Final Results of Expedited Sunset Reviews: Certain Iron Construction Castings From Brazil, Canada and The People's Republic of China

Summary

On November 2, 1998, the U.S. Department of Commerce (``the Department'') initiated a sunset review of the antidumping duty orders on certain iron construction castings from Brazil, Canada and the People's Republic of China (``the PRC'') (63 FR 58709) pursuant to section 751(c) of the Tariff Act of 1930, as amended (``the Act''). On the bases of notices of intent to participate and substantive responses filed on behalf of the domestic industry, and inadequate responses (in these cases, no responses) from respondent interested parties, the Department determined to conduct an expedited review. As a result of these reviews, the Department finds that revocation of the antidumping orders would be likely to lead to continuation or recurrence of dumping at the levels indicated in the Final Results of Review section of this notice.

Full text

SUMMARY: On November 2, 1998, the U.S. Department of Commerce (``the 
Department'') initiated a sunset review of the antidumping duty orders 
on certain iron construction castings from Brazil, Canada and the 
People's Republic of China (``the PRC'') (63 FR 58709) pursuant to 
section 751(c) of the Tariff Act of 1930, as amended (``the Act''). On 
the bases of notices of intent to participate and substantive responses 
filed on behalf of the domestic industry, and inadequate responses (in 
these cases, no responses) from respondent interested parties, the 
Department determined to conduct an expedited review. As a result of 
these reviews, the Department finds that revocation of the antidumping 
orders would be likely to lead to continuation or recurrence of dumping 
at the levels indicated in the Final Results of Review section of this 
notice.

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

EFFECTIVE DATE: June 7, 1999.

Statute and Regulations

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

Scope

    Brazil--merchandise covered by the order on Brazil consists of 
certain iron construction castings. Heavy castings are limited to 
manhole covers, rings, and frames, catch basins, grates and frames, 
cleanout covers and frames used for drainage or access purposes for 
public utility, water and sanitary systems. Light castings are limited 
to valve, service, and meter boxes which are placed below ground to 
encase water, gas, or other valves, or water or gas meters. These 
articles must be of cast iron, not alloyed, and not malleable. 
``Heavy'' castings are classifiable under Harmonized Tariff Schedule 
(``HTS'') item number 7325.10.0010, and ``light'' castings are 
classified under HTS item number 7325.10.0050. On April 28, 1995, the 
Department determined, in response to a request from Southland 
Marketing, Inc., that the Polycast 700 Series frame, part number 
DG0700, and grate, part number DG0641, are not within the scope of the 
antidumping duty order on iron construction castings from Brazil (see 
Notice of Scope Rulings, 60 FR 36782, (July 18, 1995).
    Canada--merchandise covered by the order on Canada consists of 
certain iron construction castings. Heavy castings are limited to 
manhole covers, rings, and frames, catch basins, grates and frames, 
cleanout covers and frames used for drainage or access purposes for 
public utility, water and sanitary systems. ``Heavy'' castings are 
classifiable under Harmonized Tariff Schedule (``HTS'') item number 
7325.10.0010. These articles must be of cast iron, not alloyed, and not 
malleable. On September 23, 1998, the Department issued the final 
results of a changed circumstance review, in which the Department 
revoked the order with respect to ``light'' castings.1
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    \1\ See Iron Construction Castings From Canada: Notice of Final 
Results of Changed Circumstances Antidumping Duty Administrative 
Review, and Revocation in Part of Antidumping Duty Order: 
Correction, 63 FR 50881 (September 23, 1998).
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    PRC--merchandise covered by the order on the PRC consists of 
certain iron construction castings. Heavy castings are limited to 
manhole covers, rings, and frames, catch basins, grates and frames, 
cleanout covers and frames used for drainage or access purposes for 
public utility, water and sanitary systems. Light castings are limited 
to valve, service, and meter boxes which are placed below ground to 
encase water, gas, or other valves, or water or gas meters. These 
articles must be of cast iron, not alloyed, and not malleable. 
``Heavy'' castings are classifiable under Harmonized Tariff Schedule 
(``HTS'') item number 7325.10.0010, and ``light'' castings are 
classified under HTS item number 7325.10.0050. In response to a request 
from Jack's International Trading Associates, Ltd., on August 28, 1995, 
the Department determined that certain cast iron, floor area drains are 
outside the scope of the order. See Notice of Scope Rulings, 60 FR 
54213 (October 20, 1995). Further, in response to a request from The 
Metraflex Company, on August 13, 1997, the Department determined that 
``Y'' pipe strainers are outside the scope of the of the order (see 
Notice of Scope Rulings, 62 FR 62288 (November 21, 1997)).
    The HTS item numbers are provided for convenience and Customs 
purposes. The written product description remains dispositive.
    These reviews cover all manufacturers and exporters of certain iron 
construction castings from Brazil, Canada and the PRC.

