62 FR 27295-27424, May 19, 1997 

DEPARTMENT OF COMMERCE

International Trade Administration

19 CFR Parts 351, 353, and 355

[Docket No. 950306068-6361-04]
RIN 0625-AA45

 
Antidumping Duties; Countervailing Duties

AGENCY: International Trade Administration, Commerce.

ACTION: Final rule.

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SUMMARY: The Department of Commerce (``the Department'') hereby revises 
its regulations on antidumping and countervailing duty proceedings to 
conform the Department's existing regulations to the Uruguay Round 
Agreements Act, which implemented the results of the Uruguay Round 
multilateral trade negotiations. In addition to conforming changes, in 
these regulations the Department has sought to: where appropriate and 
feasible, translate the principles of the implementing legislation into 
specific and predictable rules, thereby facilitating the administration 
of these laws and providing greater predictability for private parties 
affected by these laws; simplify and streamline the Department's 
administration of antidumping and countervailing duty proceedings in a 
manner consistent with the purpose of the statute and the President's 
regulatory principles; and codify certain administrative practices 
determined to be appropriate under the new statute and under the 
President's Regulatory Reform Initiative.

DATES: The effective date of this final rule is June 18, 1997. See 
Sec. 351.701 for applicability dates.

FOR FURTHER INFORMATION CONTACT: Michael Rill (202) 482-3058. For 
information concerning matters relating to the scope of orders or 
changed circumstances reviews, contact the Office of Policy (202) 482-
4412.

SUPPLEMENTARY INFORMATION:

Background

    The publication of this notice of final rules completes a 
significant portion of the process of developing regulations under the 
Uruguay Round Agreements Act (``URAA''). This process began when the 
Department took the unusual step of requesting advance public comments 
in order to ensure that, at the earliest possible stage, we could 
consider and take into account the views of the private sector entities 
that are affected by the antidumping (``AD'') and countervailing duty 
(``CVD'') laws. On February 27, 1996, the Department published proposed 
rules dealing with AD and CVD procedures and AD methodology (``AD 
Proposed Regulations''). The Department received over five hundred 
written public comments regarding the AD Proposed Regulations. On June 
7, 1996, the Department held a public hearing, and, thereafter, 
received over one hundred additional post-hearing written public 
comments on the AD Proposed Regulations.{1}
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    {1} The prior notices published by the Department as part of its 
URAA rulemaking activity are: (1) Advance Notice of Proposed 
Rulemaking and Request for Public Comments (Antidumping Duties; 
Countervailing Duties; Article 1904 of the North American Free Trade 
Agreement), 60 FR 80 (Jan. 3, 1995); (2) Advance Notice of Proposed 
Rulemaking: Extension of Comment Period (Antidumping Duties; 
Countervailing Duties; Article 1904 of the North American Free Trade 
Agreement), 60 FR 9802 (Feb. 22, 1995); (3) Interim Regulations; 
Request for Comments (Antidumping and Countervailing Duties), 60 FR 
25130 (May 11, 1995); (4) Proposed Rule; Request for Comments 
(Antidumping and Countervailing Duty Proceedings; Administrative 
Protective Order Procedures; Procedures for Imposing Sanctions for 
Violation of a Protective Order), 61 FR 4826 (Feb. 8, 1996); (5) 
Notice of Proposed Rulemaking and Request for Public Comments 
(Antidumping Duties; Countervailing Duties), 61 FR 7308 (Feb. 27, 
1996); (6) Extension of Deadline to File Public Comments on Proposed 
Antidumping and Countervailing Duty Regulations and Announcement of 
Public Hearing (Antidumping Duties; Countervailing Duties), 61 FR 
18122 (April 24, 1996); (7) Announcement of Opportunity to File 
Public Comments on the Public Hearing of Proposed Antidumping and 
Countervailing Duty Regulations (Antidumping Duties; Countervailing 
Duties), 61 FR 28821 (June 6, 1996); (8) Notice of Proposed 
Rulemaking and Request for Public Comments (Countervailing Duties), 
62 FR 8818 (Feb. 26, 1997); and (9) Extension of Deadline to File 
Public Comments on Proposed Countervailing Duty Regulations 
(Countervailing Duties), 62 FR 19719 (April 23, 1997).
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    In drafting these final rules, the Department has carefully 
reviewed and considered each of the hundreds of comments it received. 
While we have not always adopted suggestions made by commenters, we 
found the comments to be extremely useful in helping us to work our way 
through the legal and policy thickets created by the massive rewriting 
of our operating statute. Therefore, we are extremely grateful to those 
who took the time and trouble to express their views regarding how the 
Department should administer the AD and CVD laws in the future.
    In addition, in these final rules, the Department has continued to 
be guided by the objectives described in the AD Proposed Regulations. 
Specifically, these objectives are: (1) Conformity with the statutory 
amendments made by the URAA; (2) the elaboration through regulation of 
certain statements contained in the Statement of Administrative Action 
(``SAA''); {2} and (3) consistency with President Clinton's 
Regulatory Reform Initiative and his directive to identify and 
eliminate obsolete and burdensome regulations.
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    {2} Statement of Administrative Action Accompanying H.R. 5110, 
H.R. Doc. No. 316, Vol. 1, 103d Cong., 2d Sess. (1994).
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Explanation of the Final Rules

General Background

Consolidation of Antidumping and Countervailing Duty Regulations
    As described in the AD Proposed Regulations, in response to the 
President's Regulatory Reform Initiative and to reduce the amount of 
duplicative material in the regulations, the Department proposed to 
consolidate the AD and CVD regulations into a new part 351, and to 
remove parts 353 and 355. The Department did not receive any comments 
concerning the consolidation of the regulations, and, upon further 
review, we believe that the consolidation reduces duplication and makes 
the AD/CVD regulations easier to use. Accordingly, we are promulgating 
a single part 351, and are removing parts 353 and 355.
    The structure of part 351 is as follows. Subpart A (Scope and 
Definitions) is based on former subpart A of parts 353 and 355. Among 
other things, the regulations contained in subpart A deal with general 
definitions applicable to AD/CVD proceedings, the record for such 
proceedings, de minimis standards for countervailable subsidies and 
dumping margins, and the rates to be applied in the case of 
nonproducing exporters or AD proceedings involving nonmarket economy 
countries.
    Subpart B (Antidumping and Countervailing Duty Procedures) is based 
on former subpart B of parts 353 and 355. As indicated by the title, 
subpart B deals with procedural aspects of AD and CVD proceedings. 
Where the procedures for AD and CVD proceedings are different, the 
regulations in subpart B so specify.
    Subpart C (Information and Argument) is based on former subpart C 
of parts 353 and 355. Subpart C establishes rules for AD/CVD 
proceedings regarding such matters as the submission of information, 
the treatment of business proprietary information, the verification of 
information, and determinations based on the facts available. Certain 
portions of subpart C dealing with the treatment of business 
proprietary information and administrative protective order procedures 
were the subject of a separate notice of proposed rulemaking


