 (new shipper review), and 351.215 (expedited antidumping
review) (collectively ``reviews''), the Department usually makes
comparisons between transaction-specific export prices and average
normal values and does not offset the amount of dumping that is found
with the results of comparisons for which the transaction-specific
export price, or constructed export price, exceeds normal value.
Several World Trade Organization (``WTO'') dispute settlement reports
have found that the United States' application of these methodologies
was inconsistent with its WTO obligations. Under this Final
Modification for Reviews, the Department will calculate weighted-
average margins of dumping and antidumping duty assessment rates in a
manner which provides offsets for non-dumped comparisons while using
monthly average-to-average (``A-A'') comparisons in reviews,
paralleling the WTO-consistent methodology that the Department applies
in original investigations. The Department is also modifying its
practice in five-year (``sunset'') reviews, such that it will not rely
on weighted-average dumping margins that were calculated using the
methodology found to be WTO-inconsistent. The schedule for implementing
these changes is set forth in the ``Timetable'' section in
SUPPLEMENTARY INFORMATION.
DATES: This Final Rule and Final Modification for Reviews are effective
April 16, 2012. The modification in the methodology will apply to
preliminary determinations issued after April 16, 2012.
FOR FURTHER INFORMATION CONTACT: Rachael Nimmo, U.S. Department of
Commerce, 14th Street and Constitution Avenue NW., Washington, DC
20230; telephone: 202-482-0836.
SUPPLEMENTARY INFORMATION:
Background
In antidumping duty proceedings, the Department determines margins
of dumping by comparing normal value with the export price \1\ of
comparable merchandise. Prior to this Final Rule and Final Modification
for Reviews, the Department typically has compared normal value and
export price using the average-to-transaction (``A-T'') method, which
involved a comparison of the weighted-average normal value \2\ to the
export price of individual transactions for comparable merchandise.
When aggregating the results of these comparisons to determine the
weighted-average margin of dumping in a review, the Department did not
offset the results of the comparisons for which export price was less
than normal value by the results of comparisons for which export price
exceeded normal value.\3\ When determining importer-specific assessment
rates in a review, the Department similarly aggregated the results of
importer-specific comparison results and did not offset the comparison
results for which export price was less than normal value by the
comparison results for which export price exceeded normal value.
---------------------------------------------------------------------------
\1\ The Department may also use constructed export prices, if
appropriate. Because the use of export prices or constructed export
prices is not relevant to the substance of this notice, the
Department refers only to export prices hereafter.
\2\ In addition to weighted-average comparison market prices,
the Department may base normal value on constructed value or
appropriately valued factors of production, where required by law or
regulation.
\3\ Section 771(35)(A) of the Tariff Act of 1930 (``the Act'')
defines the dumping margin as the amount by which normal value
``exceeds'' export price (or constructed export price). Section
771(35)(B) defines the weighted-average dumping margin as the
percentage determined by dividing the aggregate dumping margins
determined for a specific exporter or producer by the aggregate
export or constructed export price of that exporter or producer.
---------------------------------------------------------------------------
This methodology was challenged as being inconsistent with the WTO
General Agreement on Tariffs and Trade 1994 (``GATT 1994'') and the
Agreement on Implementation of Article VI of the GATT 1994
(``Antidumping Agreement'') in several disputes.\4\ The WTO Appellate
Body in US--Zeroing (EC), US--Zeroing (Japan), US--Stainless Steel
(Mexico), and US--Continued Zeroing (EC) found the denial of offsets
for non-dumped comparisons in antidumping duty reviews to be
inconsistent with Article 9.3 of the Antidumping Agreement and Article
VI:2 of the GATT 1994, either ``as such,'' or ``as applied'' in certain
reviews, or both.\5\ The WTO Dispute Settlement Body has adopted the
dispute settlement panel reports, as modified by the WTO Appellate
Body, which found the denial of offsets for non-dumped comparisons in
reviews to be inconsistent with the United States' WTO obligations.
---------------------------------------------------------------------------
\4\ United States-Laws, Regulations and Methodology for
Calculating Dumping Margins (``Zeroing'') (``US--Zeroing (EC)''),
WT/DS294/R, WT/DS294/AB/R, adopted May 9, 2006; United States-
Measures Related to Zeroing and Sunset Reviews (``US--Zeroing
(Japan)''), WT/DS322/R, WT/DS322/AB/R, adopted Jan. 23, 2007; United
States-Final Anti-Dumping Measures on Stainless Steel from Mexico
(``US--Stainless Steel (Mexico)''), WT/DS344/R, WT/DS344/AB/R,
adopted May 20, 2008; United States-Continued Existence and
Application of Zeroing Methodology (``US--Continued Zeroing (EC)''),
WT/DS350/R, WR/DS350/AB/R, adopted Feb. 19, 2009.
\5\ US--Zeroing (EC), WT/DS294/R, WT/DS294/AB/R, para.
263(a)(i); US--Zeroing (Japan), WT/DS322/R, WT/DS322/AB/R, para.
190(c) & 190(e); US--Stainless Steel (Mexico), WT/DS344/R, WT/DS344/
AB/R, paras. 165(a) & 165(b); US--Continued Zeroing (EC), WT/DS350/
R, para. 8.1(e), WT/DS350/AB/R, paras. 395(a)(v), 395(d) &
395(e)(ii).
---------------------------------------------------------------------------
Additionally, in US--Zeroing (EC), US--Zeroing (Japan), and US--
Continued Zeroing (EC), the WTO Appellate Body found that the reliance
on weighted-average margins of dumping calculated without granting
offsets for non-dumped comparisons as the basis for determinations made
in certain sunset reviews was inconsistent with Article 11.3 of the
Antidumping Agreement.\6\ In US--Zeroing (Japan), the WTO Appellate
Body also found that the denial of offsets for non-dumped comparisons
in original antidumping duty investigations using transaction-to-
transaction (``T-T'') comparisons \7\ was inconsistent with
[[Page 8102]]
Articles 2.4 and 2.4.2 of the Antidumping Agreement.\8\ The WTO
Appellate Body, in US--Zeroing (Japan), further found that the denial
of offsets for non-dumped comparisons in antidumping duty new shipper
reviews was inconsistent with Articles 2.4 and 9.5 of the Antidumping
Agreement.\9\
---------------------------------------------------------------------------
\6\ US--Zeroing (EC), WT/DS294/AB/RW, para. 469(h)(iv) & (vi);
US--Zeroing (Japan), WT/DS322/AB/R, para. 190(f); US--Continued
Zeroing (EC), WT/DS350/R, para. 8.1(f), WT/DS350/AB/R, para. 395
(f).
\7\ Pursuant to section 777A(d)(1)(A) of the Act, in an
investigation, the Department may determine whether the subject
merchandise is being sold at less than fair value by comparing
normal values of individual transactions to the export prices of
individual transactions for comparable merchandise (the transaction-
to-transaction comparison method). The Department's regulations
state that the Department will use the transaction-to-transaction
method only in unusual situations, such as when there are very few
sales of subject merchandise and the merchandise sold in each market
is identical or very similar or is custom-made. 19 CFR
351.414(c)(1).
\8\ US--Zeroing (Japan), WT/DS322/AB/R, para. 190(b).
\9\ Id., para. 190(d).
---------------------------------------------------------------------------
Following these adverse findings, the United States Trade
Representative (``USTR''), informed the WTO Dispute Settlement Body
(DSB), that the United States intended to comply with its WTO
obligations in these disputes.\10\ Pursuant to section 123(f) of the
Uruguay Round Agreements Act (``URAA''), the USTR notified the House
Ways and Means and Senate Finance Committees of the adverse findings,
and further consulted with these committees concerning implementation.
---------------------------------------------------------------------------
\10\ See WT/DSB/M/213 at para. 2 (minutes of U.S. statement at
May 30, 2006 DSB meeting), WT/DSB/M/226 at para. 34 (minutes of U.S.
statement at Feb. 20, 2007 DSB meeting), WT/DSB/M/251 at para. 9
(minutes of U.S. statement at June 2, 2008 DSB meeting), WT/DSB/M/
266 at para. 57 (minutes of U.S. statement at March 20, 2009 DSB
meeting).
---------------------------------------------------------------------------
Pursuant to section 123(g)(1) of the URAA, on December 28, 2010,
the Department published a notice in the Federal Register proposing to
modify its methodology for calculating weighted-average margins of
dumping and antidumping duty assessment rates to provide offsets for
non-dumped comparisons while using monthly A-A comparisons in reviews,
in a manner that parallels the WTO-consistent methodology the
Department currently applies in original antidumping duty
investigations. Antidumping Proceedings: Calculation of the Weighted
Average Dumping Margin and Assessment Rate in Certain Antidumping Duty
Proceedings, 75 FR 81533 (December 28, 2010) (``Proposed Modification
for Reviews''). In that notice, the Department solicited comments on
its proposal. On February 1, 2011, the Department extended the period
of time for the submission of comments. Antidumping Proceedings:
Calculation of the Weighted Average Dumping Margin and Assessment Rate
in Certain Antidumping Duty Proceedings, 76 FR 5518 (Feb. 1, 2011).
In September, 2011, pursuant to section 123(g)(1)(D) of the URAA,
the USTR submitted a report to the House Ways and Means and Senate
Finance Committees describing the proposed modification, the reasons
for the modification, and a summary of the advice USTR had sought and
obtained from relevant private sector advisory committees pursuant to
section 123(g)(1)(B) of the URAA. Also in September, 2011, pursuant to
section 123(g)(1)(E) of URAA, the USTR, working with the Department of
Commerce, began consultations with both congressional committees
concerning the proposed contents of the final rule and final
modification. This notice is published pursuant to section 123(g)(1)(F)
of the URAA.
Final Modification for Calculating the Weighted-Average Dumping Margin
and Assessment Rate in Certain Antidumping Duty Proceedings
After considering all of the comments submitted, the Department is
adopting the proposed changes to its methodology for calculating
weighted-average margins of dumping and antidumping duty assessment
rates to provide offsets for non-dumped comparisons when using monthly
A-A comparisons in reviews, in a manner that parallels the WTO-
consistent methodology the Department currently applies in original
antidumping duty investigations. In reviews, except where the
Department determines that application of a different comparison method
is more appropriate, the Department will compare monthly weighted-
average export prices with monthly weighted-average normal values, and
will grant an offset for all such comparisons that show export price
exceeds normal value in the calculation of the weighted-average margin
of dumping and antidumping duty assessment rate. Where the weighted-
average margin of dumping for the exporter is determined to be zero or
de minimis, no antidumping duties will be assessed.