Background

    On November 2, 1998, the Department initiated sunset reviews of the 
antidumping orders on certain iron construction castings from Brazil, 
Canada and the PRC (63 FR 58709) pursuant to section 751(c) of the Act. 
On November 17, 1998, we received Notices of Intent to Participate on 
behalf of the Municipal Castings Fair Trade Council (``MCFTC'') and its 
individual members 2 (collectively, the ``domestic 
parties''), within the deadline specified in section 351.218(d)(1)(i) 
of the Sunset Regulations. We received complete substantive responses 
on behalf of the domestic parties on December 2, 1998, within the 30-
day deadline specified in section 351.218(d)(3)(i) of the Sunset 
Regulations. The individual members of the MCFTC claimed interested 
party status pursuant to section 771(9)(C) of the Act, as U.S. domestic 
producers of certain iron construction castings. MCFTC claimed 
interested party status as a trade association representing the 
domestic industry pursuant to section 771(9)(E) of the Act.
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    \2\ The MCFTC is comprised of Allegheny Foundry Company, Bingham 
& Taylor, Deeter Foundry Inc., East Jordan Iron Works, Inc., LeBaron 
Foundry, Inc., Municipal Castings, Inc., Neenah Foundry Company, 
Tyler Pipe, and U.S. Foundry & Manufacturing Co. Bingham & Taylor 
and Tyler Pipe are manufacturers only of so-called ``light 
castings'' and, thus, are not interested parties in the review of 
the Canada order which covers only ``heavy castings.''

--------------------------------------------------------------------------- We did not receive a substantive response from any respondent 
interested party in any of these reviews. Therefore, pursuant to 
section 19 C.F.R Sec. 351.218(e)(1)(ii)(C) of the Sunset Regulations, 
we determined to conduct expedited sunset reviews of these orders.
    The Department determined that the sunset reviews of the 
antidumping duty orders on certain iron construction castings from 
Brazil, Canada, and the PRC are extraordinarily complicated. In 
accordance with section 751(c)(5)(C)(v) of the Act, the Department may 
treat a review as extraordinarily complicated if it is a review of a 
transition order (i.e., an order in effect on January 1, 1995). See 
section 751(c)(6)(C) of the Act. Therefore, on March 2, 1999, the 
Department extended the time limit for completion of the final results 
of these reviews until not later than June 1, 1999, in accordance with 
section 751(c)(5)(B) of the Act.3
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    \3\ See Iron Construction Castings From Canada, Brazil and the 
People's Republic of China: Extension of Time Limit for Final 
Results of Five-Year Review, 64 FR 10985 (March 8, 1999).
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Determination

    In accordance with section 751(c)(1) of the Act, the Department 
conducted these reviews to determine whether revocation of the 
antidumping orders would be likely to lead to continuation or 
recurrence of dumping. Section 752(c)(1) of the Act provides that, in 
making this determination, the Department shall consider the weighted-
average dumping margins determined in the investigation and subsequent 
reviews and the volume of imports of the subject merchandise for the 
period before and the period after the issuance of the antidumping 
order. Pursuant to section 752(c)(3) of the Act, the Department shall 
provide to the International Trade Commission (``the Commission'') the 
magnitude of the margin of dumping likely to prevail if the orders are 
revoked.
    The Department's determinations concerning continuation or 
recurrence of dumping and magnitude of the margin are discussed below. 
In addition, the domestic parties' comments with respect to the 
continuation or recurrence of dumping and the magnitude of the margin 
are addressed within the respective sections below.