---- page 27297 ----


and request for public comments on February 8, 1996. 61 FR 4826. A 
separate notice of final regulations will be published for these 
portions of subpart C.
    Subpart D (Calculation of Export Price, Constructed Export Price, 
Fair Value, and Normal Value) is based on former subpart D of part 353. 
Subpart D deals with methodologies for identifying and measuring 
dumping.
    Subpart E is designated ``[Reserved].'' Proposed rules to be 
included in subpart E were published in a separate notice of proposed 
rulemaking and request for public comments on February 26, 1997. 62 FR 
8818. The Department will publish a separate notice of final 
regulations after reviewing and considering public comments submitted 
in connection with proposed subpart E.
    Subpart F (Cheese Subject to In-Quota Rate of Duty) is based on 
subpart D of former part 355, and implements section 702 of the Trade 
Agreements Act of 1979, as amended by the URAA.
Comments on Overall Drafting Approach
    The Department received a few comments regarding the overall 
drafting approach used in the AD Proposed Regulations. One commenter 
complimented the Department on its use of introductory paragraphs 
before each regulation, but noted that in several instances the 
language of the introductory paragraph did not accurately reflect the 
content of the regulation itself. In addition, this same commenter 
noted that in several instances, the Department's use of the citation 
signal ``See'' to a particular statutory provision was ambiguous. We 
have taken this commenter's suggestions to heart, and in drafting these 
final regulations we have reviewed the introductory paragraphs and our 
citation signals in order to improve the clarity and precision of these 
regulations.
    A different commenter noted that in the AD Proposed Regulations, 
when the Department referred to a particular section of the statute, it 
referenced only the Tariff Act of 1930 (the ``Act'') itself, not the 
section of the U.S. Code where the section is codified. This commenter 
suggested that to make the regulations more ``user friendly,'' the 
Department should refer to the relevant U.S. Code section of the Act or 
to both the U.S. Code and the Act.
    While we appreciate the spirit in which this suggestion was made, 
we have not adopted it in drafting these final regulations. For years, 
the Department generally has referenced sections of the Act in its 
regulations, and we are not aware of any objections having been raised 
regarding this drafting practice (other than the instant comment). The 
absence of objections to this practice, as well as the absence of any 
other comments endorsing the use of U.S. Code citations, suggests to us 
that those who use these laws are comfortable with our practice of 
referencing sections of the Act. As for the suggestion that we 
reference both the Act and U.S. Code sections, given the numerous 
statutory references in these final regulations, the adoption of this 
suggestion would add considerably to the overall length of the 
regulations without, in our view, contributing significantly to their 
ease of use.
Explanation of Particular Provisions
    In drafting these final regulations, the Department carefully 
considered each of the comments received. In addition, we conducted our 
own independent review of those provisions of the AD Proposed 
Regulations that were not the subject of public comments. The following 
sections contain a summary of the comments we received and the 
Department's responses to those comments. In addition, these sections 
contain an explanation of any changes the Department has made to the AD 
Proposed Regulations either in response to comments or on its own 
initiative. The following sections do not contain a discussion of those 
provisions that remain unchanged from the AD Proposed Regulations and 
that were not the subject of any public comments.

Subpart A--Scope and Definitions

    Subpart A of part 351 sets forth the scope of part 351, 
definitions, and other general matters applicable to AD/CVD 
proceedings.

Section 351.102

    Section 351.102 sets forth definitions of terms that are used 
throughout part 351. With respect to most of the definitions contained 
in Sec. 351.102, we received no comments. Definitions that we have 
added or revised, or on which we received comments, are discussed 
below.
    We received one general comment suggesting that we number each of 
the definitions contained in Sec. 351.102(b) as a separate numbered 
paragraph. According to the commenter, the absence of subparagraph 
numbering will make shorthand references to a particular definition 
impossible and will render definitions difficult to locate.
    We have not adopted this suggestion, because we have followed the 
guidelines set forth in the Document Drafting Handbook 1991 ed. (Office 
of the Federal Register), which states, at page 21, that ``paragraph 
designations are not required for the terms being defined, if the terms 
are listed in alphabetical order,'' as is the case with respect to 
Sec. 351.102(b). Because the definitions in Sec. 102(b) are listed in 
alphabetical order, we do not believe that it will be difficult to 
locate a particular definition. In addition, we do not believe that the 
format we have used precludes shorthand references.
    Affiliated persons; affiliated parties: Many commenters claimed 
that because the statute and the SAA do not provide sufficient guidance 
as to when the Department will consider an affiliation to exist by 
virtue of ``control,'' the Department should provide clearer guidance 
in the regulations. In this regard, we received a number of specific 
suggestions relating to the issue of ``control,'' many of which had 
been submitted previously.
    As a general observation, the Department appreciates the desire for 
additional detail regarding the concept of affiliation. To the extent 
possible, we have attempted to provide additional guidance in this 
explanatory material. However, we continue to believe that it would be 
premature to codify much guidance in the form of a regulation. As 
explained in the AD Proposed Regulations, 61 FR at 7310, we believe 
that it is more appropriate to develop our practice regarding 
affiliation through the adjudication of actual cases.
    Turning to specific suggestions, several commenters suggested that 
the definition should state that in order for control to exist within 
the meaning of section 771(33) of the Act, a relationship must affect 
the subject merchandise or foreign like product. These commenters 
argued that the purpose of such a requirement would be to winnow out 
those relationships that, while unquestionably close enough to 
constitute control in the abstract, do not affect the production or 
sale of the product that the Department is examining. According to 
these commenters, this approach is in line with the statement in the AD 
Proposed Regulations, 61 FR at 7310, that the Department would look at 
the ability to impact production, pricing, or cost, an analysis which, 
they claimed, must be directed at the product under investigation or 
review.
    In general we agree with the suggestion that we focus on 
relationships that have the potential to impact decisions concerning 
production, pricing or cost. This does not mean however, that proof is 
required that a relationship in fact has