In adopting this Final Modification for Reviews, the Department's
intention is to apply a comparison methodology in reviews that
parallels the WTO-consistent methodology the Department currently
applies in original investigations,\11\ which will necessarily include
any exceptional or alternative comparison methods that are determined
appropriate to address case-specific circumstances. Accordingly,
similar to the conduct of original investigations, when conducting
reviews under the modified methodology, the Department will determine
on a case-by-case basis whether it is appropriate to use an alternative
comparison methodology by examining the same criteria that the
Department examines in original investigations pursuant to section
777A(d)(1)(A) and (B) of the Act.
---------------------------------------------------------------------------
\11\ See Antidumping Proceedings: Calculation of the Weighted-
Average Dumping Margin During an Antidumping Investigation; Final
Modification, 71 FR 77722 (Dec. 27, 2006) (``Final Modification for
Investigations'').
---------------------------------------------------------------------------
The Department has rarely applied the transaction-to-transaction
method in original antidumping duty investigations. In the most recent
original investigation in which the Department calculated the weighted-
average margins of dumping using T-T comparisons, the Department did
not grant offsets for non-dumped comparisons.\12\ The WTO Appellate
Body has found the denial of offsets for non-dumped comparisons in
original investigations using T-T comparisons to be inconsistent with
the WTO obligations of the United States. To the extent that any prior
original antidumping duty investigations using T-T comparisons could be
construed as establishing a practice of the Department with respect to
the granting or denial of offsets for non-dumped comparisons when
calculating the weighted-average margin of dumping, the Department
hereby withdraws any such practice. Specifically, if the Department
applies the T-T comparison methodology in a future antidumping duty
proceeding, it will do so without reference to, or reliance on, any
prior practice with regard to the issue of offsets because any such
practice has been withdrawn.
---------------------------------------------------------------------------
\12\ See Notice of Determination Under Section 129 of the
Uruguay Round Agreements Act; Antidumping Measures Concerning
Certain Softwood Lumber Products from Canada, 70 FR 22, 636 (May 2,
2005).
---------------------------------------------------------------------------
In order to implement the revised methodology, it is necessary to
modify certain provisions of the Department's regulations. In
particular, 19 CFR 351.414(a) and (c) indicate a preference for making
A-T comparisons in reviews. These provisions will be modified to permit
application of A-A comparisons in reviews in a manner that parallels
the comparison methods used in original investigations. In addition,
sections 351.414(d)(3) and (e) of the Department's regulations set
forth the time periods over which weighted averages are calculated.
Section 351.414(d)(3) provides that when applying the A-A method, the
weighted averages will normally be calculated over the entire period of
investigation or review, unless another averaging period is deemed
appropriate. Section 351.414 (e) provides that when applying the A-T
method in a review, the Department will calculate weighted-average
normal values on a monthly basis.\13\ The
[[Page 8103]]
Department currently relies on monthly weighted-average normal values
when calculating dumping margins in reviews, and departing from monthly
averaging is not necessary to comply with the WTO findings.
Accordingly, the Department is modifying section 351.414(d)(3) to
permit weighted averages normally to be calculated on a monthly basis
in reviews, regardless of the comparison method used. Conforming
changes to section 351.414(e) will ensure sections 351.414(d)(3) and
(e) do not contain redundant language. The language for the modified
provisions is set forth at the end of this notice.
---------------------------------------------------------------------------
\13\ The Department recognizes that the Statement of
Administrative Action (``SAA'') states that ``the preferred
methodology in reviews will be to compare average to individual
export prices'' (Statement of Administrative Action, p, 843, H. Doc.
No. 103-316, vol. 1 (1994)); however, in order to implement the
findings in the WTO dispute settlement reports, the Department will
restrict the use of that preferred methodology to situations in
which the Department, on the basis of the facts of the specific
administrative review, determines that average-to-transaction
comparisons are more appropriate than average-to-average
comparisons.
---------------------------------------------------------------------------
With respect to the findings of inconsistency in certain of the
Department's sunset reviews,\14\ the Department notes that the
underlying issue is the methodology for calculating weighted-average
dumping margins in original investigations and reviews, which is
addressed by the modifications the Department has made with respect to
investigations and is making herein with respect to reviews. When
making a sunset determination, the statute requires administrative
review margins to be ``considered'' but does not require that the
Department rely on such margins exclusively or in a particular manner
in making its determination whether dumping will continue or recur if
the antidumping order were to be revoked.\15\ Notwithstanding the
Department's prior practice of relying on margins determined in the
original investigation and subsequent reviews when determining whether
dumping is likely to continue in the absence of an antidumping
order,\16\ the Department will modify its practice in five-year sunset
reviews, such that it will not rely on weighted-average dumping margins
that were calculated using the methodology determined by the Appellate
Body to be WTO-inconsistent in US--Zeroing (EC), US--Zeroing (Japan),
and US--Continued Zeroing (EC). However, only in the most extraordinary
circumstances will the Department rely on margins other than those
calculated and published in prior determinations, pursuant to 19 CFR
351.218(e)(2).
---------------------------------------------------------------------------
\14\ US--Zeroing (EC), WT/DS294/AB/RW, para. 469(h)(iv) & (vi),
US--Zeroing (Japan), WT/DS322/AB/R, para. 190(f); US--Continued
Zeroing (EC), WT/DS350/R, para. 8.1(f), WT/DS350/AB/R, para. 395
(f).
\15\ See section 752(c)(1) of the Act.
\16\ See e.g., Certain Circular Welded Carbon Steel Pipes and
Tubes From India, Thailand, and Turkey; Final Results of Expedited
Five-Year (``Sunset'') Reviews of Antidumping Duty Orders, 76 FR
66893 (Oct. 28, 2011), and accompanying Issues and Decision
Memorandum, at Cmt. 1.
---------------------------------------------------------------------------
The Department does not anticipate that it will need to recalculate
the dumping margins in the vast majority of future sunset
determinations to avoid WTO inconsistency, apart from the ``most
extraordinary circumstances'' provided for in its regulations. Instead,
the Department will limit its reliance to margins determined or applied
during the five-year sunset period that were not determined in a manner
found to be WTO-inconsistent in these disputes. Future dumping margins
in reviews will be determined in accordance with this Final
Modification for Reviews. The Department may also rely on past dumping
margins that were not affected by the WTO-inconsistent methodology,
such as dumping margins recalculated pursuant to Section 129
proceedings, dumping margins determined based on the use of adverse
facts available, and dumping margins where no offsets were denied
because all comparison results were positive. If the dumping margins
determined in a manner not found to be WTO-inconsistent in these
disputes indicate that dumping continued with the discipline of the
order in place, those dumping margins alone can form the basis for a
determination that dumping will continue or recur if the order were to
be revoked. Additionally, if dumping margins decline over the five-year
sunset period, or if there are no dumping margins during the five-year
sunset period, decreased volumes may provide another basis to determine
that dumping is likely to continue or recur if the discipline of the
order is removed.
Assessment Rates
Pursuant to section 751(a)(2)(A) of the Act, and 19 CFR 351.212(b),
the Department will determine, and U.S. Customs and Border Protection
(CBP) will assess, antidumping duties on all appropriate entries. When
an administrative review is conducted, and where the weighted-average
margin of dumping for the exporter or producer is determined to be
greater than de minimis, the Department will calculate an importer-
specific ad valorem assessment rate for each importer of subject
merchandise covered by the review. 19 CFR 351.212(b)(1). Importer-
specific assessment rates will be calculated in the same manner as the
exporter's dumping margin, on the basis of average-to-average
comparisons using only the transactions associated with that importer
with offsets being provided for non-dumped comparisons. Where the
weighted-average margin of dumping for the exporter or producer is
determined to be zero or de minimis, no assessment rates will be
calculated and the Department will instruct CBP to liquidate all
imports from the exporter or producer without regard to antidumping
duties.
Analysis of Comments Received
Numerous comments and rebuttal comments were submitted in response
to the Proposed Modification for Reviews. The Department has carefully
considered each of the comments submitted. It has grouped and
summarized the comments according to common themes and has responded
accordingly.
Average-to-Average Comparison Methodology in Reviews
Several commentators argue that the proposal to move to an A-A
comparison methodology in reviews is unnecessarily complex. These
commentators suggest that compliance can be achieved by simply
eliminating the use of zeroing in the A-T comparison methodology. They
note that this would only require the elimination of one line of
programming.
One commentator is concerned that the Department has not adequately
explained why it is necessary to alter its current dumping calculation
methodology in reviews from an A-T methodology to one using monthly
weighted averages in both markets. Some request that the Department
clarify whether it will grant offsets for negative dumping margins only
against positive dumping margins found in the same month or apply
negative dumping margins to offset positive dumping margins across the
entire period of review (POR). Some argue that only a complete POR-wide
offset will be consistent with the Department's current offset
methodology applied in original antidumping duty investigations and
with WTO obligations.
Many are not in favor of relying on the A-A comparison methodology
as the preferred method for reviews because of its potential to mask
dumping. Some commentators argue that using the A-A methodology in
reviews would not be in compliance with the statute and the SAA, and
thus would not withstand judicial scrutiny. Eliminating entry-specific
antidumping duty assessments would violate sections 751(a)(2)(A) and
(C) of the Act, which require the Department to make entry-specific
assessments. The preference for a
[[Page 8104]]
transaction-specific approach is confirmed by the SAA, and is supported
by the statutory language, which indicates the Department will
determine normal value and export price for ``each entry.''
A few argue that nothing in the statute provides discretion for the
Department to use either A-A or T-T in reviews, and that the statutory
construction would make no sense if Congress intended for any of the
three methods to be used in both investigations and reviews. Congress
envisioned and required the Department to determine an individual
margin of dumping for each U.S. entry, and nowhere indicated that
margins should be calculated for averaging groups.