Continuation or Recurrence of Dumping

    Drawing on the guidance provided in the legislative history 
accompanying the Uruguay Round Agreements Act (``URAA''), specifically 
the Statement of Administrative Action (``the SAA''), H.R. Doc. No. 
103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1 
(1994), and the Senate Report, S. Rep. No. 103-412 (1994), the 
Department issued its Sunset Policy Bulletin providing guidance on 
methodological and analytical issues, including the basis for 
likelihood determinations. In its Sunset Policy Bulletin, the 
Department indicated that determinations of likelihood will be made on 
an order-wide basis (see section II.A.2. of the Sunset Policy 
Bulletin). Furthermore, the Department indicated that normally it will 
determine that revocation of an antidumping order is likely to lead to 
continuation or recurrence of dumping when (a) dumping continued at any 
level above de minimis after the issuance of the order, (b) imports of 
the subject merchandise ceased after the issuance of the order, or (c) 
dumping was eliminated after the issuance of the order and import 
volumes for the subject merchandise declined significantly (see section 
II.A.3. of the Sunset Policy Bulletin).
    In addition to considering the guidance on likelihood 
determinations cited above, section 751(c)(4)(B) of the Act provides 
that the Department shall determine that revocation of an order is 
likely to lead to continuation or recurrence of dumping when a 
respondent interested party waives its participation in the sunset 
review. In these reviews, the Department did not receive a response 
from any respondent interested party. Pursuant to section 
351.218(d)(2)(iii) of the Sunset Regulations, this constitutes a waiver 
of participation.
    The Department issued antidumping duty orders on certain iron 
construction castings from Brazil,4 Canada,5 and 
the PRC 6 in 1986. Since that time the Department has 
conducted several administrative reviews of each of these 
orders.7 The antidumping duty orders remain in effect for 
all producers/exporters of certain iron construction castings from 
Brazil, Canada and the PRC.
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    \4\ See Antidumping Duty Order; Iron Construction Castings From 
Brazil, 51 FR 17200 (May 9, 1986).
    \5\ See Antidumping Duty Order; Iron Construction Castings From 
Canada, 51 FR 7600 (March 5, 1986) and Iron Construction Castings 
From Canada; Amendment to Final Determination of Sales at Less Than 
Fair Value and Amendment to Antidumping Duty Order, 51 FR 34110 
(September 25, 1986).
    \6\ See Antidumping Duty Order; Iron Construction Castings From 
the People's Republic of China (the PRC), 51 FR 17222 (May 9, 1986).
    \7\ See Certain Iron Construction Castings from Brazil; Final 
Determination of Sales at Less Than Fair Value, 51 FR 9477, (March 
19, 1986); Certain Iron Construction Castings from Brazil; Final 
Results of Antidumping Duty Administrative Review, 55 FR 26238, 
(June 27, 1990) corrected, 55 FR 41262 (October 10, 1990) and 
Certain Iron Construction Castings from Brazil; Final Results of 
Antidumping Duty Administrative Review, 55 FR 43019 (October 25, 
1990). See Certain Iron Construction Castings from Canada: Final 
Determination of Sales at Less Than Fair Value, 51 FR 2412 (January 
16, 1986); Certain Iron Construction Castings from Canada: Amendment 
to Final Determination of Sales at Less Than Fair Value and 
Amendment to Antidumping Duty Order, 51 FR 34110 (September 25, 
1986); Certain Iron Construction Castings from Canada; Final Results 
of Antidumping Duty Administrative Review; 55 FR 460 (January 5, 
1990); Certain Iron Construction Castings from Canada; Final Results 
of Antidumping Duty Administrative Review, 56 FR 23274 (May 21, 
1991); Certain Iron Construction Castings from Canada; Final Results 
of Antidumping Administrative Review, 59 FR 25603 (May 17, 1994); 
Certain Iron Construction Castings from Canada; Final Results of 
Antidumping Administrative Review, 60 FR 9009 (February 16, 1995); 
Certain Iron Construction Castings from Canada; Intent to revoke 
antidumping duty order, 62 FR 9735 (March 4, 1997), Certain Iron 
Construction Castings from Canada; Determination Not to Revoke 
Antidumping Duty Order, 62 FR 23432 (April 30, 1997); Certain Iron 
Construction Castings from Canada; Notice of Rescission of 
Antidumping Duty Administrative Review, 63 FR 45797 (August 27, 
1998); Certain Iron Construction Castings from Canada: Notice of 
Sales at Less Than Fair Value, 51 FR 9483 (March 19, 1986). See 
Certain Iron Construction Castings from the People's Republic of 
China, 56 FR 2742 (January 24, 1991). See Certain Iron Construction 