---- page 27298 ----


had such an impact. In this regard, section 771(33), which refers to a 
person being ``in a position to exercise restraint or direction,'' 
properly focuses the Department on the ability to exercise ``control'' 
rather than the actuality of control over specific decisions. 
Therefore, we will consider the full range of criteria identified in 
the SAA, at 838, in determining whether ``control'' exists. Moreover, 
we do not believe that we should ignore situations in which a control 
relationship, while relating directly to another product or another 
type of commercial activity, could affect decisions involving the 
production, pricing or cost of the merchandise under consideration. 
Therefore, in these types of situations, where a control relationship 
exists, the respondent will have to demonstrate that the relationship 
does not have the potential to affect the subject merchandise or 
foreign like product.
    Several commenters suggested that the Department reconsider the 
statement in the preamble to the AD Proposed Regulations, 61 FR at 
7310, that ``temporary market power, created by variations in supply 
and demand conditions, would not suffice [as evidence of control].'' 
With respect to this comment, we continue to believe that temporary 
market power generally would not constitute sufficient evidence of 
control. However, where the issue arises, the Department will conduct a 
case-by-case examination to determine whether market power is truly 
``temporary.''
    Another commenter suggested that the regulations state that in 
analyzing control, the Department will focus on long-term, rather than 
short-term, relationships. With respect to this suggestion, the 
Department normally will not consider firms to be affiliated where the 
evidence of ``control'' is limited, for example, to a two-month 
contract. On the other hand, the Department cannot rule out the 
possibility that a short-term relationship could result in control. 
Therefore, the Department will consider the temporal aspect of a 
relationship as one factor to consider in determining whether control 
exists. In this regard, we also should note that we do not intend to 
ignore a control relationship that happens to terminate at the 
beginning (or comes into existence at the end) of a period of 
investigation or review.
    A number of commenters asked that the Department refrain from 
finding an affiliation in situations where the applicable national law 
prevents one firm from exercising control over another. With respect to 
this suggestion, the Department will take national laws into account in 
examining the existence of control. However, the Department also will 
consider whether, national laws notwithstanding, there is any de facto 
control.
    Many commenters requested that the Department establish (1) 
rebuttable presumptions for when control does or does not exist; (2) 
bright-line thresholds establishing when control does not exist; and 
(3) specific examples in the regulations of relationships that do or do 
not constitute control. We have not adopted these suggestions, because 
they require the type of fact-specific determinations that the 
Department is not prepared to make at this time. As discussed above, 
the Department intends to establish guidelines concerning affiliation 
gradually as we gain experience through the resolution of issues in 
actual cases.
    One commenter suggested that the Department should find control to 
exist only if a relationship resulted in an impact on prices or other 
significant terms of sale. The Department has not adopted this 
suggestion, because we do not agree that it is appropriate to require 
evidence regarding the actual impact of a relationship. Because section 
771(33) refers to a person being ``in a position to exercise restraint 
or direction,'' we are required to examine the ability to control, not 
the actual exercise of control.
    Another commenter suggested that the Department should not consider 
``normal commercial relationships'' as giving rise to control. We have 
not adopted this suggestion, because ``normal'' is a subjective term 
that lacks any clear definition. In our view, a standard of 
``normality'' would be subject to substantial confusion, argument, and 
litigation. More importantly, there is nothing in the statute or the 
legislative history that suggests that ``normal commercial 
relationships'' cannot give rise to control. To the contrary, the SAA 
at 838 states: ``A company may be in a position to exercise restraint 
or direction, for example, through corporate or family groupings, 
franchises or joint venture agreements, debt financing, or close 
supplier relationships in which the supplier or buyer becomes reliant 
upon the other.'' Each of the relationships described in this passage 
can be characterized as ``normal'' in the sense that they are 
commercial relationships commonly entered into by firms. Nevertheless, 
notwithstanding the ``normality'' of these commercial relationships, 
the SAA indicates that they can give rise to control.
    One commenter suggested that the Department clarify that the 
provision of a loan by one firm to another on terms consistent with 
commercial considerations will not constitute control. The Department 
has not adopted this suggestion, because we do not believe that the 
fact that a loan is provided on terms consistent with commercial 
considerations is necessarily dispositive with respect to the issue of 
control. For example, in situations where the supply of credit is 
limited, the availability of a loan, regardless of the loan's terms, 
may allow the lender to exercise control over the recipient of the 
loan.
    Several commenters suggested that the Department should define 
legal or operational control as the ``enforceable ability to compel or 
restrain commercial actions.'' As a further refinement of this 
suggestion, one commenter suggested that the Department should find 
control only if one firm is capable of forcing another firm to act 
against its own interests.
    The Department has not adopted these suggestions, because we do not 
believe that ``enforceability'' is a requisite factor under section 
771(33). In addition, in the case of the second suggestion, we believe 
that focusing on the speculative question of what is or is not in a 
firm's interests would render our analysis of affiliation less, rather 
than more, predictable.
    Aggregate basis: We received one comment concerning the definition 
of the term ``aggregate basis,'' a term that describes CVD proceedings 
in which the Department, under section 777A(e)(2)(B) of the Act, 
determines a single country-wide subsidy rate applicable to all 
exporters and producers. The commenter suggested that we substitute the 
word ``principally'' for ``solely'' so that the definition would read: 
`` `Aggregate basis' means the calculation of a country-wide subsidy 
rate based principally on information provided by the foreign 
government.'' According to the commenter, the purpose of the 
modification would be to avoid confusion when the Department conducts a 
CVD investigation or review on an aggregate basis, but one or more 
producers request an individual review or exclusion.
    We have adopted this suggestion, although not for the reason 
suggested. Although section 777A(e) of the Act establishes a preference 
for individual countervailable subsidy rates, section 777A(e)(2) 
provides for alternative methods where there are a large number of 
exporters or producers involved in an investigation or review. Under 
section 777A(e)(2)(B), one of these alternatives is to determine a 
single country-wide subsidy rate. Should the Department