Several commentators note that nothing in the WTO Appellate Body
(AB) rulings or the WTO Antidumping Agreement requires the Department
to adopt an A-A approach in reviews. They argue that the Department
should not confine itself to a single ``one size-fits all'' approach,
but instead, leave open the option of selecting the comparison method
(A-A, T-T, or A-T) on a case-specific basis to capture the maximum
amount of dumping. Some commentators argue that given that the
preferred method as cited in the SAA is A-T, the Department should keep
this option open. Some commentators also argue that the T-T method
would be a good option in many instances, asserting that advancements
in computer technology have eliminated much of the administrative
burden associated with the use of the T-T method.
Department Position: As previously indicated, the Department is
adopting a methodology that parallels the WTO-consistent methodology it
adopted earlier in connection with original antidumping duty
investigations. The Department disagrees that adopting a methodology
with which it is already familiar and experienced in administering is
an unnecessarily complex approach. In addition, while the Department
has previously adopted an interpretation of section 771(35) of the Act
such that non-dumped A-A comparison results offset the aggregate amount
of dumping in the numerator of the weighted-average dumping margin, the
Department has not adopted such an interpretation for the results of A-
T comparisons. The Department finds that this approach preserves the A-
T comparison methodology as a distinct comparison method that is an
alternative to the A-A comparison method.
Previous to this modification, the Department has generally used A-
T comparisons in reviews, with monthly average normal values as
required by section 777A(d)(2) of the Act. The Department did not find
that it was necessary to depart from the use of monthly average normal
values to adopt the A-A comparison method in reviews. To facilitate
contemporaneous comparisons, the Department will utilize monthly
average export prices in making A-A comparisons in reviews. The monthly
averages will be compared to monthly average normal values and the
results will be aggregated with offsets being provided for non-dumped
comparisons. Those offsets will be provided regardless of the month,
model, level of trade, etc. for the other comparison(s) found to have
been dumped.
With respect to the potential for masked dumping as a reason not to
prefer the use of A-A comparisons in reviews, the Department does not
agree that the potential for masked dumping means that A-A comparisons
are unsuitable as the default basis for determining the weighted-
average dumping margins and antidumping duty assessment rates in
reviews. Similar to the conduct of original investigations, when
conducting reviews under the modified methodology, the Department will
determine, on a case-by-case basis, whether it is appropriate to use an
alternative comparison methodology by examining the same criteria the
Department examines in original investigations pursuant to sections
777A(d)(1)(A) and (B) of the Act.
With respect to the question of consistency with existing U.S. law,
the Department does not interpret the Act to prohibit A-A comparisons
from being utilized as a basis to determine weighted-average dumping
margins and assessment rates in reviews. Nor does any provision of the
Act articulate a mandate to use A-T comparisons in reviews. Section
777A(d)(2) simply directs how A-T comparisons should be made when such
comparisons are used. This provision differs markedly from section
777A(d)(1), which specifically provides criteria for selecting a
comparison methodology in original antidumping duty investigations. The
Department interprets this statutory structure as mandating certain
criteria for selecting a comparison methodology in original antidumping
duty investigations, but leaving the Department considerable discretion
in selecting an appropriate comparison methodology in reviews. It is,
therefore, within the Department's discretion to establish criteria for
the selection of an appropriate comparison methodology in reviews,
including criteria that differ from, or are similar to, the criteria
mandated for use in original antidumping duty investigations.
The Department disagrees with comments suggesting that sections
751(a)(2)(A) and (C) of the Act preclude the use of A-A comparisons in
reviews. Section 777A(d) of the Act provides for three distinct
comparison methodologies by which dumping margins may be determined.
Section 751(a)(2), in contrast, does not make reference to any specific
comparison methodology to be used in reviews. Accordingly, the
Department considers that any of the three comparison methodologies
satisfies the requirements of section 751(a)(2). Moreover, section
751(a)(2) does not make reference to either the weighted-average
dumping margin or the importer-specific antidumping duty assessment
rate that is the specific subject of this modification. These
particular results of reviews are not specifically mandated by section
751(a)(2), but are instead features of the Department's long-standing
practice in reviews. Both the weighted-average dumping margin and the
importer-specific antidumping duty assessment rate are the product of
aggregating comparison results obtained using one of the three
comparison methodologies. While calculation of these rates depends on
transaction-specific data, and these rates are applied to entries at
the time of entry or upon liquidation, they do not involve entry-by-
entry determinations of dumping or antidumping duty assessment. The
courts have affirmed these features of the Department's practice,
confirming that section 751(a)(2) does not mandate an entry-by-entry
determination of dumping and antidumping duties.\17\
---------------------------------------------------------------------------
\17\ See e.g.,Timken Co. v. United States, 354 F.3d 1334, 1341-
42 (Fed. Cir. 2004), cert den'd 543 U.S. 976 (Nov. 1, 2004); Corus
Staal BV v. DOC, 395 F.3d 1343, 1347 (Fed. Cir. 2005), cert. denied,
126 S.Ct. 1023 (Jan. 9, 2006).
---------------------------------------------------------------------------
With respect to the language of the SAA \18\, this language does
not clarify the meaning of any statutory provision to the effect that
A-T comparisons are mandatory or that A-A comparisons are prohibited in
reviews. Instead, the SAA makes the point that, in contrast to the
situation with regard to original antidumping duty investigations, a
[[Page 8105]]
preference for A-T comparisons is not inconsistent with Article 2.4.2
of the AD Agreement. Whereas it has been the Department's long-standing
practice to prefer A-T comparisons in reviews, this practice has not
been codified in the statute and it remains within the Department's
discretion to alter this practice upon providing a reasoned
explanation. The Department finds adopting a methodology that parallels
the WTO-consistent methodology it adopted earlier in original
investigations using A-A comparisons will facilitate the administration
of a change to comply with WTO dispute settlement findings on zeroing.
---------------------------------------------------------------------------
\18\ Statement of Administrative Action, at p. 843, H. Doc. No.
103-316, vol. 1 (1994) (``The Agreement reflects the express intent
of the negotiators that the preference for the use of an average-to-
average or transaction-to-transaction comparison be limited to the
``investigation phase'' of an antidumping proceeding. Therefore, as
permitted by Artcle 2.4.2, the preferred methodology in reviews will
be to compare average to individual export prices.'')
---------------------------------------------------------------------------
Continued Effectiveness of the Antidumping Remedy
Several commentators argue that allowing offsets for non-dumped
comparisons will reduce the effectiveness of U.S. trade laws because it
would reduce or eliminate the amount of dumping that would otherwise be
fully captured in the absence of any offsets. In so doing, the proposal
would go against the current law's mandate that 100 percent of the
dumping be fully captured. To illustrate this point, some draw on the
``speeding ticket'' analogy, whereby a driver caught exceeding the
speed limit could nevertheless avoid the fine by submitting evidence
that he or she drove below the speed limit on another occasion. One
commentator noted that the EU and Japan have acknowledged that dumping
can be masked completely through the provision of offsets by asserting
that dumping would not exist but for the denial of offsets. These
commentators also argue that, if the Department decides to provide
offsets, it should allow itself the greatest flexibility to account for
the maximum amount of dumping.
Several commentators suggest that the Department should consider
all three possible comparison methodologies when conducting reviews,
and select whichever method captures the maximum amount of dumping.
Some argue that the T-T method would capture the greatest amount of
dumping, and that recent technology permits greater use of this
comparison methodology. Several further suggest that the Department
should indicate a willingness to use averaging for whichever time
period captures the most dumping (e.g., daily, weekly, monthly, or
period-wide). One commentator notes that because many agricultural
products are perishable, and domestic producers can be harmed via
short-term (i.e., daily or weekly) price suppression, maximum
flexibility should be maintained.
Some commentators suggest that, in addition to maintaining
flexibility in comparison methodologies, the Department should also
implement additional changes unrelated to the revised comparison
methodology on zeroing, to antidumping policies and practices that
preserve the full effectiveness of the antidumping laws. One
commentator suggests the Department should give renewed focus to the
use of provisions addressing fictitious markets and sales that are
outside the ordinary course of trade, should consider shortening the
range of months from which the contemporaneous month may be selected,
and should revise its model match criteria. These commentators argue
that despite their suggested alternatives, there is no way to come into
compliance with the WTO findings without seriously compromising the
effectiveness of the trade remedy laws.
One commentator argues that while it may be appropriate to invoke
section 123(g) of the URAA for purposes of modifying the Department's
regulations, the use of zeroing can be abandoned without the Department
invoking its authority under section 123 because the Department can
choose not to apply the zeroing method on a case-by-case basis. This
party argues that Congress has purposefully imposed section 123
procedures only on amendments or modifications of regulations and
written policy guidance. Because application of the zeroing method is
not pursuant to written policy guidance, U.S. obligations with respect
to adopted WTO reports, and changes pursuant thereto, have no bearing
on domestic procedures. Because section 123 imposes certain procedural
obligations that are not required in order for the Department to
abandon zeroing, this party urges the Department to clarify that any
changes undertaken are made pursuant to the agency's general legal
authority to administer the antidumping laws, and that the Department
did not rely upon or invoke the procedures called for under section
123.
Department Position: The Department has carefully considered all of
the comments provided in this section 123 proceeding, particularly
those comments addressing the need to maintain the effectiveness of the
antidumping remedy, and has determined to adopt this Final Modification
for Reviews. The Department is not taking this step lightly, and it
stands to reason that the adoption of this Final Modification for
Reviews will have some impact on the weighted-average dumping margins
determined in reviews. Nevertheless, the Department, after fully
considering the issue, and consulting with USTR and the relevant
congressional committees, has determined to adopt this Final
Modification for Reviews in order to address the findings of several
WTO dispute settlement reports and to bring its practice into
conformity with the WTO obligations of the United States as determined
in those reports. The Department considers, moreover, that it has
adopted a reasoned and balanced approach to implementation that is
consistent with existing U.S. law and administrable by the agency.
With respect to the Final Modification for Reviews being a reasoned
and balanced approach, the Department is adopting a methodology that
parallels the WTO-consistent methodology the Department previously
adopted in response to WTO dispute settlement reports relating to
investigations. This new methodology for reviews will be the default
methodology in all reviews for which this Final Modification for
Reviews is effective; however, the Department does retain the
discretion, on a case-by-case basis, to apply an alternative
methodology, when appropriate. The Department retained similar
discretion in investigations and has only needed to exercise it in a
limited number of investigations since the adoption of the Final
Modification for Investigations.\19\
---------------------------------------------------------------------------
\19\ See Final Modification for Investigations, 71 FR 77722
(Dec. 27, 2006).