Castings from The People's Republic of China, Final Results of 
Antidumping Duty Administrative Review, 57 FR 10644 (March 27, 1992; 
and Certain Iron Construction Castings from The People's Republic of 
China: Final Results of Antidumping Duty Administrative Review, 60 
FR 51454 (October 2, 1995).
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    In their substantive responses, the domestic parties argue that the 
respondents have reduced their sales to the United States dramatically 
and, thus, if the orders were revoked, it is likely that dumping would 
continue because the evidence demonstrates that the foreign producers/
exporters need to dump to sell in any significant quantities in the 
United States. Specifically, the domestic parties argue that volume and 
value data on imports of heavy castings demonstrates that once the 
orders were imposed, imports began to decline. The domestic parties 
note that imports of heavy castings from Brazil fell from over 10 
million pounds in 1986 to just over 5 million pounds in 1987, the first 
full year after the order, and dropped each year thereafter until 
reaching zero in 1991 and 1992. Although imports subsequently resumed, 
they have not gone over 294,000 pounds in any year. The domestic 
parties note that imports from Canada followed a similar, albeit less 
dramatic pattern, dropping from a pre-order high of over 20 million 
pounds, down to just over six million pounds in 1992. The domestic 
parties state that, although imports have since increased, they have 
not reached their pre-order level. With respect to imports of heavy 
castings from the PRC, the domestic parties state that imports did not decrease immediately after the 
issuance of the order. The domestic parties argue that this is 
presumably because the 11.66 percent rate from the original 
investigation was an insufficient deterrent to importers. The 
statistics provided by the domestic parties demonstrate that imports of 
heavy castings from the PRC increased each year through 1989, and did 
not begin to decrease significantly until 1991. The domestic parties 
point out that the higher margins from the final results of the 87-88 
and 88-89 administrative reviews were issued in January 1991.
    With respect to imports of light castings, the domestic parties 
state that because light castings enter the United States under a so-
called ``basket'' category, they do not have firm data on import for 
this merchandise. They assert, however, based on day-to-day observation 
of conditions of competition in the marketplace, that imports have 
dwindled and there is little evidence of either Brazilian or Chinese 
import offerings of these items and a much-reduced presence of imports 
from Canada.
    With respect to whether dumping continued at any levels above de 
minimis after the issuance of these orders, the domestic parties note 
that dumping margins above de minimis were found in the original 
investigations and in each subsequent administrative review conducted 
by the Department.
    Citing to the SAA, the domestic parties argue that the declining 
import volumes from all three countries, in addition to reflecting the 
existence of dumping margins after the orders went into effect, is 
highly probative of the likelihood of continuation or recurrence of 
dumping if these orders were revoked. The domestic parties conclude 
that the Department should assume that exporters of the subject 
castings from Brazil, Canada and the PRC cannot sell their goods in the 
U.S. market without dumping and, therefore, they would have to continue 
or resume dumping if they want to reenter the U.S. market at any 
reasonable commercial volumes.
    As discussed in section II.A.3. of the Sunset Policy Bulletin, the 
SAA at 890, and the House Report at 63-64, ``[E]xistence of dumping 
margins after the order, or cessation of imports after the order, is 
highly probative of the likelihood of continuation or recurrence of 
dumping. If companies continue to dump with the discipline of an order 
in place, it is reasonable to assume that dumping would continue if the 
discipline were removed.'' As the domestic parties noted, dumping 
margins above de minimis were found to exist in each of the 
administrative reviews conducted by the Department of these orders. 
Further, deposit rates above de minimis continue in effect for imports 
of castings from Brazil, Canada, and the PRC. Therefore, given that 
dumping margins above de minimis were found to exist and continue in 
effect, respondent interested parties waived their right to participate 
in these reviews, and absent argument and evidence to the contrary, the 
Department determines that dumping is likely to continue if the orders 
were revoked.