---- page 27299 ----


have to use the country-wide rate method of section 777A(e)(2)(B), the 
Department will not review firms individually, although, where 
practicable, the Department will consider requests for an individual 
zero rate in an administrative review under Sec. 351.213(k). In 
addition, while the Department will consider requests for exclusions 
from firms that claim to have received no countervailable subsidies, 
the Department will not calculate subsidy rates to be applied to 
merchandise produced or exported by such firms. Instead, the Department 
merely will determine whether or not a firm requesting exclusion 
receives countervailable subsidies in more than de minimis amounts. If 
the firm does not, the Department will exclude the firm. If the firm 
does receive more than de minimis countervailable subsidies, the 
Department will not exclude the firm, and will apply to that firm the 
country-wide subsidy rate.
    Thus, the definition of ``aggregate basis'' is not inaccurate 
insofar as it relates to the calculation of individual rates and the 
granting of exclusions. On the other hand, the definition, as drafted, 
fails to reflect the fact that even in a CVD proceeding in which the 
Department calculates a single country-wide rate, it may have to obtain 
information from one or more firms with respect to certain types of 
subsidies, such as equity infusions. Therefore, we have substituted the 
word ``principally'' for ``solely'' to reflect this fact.
    Country-wide subsidy rate: One commenter suggested that we add to 
Sec. 351.102(b) a definition of ``country-wide subsidy rate.'' The 
proposed definition included a statement that the Secretary shall use 
``the smallest applicable and feasible jurisdictional unit consistent 
with'' the definition of ``country'' in section 771(3) of the Act. The 
thrust of the comment was that the Department should calculate separate 
``country-wide subsidy rates'' for individual subnational 
jurisdictions, such as provinces or states. A different commenter 
opposed this suggestion.
    We have not adopted this suggestion, because the statute does not 
require the Department to calculate state- or province-specific subsidy 
rates. The Department rejected province-specific rates in Certain 
Softwood Lumber Products from Canada, 57 FR 22570, 22578-80 (1992), and 
the Department's position was sustained in Certain Softwood Lumber 
Products from Canada, No. USA-92-1904-01, Slip op. 139-43 (FTA Panel 
May 6, 1993). We do not believe that any of the statutory amendments 
made by the URAA warrants a different outcome. Moreover, there is no 
indication in the legislative history that Congress intended any change 
to the Department's practice in this regard.
    Ordinary course of trade: We received several comments concerning 
the Department's proposed definition of the term ``ordinary course of 
trade.'' Some of these comments dealt with the definition in general, 
while other comments focussed on particular aspects of the definition.
    The definition in general: One commenter stated that the definition 
should establish a presumption that sales are in the ordinary course of 
trade until a party demonstrates otherwise on a sale-by-sale basis 
(with the exception of home-market sales at prices below cost of 
production). This commenter also argued that the standards for making 
such a claim should be exacting, and that no general unsupported 
conclusions should suffice to exclude selected transactions. This 
commenter also urged the Department to omit from the regulation 
examples of sales that might be outside the ordinary course of trade, 
stating that each case should turn on its facts.
    We have adopted this suggestion in part. We have not adopted the 
suggestion regarding the establishment of a presumption, because we 
believe that judicial precedent is sufficiently clear that the party 
making the claim bears the burden of proving that sales are outside the 
ordinary course of trade. See, e.g., Koyo Seiko Co., Ltd. v. United 
States, Slip op. 96-101 (Ct. Int'l Trade June 19, 1996), pp. 22-25, and 
cases cited therein. In addition, we have not adopted the suggestion 
that we delete references to particular types of sales that might be 
considered as outside the ordinary course of trade. Given the 
illustrative examples of such sales in the SAA, we believe that it is 
appropriate to provide guidance to parties by describing certain types 
of transactions that, depending on the facts, might be deemed to be 
outside the ordinary course of trade.
    However, we have modified the definition so as to emphasize the 
fact-specific nature of ordinary course of trade analyses. As revised, 
the definition states that, as required by judicial precedent, the 
Secretary will evaluate ``all the circumstances particular to the sales 
in question.''
    Another commenter expressed satisfaction with the proposed 
definition, but suggested that the Department's placement of the closed 
parenthesis in the definition was incorrect. We agree that we misplaced 
the closed parenthesis. However, we have corrected the error by 
restating the parenthetical as a separate sentence.
    Abnormally high profits: Several commenters objected to the 
reference in the proposed definition to ``merchandise sold * * * with 
abnormally high profits.'' According to one commenter, neither the 
statute nor the SAA refers to ``abnormally high profits'' as a factor 
in considering whether merchandise is sold in the ordinary course of 
trade. In addition, this commenter asserted that the inclusion of this 
factor in the definition would invite respondents to argue for the 
exclusion of allegedly overly profitable sales.
    Another commenter acknowledged that the SAA does discuss sales with 
``abnormally high profits'' as being outside the ordinary course of 
trade, but that it does so in the context of constructed value profit. 
This same commenter also argued that the proposed definition is overtly 
biased in favor of respondents, because it does not provide for the 
exclusion of sales with abnormally ``low'' profits as being outside the 
ordinary course of trade. A third commenter, also noting that the 
proposed definition does not refer to sales with abnormally ``low'' 
profits, requested that the Department either delete the reference to 
abnormally high profits or revise the definition to refer to 
``merchandise sold at aberrational prices or profits.''
    We have not adopted these suggestions. With respect to the 
propriety of including in the definition any reference to sales with 
abnormally high profits, we believe that the SAA warrants such a 
reference. As acknowledged by one of the commenters, the SAA at 839-40 
does refer to sales with abnormally high profits as being outside the 
ordinary course of trade. Although this reference is made in the 
context of constructed value profit, we believe that it applies in 
other contexts, as well. The SAA at 839 itself notes that ``constructed 
value serves as a proxy for a sales price.'' Thus, where normal value 
is based on constructed value, the constructed value is supposed to 
approximate what a price-based normal value would be if there were 
usable sales. Because, according to the SAA, a constructed value that 
included a profit element based on sales with abnormally high prices 
would not constitute an acceptable normal value, it follows that it 
would be improper to use sales with abnormally high profits as a basis 
for a price-based normal value.
    With respect to the suggestion that the Department will be 
overwhelmed with arguments from respondents claiming