---------------------------------------------------------------------------
With respect to this Final Modification for Reviews being
consistent with existing U.S. law, the courts have held, in more than
thirty cases, that while zeroing is a reasonable interpretation of the
statute, it is a reasonable interpretation of an ambiguous provision of
the statute. The ambiguity recognized by the Court of Appeals for the
Federal Circuit means that it is within the Department's discretion to
alter or abandon its zeroing methodology upon providing a reasoned
explanation.\20\ The Department is hereby altering that methodology, by
adopting an A-A comparison methodology in reviews that parallels the
WTO-consistent methodology adopted in investigations, and providing
offsets when it aggregates the results of
[[Page 8106]]
those comparisons. Consistent with this interpretation of the statute
and application of this methodology, the Department disagrees with
those comments that suggest it is not capturing 100 percent of the
dumping. The Department will capture 100 percent of the dumping that is
determined to exist pursuant to this methodology. Moreover, alternative
methodologies will remain available when determined to be appropriate
on a case-by-case basis.
---------------------------------------------------------------------------
\20\ Timken Company Ltd. v. United States, 354 F.3d 1334, 1342
(Fed. Cir. 2004) (`` * * * while the statutory definitions do not
unambiguously preclude the existence of negative dumping margins,
they do at a minimum allow for Commerce's constructions. Basically,
one number `exceeds' another if it is `greater than' the other,
meaning it falls to the right of it on the number line.''); see also
Corus Staal BV v. Dept. of Commerce, 395 F.3d 1343, 1347 (Fed. Cir.
2005).
---------------------------------------------------------------------------
With respect to this Final Modification for Reviews being
administrable by the Department, as previously indicated, the
Department is adopting a methodology that parallels the WTO-consistent
methodology it adopted earlier in original antidumping duty
investigations using A-A comparisons. In so doing, the Department has
adopted a methodology with which it is already familiar and experienced
in administering. This will facilitate the administration of a change
impacting the 188 reviews the Department conducts in an average year.
The Department is not adopting the comments suggesting that it
calculate dumping margins on the basis of A-A, T-T, and A-T comparison
methodologies, and rely on the methodology providing the highest
weighted-average margin of dumping. Such a proposal would entail
substantial additional work in every case which is not administratively
feasible given the statutory time constraints present in every
proceeding and the Department's limited resources. Moreover, while such
alternative methodologies remain available to the Department on a case-
by-case basis, the Department expects to use the A-A comparison
methodology, with offsets, in most reviews.
With regard to comments suggesting that the Department alter other
aspects of its methodology having nothing to do with the issue of
zeroing, the Department notes that the purpose of this proposal is to
bring the United States into conformity with its WTO obligations as
articulated in the dispute settlement reports cited above. These
suggestions are beyond the scope of this section 123 proceeding. When
these issues arise in a particular review, parties are free to suggest
that the Department reconsider them in the context of that particular
proceeding, as appropriate.
With regard to comments suggesting that the Department need not
utilize a section 123 proceeding in order to adopt changes to its
methodologies to address the findings in the above-cited WTO dispute
settlement reports, these comments are inapposite. As is clear from the
on-going proceeding in which the comments were submitted, the
Department has determined to utilize the procedures of section 123 to
adopt these changes. Whether the Department could have made these
changes outside of section 123 is irrelevant. The Department has
determined that, in this case, it was appropriate to undertake a
section 123 proceeding, with all of its attendant comment and
consultation processes, in order to complete the adoption of these
significant changes in its practice.
Explicit Total Prohibition of Zeroing
A number of commentators argue that the Department should state
explicitly that it will grant offsets when the export price exceeds the
normal value, and specifically eliminate the zeroing methodology. Some
of these commentators suggest that the Department should clearly state
that it will grant offsets equal to the full difference between normal
value and export price when calculating dumping margins using the A-A
comparison methodology in reviews. These commentators note that the
proposed regulations do not explicitly state that the Department will
provide offsets when calculating the dumping margin. Some commentators
suggest that the Department include explicit text in the Final
Modification for Reviews, the regulations, or both, that unequivocally
eliminates zeroing regardless of the comparison methodology employed,
and regardless of any case-specific circumstances. Some assert that any
elimination of a subset of comparisons (i.e., denial of offsets) is a
violation of the United States' WTO obligations. In their view, an
explicit prohibition of zeroing in all instances is necessary to ensure
full compliance with WTO rulings and encourage other countries to
comply with their commitments.
Department Position: With this Final Modification for Reviews, the
Department is taking all steps necessary to address the findings of the
WTO dispute settlement reports at issue and to come into compliance
with its WTO obligations. As a result of this modification, the new,
normal comparison methodology to be used in reviews will be the A-A
comparison methodology (on a monthly basis) and offsets will be
provided when the results of those comparisons are aggregated for
purposes of determining the weighted-average dumping margin. This new
methodology will parallel the WTO-consistent methodology the Department
currently uses in original investigations.
It is not necessary, appropriate or desirable for the Department,
in this Final Modification for Reviews, to go beyond the findings made
in the WTO dispute settlement reports at issue by adopting a total
prohibition of zeroing regardless of comparison method or case-specific
circumstance. The dispute settlement reports at issue address only
certain types of comparisons in particular circumstances, such that a
total prohibition of zeroing is not necessary to come into compliance.
With respect to the findings regarding the calculation of weighted-
average dumping margins and antidumping duty assessment rates in
reviews, the Final Modification for Reviews achieves compliance with
the dispute settlement findings in that it adopts a methodology for
these reviews that parallels the WTO-consistent methodology that is
currently being applied in original investigations. The methodologies
and interpretations set forth and adopted in the Final Modification for
Reviews fully address the findings of WTO inconsistency.
Clarification on the Application of an Alternative Comparison
Methodology
Several parties request clarification as to which circumstances
would trigger the use of an alternative comparison methodology, and
whether zeroing would be used in the alternative calculation
methodology. These commentators also encourage the Department to
narrowly tailor the circumstances under which an alternative comparison
methodology is used. One commentator notes its concern that the
reference to an alternative methodology in the Proposed Modification
for Reviews is ambiguous, and will lead to parties manipulating the
system for a certain preferred comparison methodology.
Some commentators remind the Department that if it is considering
the use of the targeted dumping methodology as an alternative
methodology, this methodology is to be employed as an exception, in
very limited circumstances. One commentator suggests the Department
should develop an overall final rule with regard to targeted dumping
that is explicitly consistent with Article 2.4.2 of the Antidumping
Agreement.
Some commentators state that the targeted dumping methodology was
not intended to apply to reviews, and request that the Department
explicitly state that it will not employ targeted dumping in this
context.
Department Position: In its Final Modification for Reviews, the
Department provides additional
[[Page 8107]]
clarification of the circumstances that could trigger the use of an
alternative comparison methodology. The Proposed Modification for
Reviews indicated that the Department would use monthly A-A
comparisons, except where it determines that application of an
alternative comparison method is more appropriate. The Department also
indicated its intent to apply the methodology in a manner that
parallels the WTO-consistent methodology the Department currently
applies in investigations.\21\
---------------------------------------------------------------------------
\21\ Proposed Modification for Reviews, 75 FR at 81534.
---------------------------------------------------------------------------
In this Final Modification for Reviews, the Department clarifies
that because the methodology being applied will parallel the WTO-
consistent methodology that the Department currently applies in
original investigations, it will necessarily include any exceptional or
alternative comparison methods determined appropriate to address case-
specific circumstances. The Department's regulations specifically
describe three types of comparison methodologies that might be used to
determine margins of dumping and antidumping duty assessment rates.
Although the Final Modification for Reviews adopts the A-A method as
the default method in reviews, the Department may determine to use any
of the alternative comparison methodologies when deemed appropriate in
a particular case.
The Department determines that it would be inappropriate to further
speculate as to either the case-specific circumstances that would
warrant the use of an alternative methodology in future reviews, or
what type of alternative methodology might be employed. These
determinations would be highly dependent on the facts of the individual
proceeding. However, as is the case with all administrative
proceedings, interested parties will have the opportunity to comment on
whether an alternative comparison method is warranted during the normal
course of the review.
Assessment Rate Calculations
Some commentators request clarification as to how the Department
intends to calculate antidumping duty assessment rates. A few request
that the Department specifically clarify that it will continue to
calculate importer-specific antidumping duty assessment rates. Some
commentators argue the Proposed Modification for Reviews raises the
possibility that antidumping duty assessment rates could be impacted by
the level of dumping on other importers' entries, which contravenes the
current statutory and regulatory requirements that the Department
determine the level of dumping required for each entry during the
review period and that it determine the assessment rate on an importer-
specific basis. Some commentators suggest that the Department state
that it will calculate antidumping duty assessment rates for individual
importers without the zeroing method.
A few commentators suggest that before issuing a final section 123
determination, the Department should consider issuing a separate notice
identifying any proposed changes in its calculation of importer-
specific assessment rates necessitated by the proposed change in the
Department's methodology to permit additional public comments. It is
further suggested that the Department release for public comment the
standard calculation program that it intends to use in reviews.
Department position: For purposes of this Final Modification for
Reviews, the Department is providing additional explanation about the
antidumping duty assessment methodology being adopted. The Department
has determined that a further or separate comment period is not
justified. The calculation program language, including any antidumping
duty assessment determinations, particular to any specific review, will
be available to parties through the Department's usual disclosure
process and parties are free to comment on it during the course of the
individual review.
With respect to the issue of assessment rates, when a review is
conducted applying the A-A comparison methodology, and the weighted-
average margin of dumping for the exporter or producer is determined to
be zero or de minimis, no assessment rates will be calculated and the
Department will instruct CBP to liquidate all imports from the exporter
or producer without regard to antidumping duties, regardless of
importer.