Magnitude of the Margin

    In the Sunset Policy Bulletin, the Department stated that it will 
normally provide to the Commission the margin that was determined in 
the final determination in the original investigation. Further, for 
companies not specifically investigated, or for companies that did not 
begin shipping until after the order was issued, the Department 
normally will provide a margin based on the ``all others'' rate from 
the investigation. (See section II.B.1 of the Sunset Policy Bulletin.) 
Exceptions to this policy permit the use of a more recently calculated 
margin, when appropriate, and consideration of duty absorption 
determinations. (See sections II.B.2 and 3 of the Sunset Policy 
Bulletin.)
    With respect to the magnitude of the margin likely to prevail if 
the antidumping duty orders were revoked, the domestic parties argue 
that application of the principles set forth in the SAA and the Sunset 
Policy Bulletin support the conclusion that the Department should rely 
on the margins from the original investigations on Brazil and Canada. 
The domestic parties suggest that with respect to the PRC, the 
Department should select a more recently calculated margin consistent 
with section II.B.2. of the Sunset Policy Bulletin. The domestic 
parties base this assertion on the fact that, as a result of final 
results of administrative reviews issued in 1991, the antidumping duty 
rates increased to almost 25 percent and 46 percent. Further, it was in 
1991 that imports from the PRC began to decrease. In conclusion, the 
domestic parties state that the rate of 24.21 percent may be most 
appropriate to provide to the Commission, as that is the rate likely to 
be closest to the rate that ultimately may be applied to castings from 
the PRC at the conclusion of the pending litigation concerning the 
1998-89 and 1989-90 review periods.
    The Department agrees with the domestic parties as to the magnitude 
of the margin likely to prevail were the orders on Brazil and Canada 
revoked. An examination of the margin history of the orders as well as 
an examination of the import statistics provided by the domestic 
parties confirms that dumping continued after the issuance of the 
orders and imports of the subject merchandise continue. Therefore, in 
accordance with the Sunset Policy Bulletin and absent an argument that 
a more recently calculated margin is more indicative of the margin 
likely to prevail if the orders on Brazil and Canada were revoked, we 
determine that the margins calculated in the Department's original 
investigation are probative of the behavior of Brazilian and Canadian 
producers and exporters of certain iron construction castings.
    We agree with the domestic parties with regard to the use of a more 
recently calculated rate with respect to the PRC. According to the 
Sunset Policy Bulletin, ``a company may choose to increase dumping in 
order to maintain or increase market share. As a result, increasing 
margins may be more representative of a company's behavior in the 
absence of an order'' (see section II.B.2 of the Sunset Policy 
Bulletin). In addition, the Sunset Policy Bulletin notes that the 
Department will normally consider market share; however, absent 
information on relative market share, and absent argument or evidence 
to the contrary, we have relied on import volumes in the review on 
certain iron construction castings from the PRC. The import statistics 
related to imports of heavy castings provided by the domestic parties 
demonstrate that imports (on a volume basis) from the PRC increased 
every year between 1986 and 1989. The import level in 1990 decreased 
slightly from imports in 1989. After the issuance in January 1991, of 
the final results of reviews covering May 1, 1987 through April 30, 
1988 and May 1, 1988 through April 30, 1989, imports from the PRC 
declined precipitously. During the periods when imports were 
increasing, the Department found increasing dumping margins (24.21% in 
1987, 45.92% in 1988, and 92.74% in 1989). In light of the correlation 
between the increase in imports and the increase in the dumping margin, 
the Department finds that a more recently calculated rate is the most 
probative of the behavior of Chinese producers/exporters of certain 
iron construction castings. Because imports continued to increase 
through calendar year 1989, and there was only a minor decrease in 
imports in the following year, we determine that the dumping margin 
applicable to the review of imports during the period May 1, 1989 
through April 30, 1990, is probative of the behavior of Chinese producers and exporters of 
castings absent the discipline of the order.
    Pursuant to Section 752(c) of the Act, the Department will report 
to the Commission the company-specific and ``all others'' rates at the 
levels indicated in the Final Results of Review section of this notice.

Final Results of Review

    As a result of these reviews, the Department finds that revocation 
of the antidumping order would be likely to lead to continuation or 
recurrence of dumping at the margins listed below:

------------------------------------------------------------------------
                                                              Margin
                 Manufacturers/exporters                     (percent)
------------------------------------------------------------------------
Brazil:
    Fundicao Aldebara, Ltda. (ALDEBARA).................           58.74
    Sociedade de Metalurgia E Processos, Ltda. (SOMEP)..           16.61
    Companhia Siderurgica da Guanabara (COSIGUA)                    5.95
     formerly Usina Siderurgica Paraense, S.A. (USIPA)..
    All others..........................................           26.16
Canada:
    Bibby Ste. Croix Foundries, Inc.....................            8.60
    LaPerle Foundry, Ltd................................            4.40
    Mueller Canada, Inc.................................            9.80
    All Others..........................................            7.50
China:
    All manufacturers/exporters.........................           92.74
------------------------------------------------------------------------

    This notice serves as the only reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305 of the Department's regulations. 
Timely notification of return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of an APO is a sanctionable 
violation.
    This five-year (``sunset'') review and notice are published in 
accordance with sections 751(c) and 777(i)(1) of the Act.

    Dated: June 1, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-14338 Filed 6-4-99; 8:45 am]
BILLING CODE 3510-DS-P  

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