---- page 27300 ----


that particular sales have abnormally high profits, as discussed above, 
the burden of establishing that a particular sale is outside the 
ordinary course of trade rests on the party making the claim. Over 
time, we believe that this evidentiary burden will ensure that only 
serious claims are presented to the Department.
    Finally, we do not believe that the proposed definition favors 
respondents. When one considers the proposed definition in light of the 
entire statute and the SAA, it is apparent that the Department may 
exclude sales with both abnormally low (i.e., negative) and abnormally 
high profits from a dumping analysis. The only difference is that the 
Department considers sales with abnormally low profits under the rubric 
of ``sales below cost of production'' and section 773(b) of the Act. 
However, as section 771(15)(A) of the Act makes clear, sales that are 
disregarded under section 773(b)(1) as being below cost are considered 
to be outside the ordinary course of trade.
    Off-quality merchandise: One commenter requested that the 
Department delete the reference in the proposed definition to ``off-
quality merchandise.'' According to this commenter, neither the statute 
nor the SAA mentions ``off-quality merchandise,'' and such merchandise 
may be in the ordinary course of trade in certain industries and 
markets.
    We have not adopted this suggestion. Contrary to the comment, the 
SAA at 839 does refer to ``off-quality merchandise,'' albeit in the 
context of constructed value profit. For the reasons set forth above in 
connection with the issue of ``abnormally high profits,'' we believe 
that this reference is relevant to the general definition of ``ordinary 
course of trade.'' As for the argument that sales of ``off-quality 
merchandise'' may be in the ordinary course of trade in certain 
industries and markets, the inclusion of the reference to ``off-quality 
merchandise'' does not mean that sales of such merchandise are 
automatically outside the ordinary course of trade. As discussed above, 
and as the revised definition now makes clear, the Secretary will 
conclude that particular sales are outside the ordinary course of trade 
only after an evaluation of all of the circumstances.
    Samples and Prototypes: One commenter suggested that the Department 
should consider sales of sample and prototype merchandise to be outside 
the ordinary course of trade, and should exclude such sales from its 
calculations of dumping margins. We have not adopted this suggestion 
for several reasons. First, there needs to be some limit on the number 
of items included in a non-exhaustive list of examples. While we do not 
disagree that there may be instances in which the Department might 
consider sales of samples or prototypes to be outside the ordinary 
course of trade, the commenter acknowledged that such sales already may 
be embraced by the regulatory reference to merchandise ``sold pursuant 
to unusual terms of sale.'' Second, the commenter requested that sales 
of samples or prototypes be excluded from the dumping margin 
calculation altogether. However, as both the Department and the courts 
have made clear on numerous occasions, the statutory exclusion for 
sales outside the ordinary course of trade applies only to sales used 
to determine foreign market value (now normal value), not sales used to 
determine U.S. price (now export price or constructed export price). 
Thus, the courts have sustained the inclusion of all United States 
sales whether in or out of the ordinary course of trade. See, e.g., 
Bowe Passat Reinigungs-Und Waschereitechnik GMBH v. United States, 926 
F. Supp. 1138, 1147-49 (Ct. Int'l Trade 1996), and cases cited therein.
    Price adjustment: We have added to Sec. 351.102(b) a definition of 
the term ``price adjustment.'' This term is intended to describe a 
category of changes to a price, such as discounts, rebates and post-
sale price adjustments, that affect the net outlay of funds by the 
purchaser. As discussed in connection with Sec. 351.401, below, such 
price changes are not ``expenses'' as the Department usually uses that 
term, but rather are changes that the Department must take into account 
in identifying the actual starting price. Numerous commenters requested 
clarification on whether price adjustments would be treated as direct 
or indirect expenses. As discussed more fully below, price adjustments 
are neither direct nor indirect expenses, although they impact price as 
additions or deductions.
    Sale or likely sale: The proposed definition of ``likely sale,'' 
which was based on 19 CFR Secs. 353.2(t) and 355.2(p), defined this 
term as meaning ``a person's irrevocable offer to sell.'' One commenter 
suggested that the Department liberalize this definition to encompass 
something less than an irrevocable offer to sell.
    Although the Department has not adopted this particular suggestion, 
we have taken another look at the ``irrevocable offer'' standard. 
Because most AD/CVD petitions are based on sales, rather than likely 
sales, the Department rarely has applied this standard. However, in one 
case where the use of the irrevocable offer standard was at issue, the 
court criticized the standard. Kerr-McGee Chemical Corp. v. United 
States, 765 F. Supp. 1576 (Ct. Int'l Trade 1991). Therefore, the 
Department has decided to eliminate the definition of ``likely sale'' 
in Sec. 351.102(b). Should the meaning of this term become an issue in 
future cases, we will interpret the term in light of the statute and 
the legislative history.
    Segment of the proceeding: One commenter suggested that paragraph 
(2) of the definition of ``segment of the proceeding'' include a 
reference to scope inquiries, because such inquiries are separately 
reviewable under section 516A of the Act. We have adopted this 
suggestion, and have revised paragraph (2) of the definition 
accordingly.
    Another commenter did not object to the definition itself, but 
stated that the Department should treat each whole review as a separate 
proceeding, and should rely upon the record from each proceeding only 
in connection with that particular proceeding. Because this commenter 
did not propose any revisions to the definition, we have not made any 
changes to the definition based on this comment.
    Suspension of liquidation: One commenter suggested that in order to 
eliminate confusion created by ``suspensions'' ordered by agencies 
other than the Department, such as the Customs Service, the Department 
should add to Sec. 351.102 a definition of ``suspension of 
liquidation.'' The commenter included a proposed definition that, in 
general, defined ``suspension of liquidation'' as a suspension of 
liquidation specifically ordered by the Department under the authority 
of title VII or title X of the Tariff Act, or by the courts in 
litigation involving antidumping or countervailing duties. No commenter 
opposed this suggestion.
    We have adopted the suggestion, and have added to Sec. 351.102(b) a 
definition of ``suspension of liquidation'' along the lines suggested 
by the commenter. However, we have modified the language proposed by 
the commenter in order to make the definition more accurate with 
respect to suspensions of liquidation ordered by courts.

Section 351.104

    Section 351.104 defines what constitutes the official and public 
records of an AD/CVD proceeding, and prohibits the removal of a record 
or any portion thereof unless ordered by the Secretary or required by 
law.
    In connection with Sec. 351.104(a)(1) and its list of examples of 
materials that will be included in the official record,


---- page 27301 ----


one commenter suggested that the Department add to this list ``changes 
to the electronic database that are made by Commerce (or by 
respondents)'' and ``computer programs.'' Although the material 
described by the commenter is, as a matter of practice, included in the 
official record, we have not adopted this suggestion. As the commenter 
acknowledged, paragraph (a)(1) merely contains examples of material 
that will be included in the record, and is not itself an exhaustive 
list. The commenter did not indicate that the absence of a reference in 
the former regulations to computer programs or changes to the 
electronic database gave rise to difficulties in actual cases. In the 
absence of such difficulties, we see no need to revise this regulation.
    One commenter supported Sec. 351.104(a)(2)(ii), which deals with 
the inclusion in the official record of documents returned to the 
submitter. The commenter requested that this provision remain 
unchanged. The Department has not revised this provision.