When the weighted-average margin of dumping for the exporter or
producer is determined to be greater than de minimis, based on the A-A
comparison methodology, the Department will perform an additional
calculation to determine the assessment rate for each individual
importer that purchases from the exporter or producer in question. This
additional calculation will effectively repeat the first calculation
performed at the exporter or producer level; however, in this case, the
export transactions involved in the calculation will be limited to
those involving merchandise imported by the individual importer. The
monthly, weighted-average export prices of those transactions will be
compared to monthly normal values, and the results will be aggregated
with offsets being provided for non-dumped comparisons. Those offsets
will be provided on an importer-specific basis in the aggregation,
regardless of the month, model, level of trade, etc. for the other
comparison(s) found to have been dumped.
Comments on the Proposed Regulations
Several commentators note that the proposed rule at Sec.
351.414(c)(1) does not provide sufficient clarification of what
constitutes ``a particular case.'' The commentators argue that without
further clarification of the term, the investigating authority would
have excessive discretion in interpreting and implementing the
regulation. Therefore, the commentators request the Department to
specify, in the final regulations, the exceptional circumstances that
would allow the use of an alternative comparison methodology. These
commentators suggest that the language of Sec. 351.414(c)(1) regarding
choice of method should be clarified to indicate when and how the
Secretary might choose an alternative comparison methodology by making
clear the circumstances in which it may find it ``more appropriate'' to
deviate from its proposed methodology and use a ``different comparison
method'' to calculate dumping margins and antidumping duty assessment
rates in a review. One commentator goes further and suggests that the
Department specify not only the specific circumstances that make it
appropriate to deviate from the preferred methodology, but also which
alternative comparison methodology would be used in particular
circumstances.
Several commentators note that the proposed rules do not specify
that zeroing will not be used. Therefore, these commentators request
that the final rule specifically include a provision for granting
offsets for non-dumped sales in all comparison methodologies. One
commentator suggests clarification of the language of Sec.
351.414(d)(3), with respect to the comparison of weighted-average
monthly export price or constructed export price to the weighted-
average normal value for the contemporaneous month. Specifically, the
commentator suggests that it be made clear that while aggregating the
comparisons of different months covered in a review, the
[[Page 8108]]
Secretary will provide offsets for those comparisons which result in
negative dumping margins.
Department Position: The Department disagrees that additional
clarification of the regulations is necessary or appropriate. The
revised regulations describe three types of comparison methodologies
that might be used to determine margins of dumping and antidumping duty
assessment rates. The overarching purpose of 19 CFR 351.414 is to
implement section 777A(d) of the Act and to set forth the three
statutory methodologies for establishing and measuring dumping
margins.\22\ Section 351.414(c), as revised by this Final Rule and
Final Modification for Reviews, sets forth the default comparison
methodology to be used in different contexts, and Sec. 351.414(d)
describes generally how the A-A method will be applied. The revised
regulation makes clear that the A-A comparison methodology will be the
default methodology in all reviews for which the Final Rule and Final
Modification for Reviews applies. The Department has also explained
that because the methodology being adopted will parallel the WTO-
consistent methodology the Department currently applies in original
investigations, it will necessarily include any exceptional or
alternative comparison methodologies determined appropriate to address
case-specific circumstances. The Final Rule allows sufficient
flexibility for the Department to apply alternative comparison
methodologies when necessary.
---------------------------------------------------------------------------
\22\ See Antidumping Duties Countervailing Duties, 62 FR 27296,
27374 (May 19, 1997) (Preamble, Final Rule).
---------------------------------------------------------------------------
The Department has always retained discretion under its regulations
to apply any of the three comparison methodologies in any context, and
has exercised this discretion only in a limited number of
circumstances. It would be inappropriate to further speculate as to
which case-specific circumstances might warrant the use of an
alternative comparison methodology in future reviews as this
determination would be highly dependent on the facts of the individual
proceeding. Because any description of such circumstances would be
speculative, at best, the revised regulations do not specify the
exceptional circumstances that might trigger the use of an alternative
comparison methodology. Such questions are best addressed in the
context of individual proceedings. As is the case with all proceedings,
interested parties would have the opportunity to comment on whether an
alternative comparison methodology is warranted during the normal
course of the proceeding.
The Department further disagrees that the revised regulations must
specifically indicate that offsets will be provided. The purpose of the
regulation is to describe in general terms the comparison methodologies
available, and the default methodology to be employed in different
contexts. Greater specificity as to when offsets will be provided under
each comparison methodology is beyond the intended purpose of the
regulation, and is unnecessary for purposes of adopting a methodology
that is WTO-consistent. The Department has already made clear that its
revised methodology for reviews will parallel the WTO-consistent
methodology the Department currently applies in original
investigations, and that offsets will be provided when using this
methodology. The Department has been granting offsets in original
investigations since 2007 without specific regulatory language
directing it to do so. The Department has further explained, above, how
assessment rates will be determined for individual importers. The
revised regulations coupled with the descriptions contained in this
Final Modification for Reviews and the Department's responses to
comments are sufficient. The Department does not consider that the
revised regulations require further elaboration. Furthermore, as more
fully explained in the Explicit Total Prohibition of Zeroing section of
this notice, above, the Department disagrees that it is either
necessary or appropriate to adopt a total prohibition--either explicit
or implicit--of zeroing, regardless of the comparison methodology or
case-specific circumstance. The methodologies and preferences set forth
in this Final Modification for Reviews and the revised regulations,
fully address the findings of WTO inconsistency.
Sunset Determinations
Many commentators welcome the United States' recognition that it
should not rely on dumping margins based on the zeroing methodology
when conducting sunset reviews. These commentators agree that
international obligations prohibit the use of dumping margins
calculated with zeroing for purposes of sunset determinations. One
commentator argues that the Supreme Court's decision in Murray v.
Charming Betsy, 6 U.S. (2 Cranch.) 64, 118 (1804) (Charming Betsy),
compels the Department to terminate its use of zeroing in sunset
reviews immediately in order to avoid violating the United States'
international obligations. See Fed.-Mogul Corp. v. United States, 63
F.3d 1572, 1581 (Fed. Cir. 1995) (citing Charming Betsy, 6 U.S. (2
Cranch.) at 118). Several commentators argue that failure to
recalculate dumping margins would result in costly and unnecessary
litigation in light of the ruling in US--Zeroing (Japan), in which the
Appellate Body found that reliance on dumping margins based on the
zeroing methodology in sunset reviews is inconsistent with U.S. WTO
obligations.
Some commentators argue that the Proposed Modification for Reviews
does not sufficiently account for the many sunset reviews currently
pending where past dumping margins were based on zeroing. Many suggest
that the Department should recalculate all dumping margins relied upon
in sunset reviews using the new WTO-consistent methodology. These
commentators point out that dumping margin calculations and, hence,
zeroing are relevant to determining both whether revocation of an order
would be likely to lead to a continuation or recurrence of dumping and
the magnitude of the dumping margin likely to prevail if the
antidumping order were revoked. Another commentator goes on to observe
that the Department must evaluate the change in dumping margins over
time to ascertain changes in the exporters' pricing behavior as part of
its sunset determinations. To conduct a trends analysis of this sort,
it is necessary that the dumping margins be calculated in a consistent
manner over time, which can only be done by eliminating the zeroing
methodology from all calculations.
Certain commentators argue that the Department correctly recognized
in the Proposed Modification for Reviews that it is not precluded from
recalculating dumping margins from prior proceedings to eliminate
zeroing for sunset reviews. One commentator points out that sections
752(c)(1) & (3) of the Act direct the Department to consider the prior
rates it has calculated, not simply to adopt them wholesale, and that
the Department may consider such other price, cost, market, or economic
factors it deems relevant (See Sec. 752(c)(2) of the Act). Another
commentator argues that, regardless of whether certain dumping margins
form the basis for the sunset determination, the statute (section
751(c) of the Act) requires the Department to consider all dumping
margins determined during the five-year period, and therefore,
recalculation cannot be avoided. A few other commentators request that
the Department add clarifying language to 19 CFR 351.414 to clearly
state that it will not rely on dumping margins that
[[Page 8109]]
contain zeroing in future sunset reviews, that it will recalculate
dumping margins that contain zeroing in future sunset reviews, or both.
Several commentators urge that the Department should stop relying
on dumping margins that contain zeroing in sunset reviews immediately.
One commentator argues that, for sunset reviews, there is no reason to
delay implementation until 60 business days after the date of
publication of the Final Modification for Reviews because the proposed
change is only to the Department's practice, and no change is proposed
to its regulation.
Other commentators make more specific proposals for implementing
the new practice in sunset reviews. One such proposal is for the
Department to recalculate dumping margins without zeroing upon a
showing by a respondent company that its individual dumping margin or
the ``all others'' dumping margin would be zero or de minimis. Another
commentator proposes that the Department conduct a changed
circumstances review to determine whether dumping would be likely to
continue or recur if the order were revoked upon a showing that the
dumping margins without zeroing in three reviews completed after
January 23, 2007, are zero or de minimis. One other commentator
requests that the Department both recalculate dumping margins in a
sunset review to eliminate zeroing, effective immediately, and then
transmit to the ITC the non-zeroed dumping margins that are likely to
exist if an order were revoked effective for sunset reviews initiated
after the publication of the proposed rules. One commentator concerned
about sunset reviews contends that the Department only suggests it will
use section 129 to implement the DSB's recommendations and rulings in
US--Continued Zeroing (EC), WT/DS350/R, para. 8.1(f), WT/DS350/AB/R (DS
350), but does not commit to do so. This commentator asks the
Department to state clearly that it will implement DS 350 under section
129 when making its determination. This commentator also contends that
there is no impediment to reopening prior sunset determinations under
section 129.
Department Position: In response to comments from several parties,
in the Final Modification for Reviews, the Department clarified that
when making sunset determinations, it will modify its practice such
that it will not rely on dumping margins determined in a manner found
to be WTO-inconsistent in US--Zeroing (EC), US--Zeroing (Japan), US--
Stainless Steel (Mexico), and in US--Continued Zeroing (EC). While it
is possible that in some instances, dumping margins will need to be
recalculated to avoid reliance on such dumping margins, the Department
finds that those situations can be addressed on a case-specific basis.
When determining whether revocation of an antidumping order would
be likely to lead to continuation or recurrence of dumping, section
752(c)(1) of the Act directs the Department to consider dumping margins
determined during the original investigation and in subsequent reviews,
and import volumes of the subject merchandise. The Department's
regulations further provide that only in the most extraordinary
circumstances will the Department rely on dumping margins other than
those calculated and published during prior determinations. 19 CFR
351.218(e)(2)(i). The Department expects that in the vast majority of
cases, it will have a sufficient number of dumping margins, determined
in a manner not found to be WTO-inconsistent in these disputes, and
sufficient information pertaining to import volumes, upon which to base
its sunset determinations. Future dumping margins in reviews will be
calculated in accordance with this Final Modification for Reviews.