Section 351.105

    Section 351.105 defines the four categories of information 
applicable to AD/CVD proceedings: public, business proprietary, 
privileged, and classified. After a review of proposed Sec. 351.105 and 
the comments submitted pertaining to that section, we have left 
Sec. 351.105 unchanged, but for some stylistic changes involving the 
substitution of ``that'' for ``which.''
    One commenter suggested that the proposed definition of ``public 
information'' in Sec. 351.105(b) is too narrow, because it excludes 
business information claimed by the submitter to be business 
proprietary unless the submitter has published the information or 
otherwise made it public. According to this commenter, the definition 
should include all non-classified information that a party learns 
through any lawful means outside the context of disclosure under an 
administrative protective order (``APO''). The commenter cited, for 
example, information acquired through market research that may not have 
been published or made generally available to the public at large. In 
addition, this commenter proposed that the definition of ``business 
proprietary information'' contained in Sec. 351.105(c) expressly 
exclude all ``public information'' as the commenter would define 
``public information.''
    For the following reasons, the Department has not adopted this 
suggestion. The Department places a high priority on the safeguarding 
of business proprietary information. The definition of ``public 
information'' in Sec. 351.105(b) is identical to the definition of that 
term in former 19 CFR Secs. 353.4(a) and 355.4(a). Absent some evidence 
that the definition interferes with a party's ability to defend its 
interests in an AD/CVD proceeding, we are reluctant to transform what 
heretofore has been considered as business proprietary information into 
public information. However, the commenter did not offer any evidence 
that the Department's longstanding definition of ``public information'' 
has had this effect. Instead, the commenter merely asserted that it is 
not the Department's role ``to regulate lawfully acquired commercial 
information.''
    The same commenter suggested that the Department should amend 
Sec. 351.105(b) so as to add the following additional category of 
information normally considered as public: ``descriptions of reporting 
methodologies, such as allocation methods.'' We have not adopted this 
suggestion, because here, too, there is no indication that the absence 
of a reference in Sec. 351.105(b) to this type of information has 
interfered with a party's ability to defend its interests in an AD/CVD 
proceeding.
    We should note, however, that the former regulations did not, and 
these regulations will not, preclude a party from arguing in a given 
case that business proprietary treatment should not be accorded to 
particular information. In this regard, Sec. 351.104(b)(3) continues to 
treat as ``public information'' information ``that the Secretary 
determines is not properly designated as business proprietary.'' 
However, we should emphasize here that where a party seeks to challenge 
the business proprietary status of certain information, it should take 
care to ensure that in submitting its challenge to the Secretary, it 
does not inadvertently disclose the information in dispute.
    Finally, we received two comments that essentially suggested that 
the Department delete proposed Sec. 351.105(c)(10), which provides for 
business proprietary treatment of the position of a domestic producer 
or workers regarding a petition. According to one commenter, 
Sec. 351.105(c)(10) would effectively preclude industrial users and 
consumers from commenting on the issue of industry support for a 
petition, because users and consumers would not be eligible to obtain 
this information under APO. In addition, both commenters were skeptical 
regarding the ability of the Department to grant APO access to this 
information in a timely manner so that ``interested parties'' will be 
able to comment on the issue of industry support within the 20-day 
statutory deadline. A third commenter, however, opposed deleting 
paragraph (c)(10), although it agreed that the Department should 
expedite the APO process.
    We have not adopted this suggestion for several reasons. As we 
stated in the AD Proposed Regulations, 61 FR at 7314, several 
commenters indicated that, due to concerns regarding commercial 
retaliation, business proprietary treatment may be necessary in order 
to encourage domestic producers and workers to present their candid 
views regarding a petition. The instant commenters did not challenge 
the validity of these concerns. As for APO disclosure, the Department 
is aware of the need for expedited disclosure with respect to 
information concerning industry support, and is confident that it will 
be able to process APO requests in a timely manner that allows 
interested parties to exercise their right to comment on the existence 
of industry support for a petition.

Section 351.106

    Section 351.106 deals with the de minimis standard, and implements 
section 703(b)(4) and section 733(b)(3) of the Act. After reviewing 
proposed Sec. 351.106 and the comments pertaining to that section, we 
have left Sec. 351.106 unchanged.
    One commenter objected to the fact that the de minimis standard for 
reviews remained at 0.5 percent, and suggested that this was 
inconsistent with the spirit, if not the letter, of the AD Agreement. 
We have left the de minimis standard for reviews at 0.5 percent, 
because, as stated in the AD Proposed Regulations, 61 FR at 7312, this 
result is required by the statute and is consistent with both the AD 
Agreement and the SCM Agreement.
    As discussed above in connection with Sec. 351.102(b), one 
commenter suggested a definition of ``country-wide subsidy rate'' that 
would have provided for the application of country-wide subsidy rates 
on a state-or province-specific basis. This same commenter, assuming 
the adoption of its prior suggestion, proposed that we add a paragraph 
to Sec. 351.106 that would have applied the de minimis standard to 
country-wide rates on a state-or province-specific basis. The same 
commenter that opposed the prior suggestion also opposed the instant 
suggestion concerning the de minimis standard. Because we have not 
adopted the prior suggestion, we are not adopting the corresponding 
suggestion regarding the de minimis standard; i.e.,


---- page 27302 ----


we will not apply the de minimis standard on a subnational level.
    We have left unchanged proposed Sec. 351.106(c)(2), which applies 
the de minimis standard to the assessment of antidumping duties. 
Applying the de minimis standard to assessments on an importer-specific 
basis resolves the inconsistency between the treatment of cash deposits 
and assessments. If a de minimis amount of estimated duties is not 
worth collecting, then there is no reason to believe that a de minimis 
level of definitively determined duties is worth assessing and 
collecting either. Paragraph (c)(2) also avoids an inconsistency 
between the administration of the AD and CVD laws, something that the 
Department has expressed as one of its goals.
    One commenter contended that the Department should not apply the de 
minimis standard to the assessment of antidumping duties, because such 
a policy does not result in any reduction in the Department's 
administrative burden, is contrary to the SAA, and is not allowed by 
the statute. This commenter cited the statutory requirement that 
antidumping duties be imposed ``in an amount equal to the amount by 
which the normal value exceeds the export price (or the constructed 
export price) for the merchandise'' for the proposition that the 
Department never may decline to assess antidumping duties, regardless 
of how small such duties may be. With regard to the SAA, this commenter 
contended that the SAA expressly limits the application of the de 
minimis standard to the collection of deposits only by stating: 
``Commerce will continue its present practice in reviews of waiving the 
collection of estimated cash deposits if the deposit rate is below 0.5 
percent ad valorem, the existing regulatory standard for de minimis.''
    As noted above, the Department will apply the de minimis standard 
to the assessment of antidumping duties on an importer-specific basis. 
Regarding the commenter's statutory arguments, we believe that the 
statute is silent on the issue. Although the statutory provisions cited 
provide that the Department must assess duties, as the courts have 
recognized, these provisions do not specify any particular assessment 
methodology. See, e.g., FAG Kugelfischer Georg Schafer KGaA v. United 
States, Slip Op. 95-158, 1995 Ct. Int'l. Trade LEXIS 209 (1996), aff'd, 
No. 96-1074 (Fed. Cir. May 20, 1996). Significantly, the statutory 
provisions cited by the commenter do not address how the Department 
should apply the de minimis standards in reviews. Instead, the only 
mention of such standards applying in reviews is contained in the SAA. 
However, the SAA statement cited by the commenter (that the Department 
will continue its practice of waiving cash deposits below 0.5 percent 
in reviews) does not address the assessment issue at all. Read in 
context, the statement refers to the fact that the de minimis standard 
in reviews will continue to be 0.5 percent, as opposed to the new 2 
percent standard for AD investigations. This statement does not address 
the issue of whether the application of the 0.5 percent standard is 
limited to the collection of cash deposits of estimated duties. As the 
Department noted in the AD Proposed Regulations, 61 FR at 7312, the 
only statement addressing that issue in the SAA is the general 
statement that ``de minimis margins are regarded as zero margins.'' The 
commenter offers no policy arguments for adopting an approach that 
would limit the application of the de minimis standard to the deposit 
of estimated duties.
    Another commenter agreed with the Department's proposal to apply 
the de minimis standard to the assessment of antidumping duties. In 
addition, this commenter proposed that the Department clarify that 
where an importer purchases from more than one exporter, the importer 
will receive producer-specific assessment rates, and that no duties 
will be assessed for individual de minimis rates.
    In general, we agree with this comment, although we do not believe 
that revisions to the regulations are necessary. As discussed below, 
under Sec. 351.212(b)(1), the Department, as it has in many previous 
cases, will calculate importer-specific assessment rates for each 
producer or exporter reviewed. Thus, if one importer purchases from 
several producers or exporters, the Department will assign that 
importer an assessment rate for each producer or exporter. The 
Department will apply the de minimis standard to these individual 
assessment rates.
    Proposed paragraph (c)(2) provided that the Secretary will instruct 
the Customs Service to liquidate without regard to antidumping duties 
all entries of subject merchandise for which the Secretary calculates 
an assessment rate that is de minimis (i.e., less than 0.5 percent ad 
valorem. Two commenters noted that the proposed regulations did not 
indicate which entries will be subject to paragraph (c)(2) if it is 
issued in final form. According to the commenters, paragraph (c)(2) 
should apply to all entries that are unliquidated as of the date of 
issuance of the final regulations.
    The Department recognizes the need for guidance on this issue, but 
has not adopted the solution proposed. Instead, the Department will 
apply paragraph (c)(2) to all liquidations done pursuant to final 
results in reviews that the Department initiates after the effective 
date of these regulations. This approach is consistent with the 
applicability date set forth in Sec. 351.701. In addition, this 
approach is necessary in order to avoid the extreme administrative 
burden the Department would face if it applied paragraph (c)(2) 
retroactively, in which case the Department would have to amend the 
numerous liquidation instructions that it has sent to the Customs 
Service over the years. Normally, the Customs Service liquidates 
entries soon after the Department issues liquidation instructions. 
However, the Department has no way to determine whether the Customs 
Service has liquidated all entries subject to liquidation instructions, 
because liquidation may have been delayed for reasons unrelated to the 
existence of an AD order. Therefore, to implement the commenters' 
proposal, the Department would have to amend all of its previously 
issued liquidation instructions.
    One commenter expressed concern that the Department will apply 
paragraph (c)(2) based upon de minimis weighted-average dumping 
margins. With respect to this comment, we note that Department usually 
uses the term ``weighted-average dumping margin'' to refer to an 
exporter-or producer-specific margin that the Department uses for cash 
deposit purposes. As discussed above, the Department normally will 
apply paragraph (c)(2) on the basis of importer-specific assessment 
rates. However, although the Department has been calculating importer-
specific assessment rates for some time, there are some cases that are 
held up in litigation. In these cases, we may not be able to calculate 
importer-specific assessment rates, because the record does not contain 
the necessary information. In such situations, where the Department 
issues assessment instructions at the conclusion of the litigation, we 
will apply the de minimis rule on the basis of the weighted-average 
dumping margin calculated for the exporter or producer.

Section 351.107

    We have added a new Sec. 351.107 that deals with (1) the 
establishment of deposit rates in situations involving a nonproducing 
exporter, (2) the selection of the appropriate deposit rate where entry 
documents do not identify the


---- page 27303 ----


producer of subject merchandise, and (3) the calculation of rates in AD 
proceedings involving nonmarket economy countries.
    Nonproducing exporters: In the AD Proposed Regulations, 61 FR at 
7311, the Department requested additional public comment on the issue 
of whether to promulgate special rules regarding the rates applicable 
to exporters that are not also producers, such as trading companies. We 
noted that one alternative would be to calculate a separate rate for 
each exporter/producer combination.
    One commenter suggested that the Department should apply this 
approach in all instances. Other commenters argued that the Department 
should not codify an across-the-board rule, but instead should 
establish rates for exporter/producer combinations on a case-by-case 
basis. Another commented that it would be inappropriate to determine 
rates solely on the basis of exporter/producer combinations, and that 
normally the Department should base deposits of estimated duties on the 
rate calculated for the producer.
    The Department agrees with the comments suggesting that it is 
appropriate in some instances to establish rates for exporter/producer 
combinations. Therefore, in paragraph (b)(1)(i), we have provided for 
the establishment of such ``combination rates.''
    We believe that combination rates are appropriate, because, in an 
AD proceeding, the Department usually investigates or reviews sales by 
a nonproducing exporter only if that exporter's supplier sold the 
subject merchandise to the exporter without knowledge that the 
merchandise would be exported to the United States. While we agree with 
one commenter that in these instances the producer's pricing is not at 
issue, we are concerned about the proper application of any deposit 
rate determined on the basis of the exporter's pricing. Establishing a 
deposit rate for an exporter and, without regard to the identity of the 
supplier, applying that rate to all future exports by that exporter 
could lead to the application of that rate even if other suppliers sold 
to the exporter with knowledge of exportation to the United States. 
This would enable a producer with a relatively high deposit rate to 
avoid the application of its own rate by selling to the United States 
through an exporter with a low rate. Therefore, in order to ensure the 
proper application of deposit rates, the Department believes that it 
should establish, where appropriate, individual rates for nonproducing 
exporters in combination with the particular supplier or suppliers from 
whom the exporter purchased the subject merchandise.
    On the other hand, the Department believes that there are 
situations where it may be inappropriate and/or impractical to 
establish combination rates. For example, it may not be necessary to 
establish combination rates when investigating or reviewing 
nonproducing exporters that are not trading companies, such as original 
equipment manufacturers. In addition, it may not be practicable to 
establish combination rates when there are a large number of producers, 
such as in certain agricultural cases. The Department will make such 
exceptions to combination rates on a case-by-case basis.
    Another instance in which the Department assigns rates to exporters 
is in AD investigations and reviews of imports from nonmarket economies 
(NMEs). In those cases, if sales to the United States are made through 
an NME trading company, we assign a noncombination rate to the trading 
company regardless of whether the NME producer supplying the trading 
company has knowledge of the destination of the merchandise. One 
exception to this NME practice occurs where we find no dumping and 
exclude an exporter from an AD order. Where exclusions are involved, we 
publish a combination rate to address the same concerns described above 
regarding redirection of exports through an excluded trading company. 
Nothing in Sec. 351.107(b)(1) is intended to change our policy for 
assigning rates in NME proceedings.
    The Department also believes it is not appropriate to establish 
combination rates in an AD investigation or review of a producer; i.e., 
where a producer sells to an exporter with knowledge of exportation to 
the United States. In these situations, the establishment of separate 
rates for a producer in combination with each of the exporters through 
which it sells to the United States could lead to manipulation by the 
producer. Furthermore, the Department recognizes that in many 
industries it is not uncommon for a producer to sell some amount of 
merchandise purchased from other producers. In such situations, the 
Department generally intends to establish a single rate for such a 
respondent based on its status as a producer, although unusual 
circumstances may warrant the application of a combination rate.
    The Department also generally agrees with the comment that, in AD 
cases, if an exporter changes its supplier, the supplier's rate should 
be applied for deposit purposes rather than the ``all-others'' rate. 
Therefore, paragraph (b)(2) provides that for purposes of deposits, the 
Department will apply the producer's rate to entries if the Department 
has not established previously a deposit rate for the particular 
exporter/producer combination or the exporter alone. If the Department 
has not calculated an individual rate for the producer, the Department 
will apply the ``all-others'' rate. Again, nothing in this section is 
intended to change our practice regarding the rates assigned to NME 
exporters. In particular, an ``all-others'' rate may not be calculated 
in an NME proceeding or, if it is, it may not apply to the new shippers 
covered in this section.
    In the case of CVD proceedings, subject merchandise may be 
subsidized by means of subsidies provided to both the producer and the 
exporter. In the Department's view, all subsidies conferred on the 
production of subject merchandise benefit that merchandise, even if it 
is exported to the United States by a reseller rather than the producer 
itself. Therefore, the Department calculates countervailable subsidy 
rates on the basis of any subsidies provided to the producer, as well 
as those provided to the exporter in any investigation or review 
involving exports by a nonproducing exporter. As a result, rates 
established for particular combinations of exporters and producers are 
the most accurate rates. Moreover, as in an AD proceeding, combination 
rates help to ensure the proper application of combination rates when 
other producers sell through the same exporter.
    As in AD proceedings, in CVD proceedings there may be situations in 
which it is not appropriate or practicable to establish combination 
rates. In such situations, the Department will make exceptions to its 
combination rate approach on a case-by-case basis. In addition, for a 
new combination of exporter and producer, the Department believes that 
it should apply the supplier's rate, rather than the ``all-others'' 
rate, for deposit purposes. Therefore, under paragraph (b)(2), in a CVD 
proceeding the Department intends to apply the producer's rate to 
entries for deposit purposes if the Department has not established a 
rate for the particular exporter/producer combination or the exporter 
alone. If the producer's rate is applicable, but the Department has not 
established a rate for that producer, the Department will apply the 
``all-others'' rate.
    In this regard, however, in a CVD proceeding, the Department 
intends to establish a deposit rate for each