Furthermore, the Department may also rely on past dumping margins
determined in a manner not found to be WTO-inconsistent in these
disputes, such as dumping margins recalculated pursuant to section 129
proceedings, dumping margins determined on the basis of adverse facts
available and dumping margins where no offsets were denied because all
comparison results were positive. Additionally, if dumping margins
declined over the five-year period, or if there are no dumping margins,
decreased volumes provide another basis that indicates whether dumping
is likely to continue or recur if the discipline of the order is
removed.
Although the Department will evaluate each sunset determination on
a case-by-case basis to determine whether recalculations are needed,
the Department does not anticipate that, apart from the ``most
extraordinary circumstances'' already provided for in its regulations,
it will need to rely on dumping margins other than those published in
prior determinations in order to avoid reliance on margins determined
in a manner found to be WTO-inconsistent in these disputes. For these
reasons, the Department disagrees that it is necessary to adopt a
practice or methodology which assumes that previously determined
dumping margins will always need to be recalculated in the context of
sunset reviews.
The Department disagrees that it is required to recalculate dumping
margins determined in a manner found to be WTO-inconsistent in these
disputes that were calculated during the five-year period so that it
may examine dumping margin trends over time. When determining whether
dumping is likely to continue in the absence of an antidumping duty
order during a five-year sunset review, the Department looks to whether
dumping continued at any level after the issuance of the order.\23\
While section 752(c)(1) of the Act directs the Department to
``consider'' previously determined dumping margins as the basis for its
likelihood determination, there is no requirement that all dumping
margins determined during that period form the basis for deciding
whether the order should be continued. Accordingly, the Department does
not agree that all dumping margins calculated during the five-year
sunset period must be recalculated as a matter of course in order for
the U.S. to be compliant with the statute.
---------------------------------------------------------------------------
\23\ See Certain Circular Welded Carbon Steel Pipes and Tubes
From India, Thailand, and Turkey; Final Results of Expedited Five-
Year (``Sunset'') Reviews of Antidumping Duty Orders, 76 FR 66893
(Oct. 28, 2011), and accompanying Issues and Decision Memorandum, at
Cmt. 1; see also Statement of Administrative Action, at 889 and 890,
H. Doc. No. 103-316, vol. 1 (1994); the House Report, H. Rep. No.
103-826, pt. 1, at 63-64 (1994).
---------------------------------------------------------------------------
The Department further disagrees with the suggestion that it should
modify section 351.414(d) of its regulations to indicate that the
Department will recalculate dumping margins in sunset determinations
using the A-A comparison methodology. The Department has already
indicated that it does not anticipate that it will need to recalculate
dumping margins other than in the most extraordinary circumstances, and
such circumstances are already provided for in its regulations. See 19
CFR 351.218(e)(2)(i). Accordingly, those instances where the Department
may need to rely on dumping margins other than those previously
determined can be addressed pursuant to 19 CFR 351.218(e)(2)(i) on a
case-specific basis.
The Department has further clarified that this Final Modification
for Reviews will apply to all sunset reviews pending before the
Department for which either preliminary results of sunset review, or
expedited final results of sunset review are issued more than 60 days
after the date of publication of the Department's Final Modification
for Reviews. The 60-day period will allow sufficient time
[[Page 8110]]
prior to issuance of a preliminary sunset determination, or a final
expedited sunset determination, for parties to provide comments within
the context of each individual proceeding. For reasons fully set forth
in response to comments on the Effective Date of Implementation section
of this notice, the Department finds this to be an adequate amount of
time to permit parties and the Department to respond to novel and
complex issues that arise as a result of implementing the modified
regulations. The Department does not find that a separate notice and
comment period is necessary.
The Department finds the commentator's request that it commit to
implementing ``as applied'' findings of inconsistency through a section
129 proceeding in certain sunset reviews to be beyond the scope of this
section 123 determination. See Implementation through Section 129
Proceedings and Application to Completed Reviews section of this
notice. The purpose of this Final Modification for Reviews is not to
address or fix how the Final Modification for Reviews is to be applied
in the specific proceedings that were challenged, but rather is to
address the broad elements of the prior practice that were found WTO-
inconsistent. The Department has addressed the inconsistencies found
with respect to sunset reviews by including a modification of the
methodology that will be applied in future sunset reviews. Whether any
particular section 129 proceeding will be requested by the Office of
the USTR for certain sunset reviews is beyond the scope of this Final
Modification for Reviews.
Transaction-to-Transaction Comparisons in Investigations
A few commentators requested clarification concerning the
Department's use of the T-T comparison methodology in original
antidumping duty investigations. One commentator interpreted the
Department's statement to signify that the Department would provide
offsets for non-dumped transactions when applying the T-T methodology.
Others requested confirmation that it will provide offsets for non-
dumped sales when using this comparison methodology.
Department Position: In its Proposed Modification for Reviews, the
Department stated that ``to the extent that any prior original
antidumping duty investigations using T-T comparisons could be
considered as establishing a practice of the Department with respect to
the granting or denial of offsets for non-dumped comparisons when
calculating the weighted average margin of dumping * * *, the
Department proposes to withdraw any such practice.'' 76 FR 81534. In
its Final Modification for Reviews, the Department has now clarified
that to the extent that any prior original antidumping duty
investigations using T-T comparisons could be considered an established
practice of the Department with respect to the denial of offsets for
non-dumped comparisons when calculating the weighted average margin of
dumping, the Department withdraws any such practice. Specifically, when
the Department applies the T-T comparison methodology in a future
proceeding--regardless of whether offsets are provided--it will do so
without reference to or reliance on any prior practice because, such
practice has been withdrawn.
Effective Date of Implementation
A number of commentators propose that the Department implement the
new methodology in reviews initiated 60 days or later after the date of
the publication of the Final Modification for Reviews. Some of these
parties explain that applying the new method to reviews that are
pending as of the effective date would confuse interested parties in
several different ways. These parties argue that, due to the
complicated nature of this new policy, the Department is likely to face
many complex and novel issues concerning its case-specific application.
Some commentators claim that implementing the new methodology in
reviews that have already been initiated would be unfair to all parties
who base decisions on whether to request and/or participate in reviews
on the application of certain standard methodologies. Some commentators
argue that because the date of the preliminary results of review for a
proceeding can be subject to circumstances in the individual
proceeding, the methodology applied could differ among proceedings that
were initiated on the same day, which they claim would result in
arbitrary treatment. One party argues that the arbitrariness of the
effective date would provide an incentive for respondents to create
complexity to slow the process or for domestic parties to neglect
inadequacies to expedite the process. They contend that the statute
intends for neither scenario and many of these concerns can be
mitigated by applying the final rules to newly initiated reviews.
Other commentators argue that the Department's proposed effective
date is too long and takes unnecessary time to implement the new
policy. Some commentators cite to the Final Modification for
Investigations (71 FR 77722), as precedent, and note that in that
instance, the Department applied the new methodology to all
investigations that were pending before the Department. Other
commentators suggest that the Department apply the new method to all
reviews where the final results are scheduled to be issued more than 60
days after the date of publication.
Some commentators argue that, because it only takes a simple
programming modification to implement the final rule, the 60-day
implementation period is too long even for a review for which the
preliminary results have been issued. Several of these commentators
argue that faster implementation will pose less litigation risk to the
United States and result in a reduced litigation burden for all
parties. Some parties argue that because the provision of offsets is an
entirely administrative practice, the modification can be applied
immediately, and there is no need for further delay.
Several commentators suggest that the effective date should be the
date of the publication of the notice of the final rule. Some
commentators suggest that the Department implement the final rule and
modification for all reviews where the final results are expected to be
issued 30 business days or later after the publication date. Some other
commentators contend that, in accordance with section 123(g)(2) of the
URAA, the 60-day period should begin when the Department begins its
consultation with Congress unless the President determines an earlier
effective date. One commentator argues that the effective date should
be either the date of the publication of the final rules or 60 days
after the Department begins its consultation, whichever is later. Some
other commentators request that the Department implement this new
policy immediately but do not suggest any specific date as the
effective date.
Some commentators in favor of an earlier effective date argue that
an earlier date would not impose a greater administrative burden
because applying the necessary changes would not require new factual
information. These parties further argue that the Department's Proposed
Modification for Reviews methodology has afforded adequate notice to
the public that the methodology might change.
One commentator requests that the Department conduct all sunset
reviews using dumping margins calculated without zeroing no later than
the by the effective date adopted for reviews.
[[Page 8111]]
Department Position: After careful consideration of the arguments
presented by the commentators and of the information needed to
implement this change, and weighing the administrative burdens, the
Department determines that it will apply the Final Modification for
Reviews in reviews pending before the Department for which the
preliminary results are issued more than 60 days after the date of
publication of the Department's Final Rule and Final Modification for
Reviews. Additionally, the Final Modification for Reviews will apply in
all sunset reviews pending before the Department for which either the
preliminary results of sunset review, or expedited final results of
sunset review, are issued more than 60 days after the date of
publication of the Department's Final Rule and Final Modification for
Reviews. In the Proposed Modification for Reviews, the Department
indicated that the new methodology would be effective in reviews
pending before the Department for which the preliminary results are
issued more than 60 business days after the date of publication of the
Department's final rule and modification. As further explained below,
the Department finds 60 days to be an adequate amount of time for
implementation. Therefore, in this Final Modification for Reviews, the
Department has eliminated the requirement that preliminary results be
issued more than 60 business days after the Final Modification for
Reviews in order for the new method to apply.
This timetable for applying the new methodology is legally
permissible and appropriate. The Department is adopting this Final
Modification for Reviews in response to several WTO dispute settlement
findings, pursuant to section 123(g)(1) of the URAA. Section 123(g)(2)
of the URAA provides that a final rule or modification may not go into
effect before the end of the 60-day period after the consultations
described in section 123(g)(1)(E) begin, unless the President
determines that an earlier effective date is in the national interest.
While the statute establishes the manner of determining the effective
date of any final rule or modification adopted pursuant to section 123,
the statute does not specify whether the final rule or modification
must apply only to new segments of proceedings initiated after the
effective date, or may apply to any segments pending as of the
effective date.
Similarly, the SAA provides no more specific guidance regarding the
application of any final rule or modification adopted pursuant to
section 123. The SAA states that section 129 determinations will apply
only with respect to entries occurring on or after the effective
date.\24\ However, the SAA makes no such statement with respect to
section 123 modifications. The SAA merely states, ``A final rule may
not go into effect before the end of the 60-day consultation period
unless the President determines that an earlier date is in the national
interest.'' \25\
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\24\ See Statement of Administrative Action, p. 1026, H. Doc.
No. 103-316, vol. 1 (1994).
\25\ See Statement of Administrative Action, p. 1021, H. Doc.
No. 103-316, vol. 1 (1994).
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The applicable date for previous section 123 determinations has
been determined by the Department on a case-by-case basis. In four
prior section 123 proceedings, the Department has applied the final
modification or final rule to segments initiated after the effective
date.\26\ On other occasions, the Department has adopted and applied a
change in policy involving a statutory interpretation to all segments
pending as of the date of the change.\27\
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\26\ See e.g. Procedures for Conducting Five-Year (``Sunset'')
Reviews of Antidumping and Countervailing Duty Orders, 70 FR 62062
(Oct. 28, 2005) (applying amended regulations to sunset reviews
initiated after the effective date); Notice of Final Modification
for Reviews of Agency Practice Under Section 123 of the Uruguay
Round Agreements Act, 68 FR 37125, 37138 (June 23, 2003) (applying
new privatization methodology to investigations and reviews
initiated on or after the effective date); Antidumping Proceedings:
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186,
69197 (Nov. 15, 2002) (``Arms Length Test'') (applying new
methodology to investigations and reviews initiated on or after the
effective date); Amended Regulation Concerning the Revocation of
Antidumping and Countervailing Duty Orders, 64 FR 51236 (Sept. 22,
1999).
\27\ See Basis for Normal Value When Foreign Market Sales Are
Below Cost, Policy Bulletin 98.1 (Feb. 23, 1998); Treatment of
Inventory Carrying Cost in Constructed Value, Policy Bulletin 94.1
(Mar. 24, 1994); Final Modification for Investigations, 71 FR 77722
(Dec. 27, 2006) (eliminating zeroing in investigations pending
before the Department as of the effective date of the Final Rule.)
---------------------------------------------------------------------------
The Department disagrees with commentators that it is in a position
to adopt a more expedient implementation date because this Final
Modification for Reviews does not entail a statutory change. When
considering changes or modifications to a longstanding methodology in
an individual determination, the Department is required, at a minimum,
to provide parties with adequate notice and opportunity to comment
within the context of each proceeding, prior to making its final
determination. Section 782(g) of the Tariff Act of 1930; see also Koyo
Seiko Co., Ltd v. United States, 516 F. Supp. 2d 1323, 1333-34 (CIT
2007), aff'd 551 F.3d 1286 (Fed. Cir. 2008).
This Final Modification for Reviews entails a modification to the
averaging methodology applied in reviews that was longstanding.
Therefore, in transitioning to the new methodology, the Department will
need to ensure that sufficient time is provided within the context of
individual proceedings to allow parties to submit any new data that may
be necessary, if desired. The Department will then need time to examine
and analyze any additional data, and will need to permit parties to
provide comments on any new data that is submitted. Additionally,
applying the new methodology prior to issuance of the preliminary
results is appropriate because the Department will need to allow
sufficient time for parties to comment on the application of the new
methodology as it applies in the context of individual proceedings.
The Department is not persuaded that it should adopt a shorter
timetable simply because it was able to do so when it modified its
methodology to provide offsets in investigations. In that instance, the
Department found it appropriate to apply the modification to all
pending proceedings at the time of the effective date, but only after
ensuring the feasibility of such an expedited implementation, and
concluding that such a timeframe would not unfairly prejudice any of
the parties to those proceedings.\28\ With respect to this Final
Modification for Reviews, the Department determines that the modified
methodology must apply only in proceedings where the preliminary
results have not yet been issued in order to ensure that all parties
have ample time to submit any new data and provide comment, and that
the Department has adequate time to consider any new data and comments.
For all of these reasons, the Department is not persuaded by arguments
that it could apply the new method more expeditiously without
compromising principles of accuracy, fairness, and due process.
---------------------------------------------------------------------------
\28\ See Final Modification for Investigations, 71 FR at 77725.
---------------------------------------------------------------------------
Conversely, the Department also disagrees with commentators who
argue that a longer timetable is necessary. The Department agrees that
the new policy represents a substantive shift in methodology, and the
Department expects to encounter novel issues as it begins to apply this
methodology. The timetable already allows parties the opportunity to
submit any new data, and to provide comment prior to the preliminary
results. Parties will then have an additional opportunity to comment on
the methodology prior to the final results, after it is applied. The
Department finds this to be an adequate
[[Page 8112]]
amount of time that will permit parties and the Department to respond
to any novel or complex issues that arise in any particular case as a
result of the new method.
The Department does not agree that to maintain fairness and non-
arbitrary application of methodology, it must only apply the new
methodology to reviews initiated after the effective date. Uncertainty
of methodology is an insufficient justification for prolonging the
application of a new methodology. The United States uses a
``retrospective'' assessment system under which final liability for
antidumping duties is determined after the merchandise is imported. 19
CFR 351.212(a). While the Department must abide by notice provisions of
the statute, changes in methodology like all other antidumping review
determinations, permissibly involve retroactive effect. SKF USA Inc. v.
United States, 537 F.3d 1373, 1381 (Fed. Cir. 2008). Requiring changes
to be applied only to future entries would hinder the Department's
ability to give timely effect to any changes in its own practices. Koyo
Seiko Co., 516 F. Supp. 2d at 1334, aff'd 551 F.3d at 1286. Moreover,
the public has now been on notice of an impending change in methodology
because the Proposed Modification for Reviews has been in the public
realm since December 28, 2010, providing more than ample time for
parties to consider their options with respect to upcoming review
periods.
Implementation Through Section 129 Proceedings and Application to
Completed Reviews
Many commentators agree that implementation of the adverse WTO
dispute settlement findings listed in the Proposed Modification for
Reviews should occur pursuant to section 129 of the URAA and many
further agree that pursuant to section 129, any changes must be
prospective only. Relying on section 129(c)(1), these commentators
further argue that the changes should apply only to entries that remain
unliquidated on or after the date USTR directs the Department to
implement. Several commentators claim that the Department has
consistently applied section 129 in this manner.
Numerous other commentators argue that the calculation and
assessment of antidumping duties using zeroing should have ceased when
the reasonable period of time (``RPT'') for compliance ended for the
various WTO rulings. These commentators claim that dumping margins
should be recalculated for the reviews involved in each of the WTO
proceedings as well as any determinations or antidumping duty
assessments arrived at using zeroing after the end of the applicable
RPT. According to some other commentators, this means that the United
States must immediately cease to apply cash deposit or antidumping duty
assessment rates calculated using zeroing and replace them with non-
zeroed rates, must reliquidate any entries that were liquidated after
the end of the RPT at assessment rates calculated with zeroing, must
recalculate cash deposit rates relying on zeroing and release excess
cash deposits made after the RPT, and must not use zeroing in any
ongoing reviews. One commentator emphasizes that this must occur
regardless of the dates of entry. Other commentators argue that any
excess duties collected should be refunded with interest.
Some commentators urge the Department not to interpret section
129(c)(1) as precluding the agency from taking action that affects
imports that entered before the date on which USTR directs the
Department to implement. Instead, consistent with past representations
to the WTO, the Department should find that section 129(c)(1) is
ambiguous with respect to the treatment of such entries.
Some commentators argue that Commerce might use one or more of
several alternatives to come into compliance with respect to past
entries, including the use of a changed circumstances review, voluntary
remands for any reviews subject to litigation, use of the Department's
broad authority under 19 U.S.C. 1617 to settle antidumping claims, or
legislation requiring CBP to reliquidate entries that were liquidated
after the end of the RPT at assessment rates using zeroing.
Other commentators urge the Department to apply the final rule to
unliquidated entries in all pending reviews, i.e., not just those
subject to section 129 proceedings. They contend that treating imports
from different countries and under different orders differently will
prompt new and unnecessary litigation in the WTO. Other commentators
argue that the final rule should be effective retrospectively to any
entries in a completed review that remain unliquidated as of 60 days
after the publication of the Final Modification for Reviews. Some
commentators claim that the Department should apply the new methodology
to entries that have not been liquidated due to pending litigation. One
commentator contends implementing in this manner would be prospective
to the future liquidation, and would not constitute retroactive
implementation. Some other commentators argue that any dumping margins
with present effects should be revised and applied prospectively from
the effective date.
Another commentator points out that when the Proposed Modification
for Reviews speaks of applying the new methodology pursuant to section
129, it only references disputes brought by the European Union, Japan
and Mexico. This commentator contends, however, the Appellate Body's
finding in US-Zeroing (EC) makes clear that the United States'
obligations to remedy zeroing extend to reviews even though a Member
may only have challenged the Department's use of zeroing in the
antidumping investigation. Thus, the Department must recalculate
dumping margins and antidumping duty assessment rates for subsequent
reviews of those orders. Other commentators urge the Department to
apply the new methodology to reviews subject to all ongoing and future
WTO proceedings in which zeroing is an issue before a panel or the
Appellate Body.
Other commentators argue that the statute prohibits the Department
from implementing this new policy on entries covered by completed
reviews because they all entered the United States before the effective
date. The statute only permits the Department to abandon zeroing with
respect to entries occurring on or after the date that USTR directs
implementation, and which remain unliquidated at the time the
Department implements its determination. Because entries covered by
completed reviews entered prior to the effective date, the Department
is prohibited from recalculating dumping margins for entries covered by
those reviews. This commentator argues the Department should clarify
that it will not recalculate dumping margins for completed reviews.
Department Position: The Department is adopting this Final
Modification for Reviews pursuant to section 123 of the URAA to put in
place for future reviews and certain pending reviews a methodology that
responds to the WTO findings of inconsistency. The Department finds
that comments addressing how the new methodology should apply to
specific ``as applied'' findings of inconsistency are beyond the scope
of this section 123 determination because section 129 determinations
are separate from section 123 determinations under the URAA. The
purpose of this Final Modification for Reviews is to address the broad
elements of the prior practice that was found to be WTO-inconsistent.
It is not intended to address how that practice was applied in the
specific proceedings that
[[Page 8113]]
were challenged. The Final Modification for Reviews makes clear that
the new WTO-consistent methodology will be applicable to any
determinations made pursuant to section 129 of the URAA in connection
with the relevant WTO disputes. Whether any particular section 129
proceeding will be requested by USTR is beyond the scope of this Final
Modification for Reviews. Accordingly, the Final Modification for
Reviews does not further specify the particular proceedings to which
the new methodology will apply.
With regard to the various arguments that suggest the new
methodology should apply prior to the announced effective date, such as
to entries subject to reviews that were completed or ongoing prior to
the effective date, for reasons fully set forth in the Effective Date
of Implementation section of this notice, the Department disagrees. The
WTO-consistent methodology adopted will be applied in all reviews that
are pending before the Department for which the preliminary results are
issued 60 days after the publication of the Final Modification for
Reviews.
Adopting a Final Modification for Reviews During the Negotiation of the
Doha Round
Some commentators suggest that the Department should delay this
Final Modification for Reviews until the United States resolves this
issue at the WTO through the Doha Development Agenda (Doha)
negotiations. These commentators question whether these implementation
efforts will weaken the U.S. negotiating position in the Doha Rules
negotiations. They suggest the Department should hold off until the
Doha negotiations are concluded, as this may obviate the need to
implement at all. Nonetheless, if the Department chooses to implement,
these commentators support U.S. efforts to seek correction, through the
Doha Rules negotiations, of the Appellate Body decisions, which they
view as ``extraordinarily flawed.''
Department Position: The Department disagrees with commentators
that it should wait until the Doha negotiations are concluded before
adopting the Final Modification for Reviews. The Department is
conducting this exercise pursuant to the procedures provided for in
section 123 of the URAA. This modification is necessary to implement
the DSB's rulings and recommendations in the four, previously
identified disputes--all of which necessarily dealt with the
interpretation and application of existing WTO rules. Notwithstanding
this Final Modification for Reviews, the Department will continue to
work closely and actively with USTR with a view towards clarifying that
the AD Agreement should not be read to require WTO Members to provide
offsets for non-dumped comparisons.
Application of the Final Modification for Reviews to Subject
Merchandise From Non-Member Countries
Two commentators representing interests or products from the
Russian Federation note that Russia is in the process of joining the
WTO, but is not yet a Member. These commentators argue that
notwithstanding Russia's non-Member status, the Department's new
methodology adopted in the Final Modification for Reviews should apply
equally to subject merchandise from Russia.
Department Position: As the Department has stated in its Final
Modification for Reviews, the revised methodology will apply in reviews
pending before the Department for which a preliminary results are
issued more than 60 days after the date of publication of the
Department's Final Rule and Final Modification for Reviews. This
includes reviews of antidumping orders without regard to whether the
subject merchandise is from a WTO Member.
Comments Unrelated to the Final Modification for Reviews
One commentator argues that the 2008 rescission of the targeted
dumping regulation violates the Administrative Procedures Act (``APA'')
because it was repealed without notice and comment. The commentator
requests that the targeted dumping regulation be restored in the final
rule. Another commentator suggests that the Department should take this
opportunity to address and clarify several aspects of the targeted
dumping methodology it claims are deficient.
A few commentators request that the Department clarify that the new
averaging groups will still be based on CONNUMs. One commentator points
out that in stating that ``an averaging group will consist of subject
merchandise that is identical or virtually identical in all physical
characteristics and that is sold to the US at the same level of
trade,'' the Department does not define the term ``identical or
virtually identical in all physical characteristics.'' Based on this,
the commenter argues, it is unclear whether the proposal refers to
merchandise that comprises individual CONNUMs. Other commentators note
that the Proposed Modification for Reviews does not state how the
Department will distinguish price averaging groups (e.g., by importer,
manufacturer, level of trade, sale type, or CONNUM). A few commentators
also seek clarification that the Department is not proposing to change
how it identifies merchandise for the purposes of model match
methodology.
Department Position: These comments are beyond the scope of this
action. The Department reiterates that the purpose of this exercise is
to bring the United States into conformity with its WTO obligations as
articulated in the dispute settlement reports cited above. The
Department has proposed no changes to these other aspects of its
dumping calculations, and thus finds these suggestions to be beyond the
scope of this section 123 proceeding. Parties are free to suggest that
the Department consider these comments in the context of a particular
proceeding, as appropriate.
Timetable
The Final Rule and Final Modification for Reviews will be effective
and applicable to all reviews pending before the Department for which
the preliminary results are issued after April 16, 2012. The Department
will further apply the Final Rule and Final Modification of Reviews to
all sunset reviews pending before the Department for which either the
preliminary results or expedited final results of sunset review are
issued after April 16, 2012. This methodology will be used in
implementing the findings of the WTO panels in US-Zeroing (EC), US-
Zeroing (Japan), US-Stainless Steel (Mexico), and US-Continued Zeroing
(EC), with respect to any antidumping duty proceedings conducted
pursuant to section 129 of the URAA. This methodology will also be
applicable to any reviews currently discontinued by the Department if
such reviews are continued after April 16, 2012 by reason of a final
and conclusive judgment of a U.S. Court.
Classification
Executive Order 12866
The Final Rule has been determined to be not significant for
purposes of Executive Order 12866.
Regulatory Flexibility Act
The Chief Counsel for Regulation has certified to the Chief Counsel
for Advocacy of the Small Business Administration (''SBA''), under the
provisions of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that
this action would not have a significant economic impact on a
substantial number of small entities. Parties for whom the
[[Page 8114]]
Department determines a weighted-average margin of dumping or
antidumping duty assessment rate include foreign exporters and
manufacturers, some of whom are affiliated with U.S. companies and U.S.
importers. Some of these entities affected by the rule may be
considered small entities under the SBA standard. The Department has
determined that this action will not have a substantial economic impact
on a significant number of small entities because the costs associated
with antidumping duty liability generally will not increase as a result
of the proposed rule. No comments were received regarding the economic
impact of this rule. As a result, a final regulatory flexibility
analysis is not required and one was not prepared.
Paperwork Reduction Act
This action does not contain a collection of information for
purposes of the Paperwork Reduction Act of 1980, as amended (44 U.S.C.
3501 et seq.).
List of Subjects in 19 CFR Part 351
Administrative practice and procedure, Antidumping, Business and
industry, Cheese, Confidential business information, Countervailing
duties, Freedom of information, Investigations, Reporting and
recordkeeping requirements.
Dated: February 7, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.
For the reasons stated, 19 CFR part 351 is amended as follows:
PART 351--ANTIDUMPING AND COUNTERVAILING DUTIES
0
1. The authority citation for 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.
Subpart B--Antidumping and Countervailing Duty Procedures
0
2. Section 351.414 is revised to read as follows:
Sec. 351.414 Comparison of normal value with export price
(constructed export price).
(a) Introduction. This section explains when and how the Secretary
will average prices in making comparisons of export price or
constructed export price with normal value. (See section 777A(d) of the
Act.)
(b) Description of methods of comparison--(1) Average-to-average
method. The ``average-to-average'' method involves a comparison of the
weighted average of the normal values with the weighted average of the
export prices (and constructed export prices) for comparable
merchandise.
(2) Transaction-to-transaction method. The ``transaction-to-
transaction'' method involves a comparison of the normal values of
individual transactions with the export prices (or constructed export
prices) of individual transactions for comparable merchandise.
(3) Average-to-transaction method. The ``average-to-transaction''
method involves a comparison of the weighted average of the normal
values to the export prices (or constructed export prices) of
individual transactions for comparable merchandise.
(c) Choice of method. (1) In an investigation or review, the
Secretary will use the average-to-average method unless the Secretary
determines another method is appropriate in a particular case.
(2) The Secretary will use the transaction-to-transaction method
only in unusual situations, such as when there are very few sales of
subject merchandise and the merchandise sold in each market is
identical or very similar or is custom-made.
(d) Application of the average-to-average method--(1) In general.
In applying the average-to-average method, the Secretary will identify
those sales of the subject merchandise to the United States that are
comparable, and will include such sales in an ``averaging group.'' The
Secretary will calculate a weighted average of the export prices and
the constructed export prices of the sales included in the averaging
group, and will compare this weighted average to the weighted average
of the normal values of such sales.
(2) Identification of the averaging group. An averaging group will
consist of subject merchandise that is identical or virtually identical
in all physical characteristics and that is sold to the United States
at the same level of trade. In identifying sales to be included in an
averaging group, the Secretary also will take into account, where
appropriate, the region of the United States in which the merchandise
is sold, and such other factors as the Secretary considers relevant.
(3) Time period over which weighted average is calculated. When
applying the average-to-average method in an investigation, the
Secretary normally will calculate weighted averages for the entire
period of investigation. However, when normal values, export prices, or
constructed export prices differ significantly over the course of the
period of investigation, the Secretary may calculate weighted averages
for such shorter period as the Secretary deems appropriate. When
applying the average-to-average method in a review, the Secretary
normally will calculate weighted averages on a monthly basis and
compare the weighted-average monthly export price or constructed export
price to the weighted-average normal value for the contemporaneous
month.
(e) Application of the average-to-transaction method--In applying
the average-to-transaction method in a review, when normal value is
based on the weighted average of sales of the foreign like product, the
Secretary will limit the averaging of such prices to sales incurred
during the contemporaneous month.
(f) Contemporaneous Month. Normally, the Secretary will select as
the contemporaneous month the first of the following months which
applies:
(1) The month during which the particular U.S. sales under
consideration were made;
(2) If there are no sales of the foreign like product during this
month, the most recent of the three months prior to the month of the
U.S. sales in which there was a sale of the foreign like product.
(3) If there are no sales of the foreign like product during any of
these months, the earlier of the two months following the month of the
U.S. sales in which there was a sale of the foreign like product.
[FR Doc. 2012-3290 Filed 2-13-12; 8:45 am]
BILLING CODE 3510-DS-P