---- page 27304 ----


producer that it investigates or reviews, even if during the period of 
investigation or review the producer happened to be selling to the 
United States through a reseller. The purpose of this approach is to 
ensure that if the producer subsequently begins to export to the United 
States directly, the Department will be able to apply a deposit rate 
based on the producer's own level of subsidization, as opposed to the 
``all-others'' rate.
    The proper application of rates to entries for deposit purposes 
generally requires that the producer of the merchandise be identified. 
Accordingly, under paragraph (c), if an entry does not identify the 
producer (or the exporter's supplier if the exporter is not the 
producer), the Department will instruct the Customs Service to use the 
higher of: (1) the highest of any combination rate involving that 
exporter, (2) the highest rate for any producer other than a producer 
for which the Secretary has established a combination rate involving 
the exporter in question, or (3) the ``all-others'' rate. The objective 
of paragraph (c) is to prevent an exporter from obtaining a lower 
deposit rate by means of withholding the identity of its supplier from 
the Customs Service.
    As an example of how paragraph (c) would operate, assume that in an 
AD proceeding the existing rates are: Exporter A/Producer 1--5 percent; 
Exporter B/Producer 2--20 percent; Producer 1--18 percent; Producer 2--
15 percent; and All Others--10 percent. If an entry did not identify 
the producer of subject merchandise exported by Exporter A, the 
Department would instruct the Customs Service to apply Producer 2's 
deposit rate of 15 percent. 15 percent would be the appropriate rate if 
Producer 2 were the supplier, and it also is the highest of the 
possible rates applicable had the producer been identified (those rates 
being 5, 10, and 15 percent in this example). Producer 1's rate of 18 
percent would not be appropriate, because the Department already would 
have established that, when Producer 1 exports through Exporter A, the 
appropriate rate is 5 percent.
    Nonmarket economy cases: The second sentence of the definition of 
``rates'' in proposed Sec. 351.102(b) provided the Department with the 
authority to apply a single AD margin to all producers and exporters 
from a nonmarket economy (``NME'') country. We have moved that sentence 
to paragraph (d) of Sec. 351.107.
    As explained in the AD Proposed Regulations, 61 FR at 7311, the 
Department elected not to codify its current presumption that a single 
rate will be applied in NME cases. We received several comments on this 
issue.
    Four commenters suggested that the Department codify its current 
presumption of a single rate. Three of these commenters viewed the 
presumption as correct, because the fact that a country is an NME 
carries with it an assumption that the government controls all 
exporters. Moreover, these commenters asserted that NME governments, 
due to their control, can funnel sales of the subject merchandise 
through, or transfer production of the subject merchandise to, the 
entity that receives the most favorable dumping margin. These 
commenters further urged the Department to extend the presumption of 
control beyond the central NME government to provincial and municipal 
governments, as well. One commenter that urged the Department to codify 
the presumption of a single rate also argued that the presumption is 
consistent with the statute, because all NME companies are under common 
ownership and, hence, comprise a single exporter. Consequently, in this 
commenter's view, the Department should calculate a single dumping 
margin just as it would calculate a single dumping margin in situations 
where the Department ``collapses'' market economy producers under 
common ownership. This same commenter urged the Department to make 
clear that the NME-wide rate calculated as a consequence of the 
presumption is different from the ``all-others'' rate described in 
section 735(c)(1)(B)(i)(II) of the Act.
    One commenter opposed the presumption. In discussing the People's 
Republic of China (``PRC''), this commenter pointed to the reforms that 
have been instituted in the PRC economy, claiming that the underlying 
premise of the presumption--that the central government controls 
exporters--is erroneous. According to the commenter, the Department's 
experience in administering the presumption confirms this conclusion, 
because in virtually every case since the Department instituted the 
presumption, individual PRC producers have been able to demonstrate 
that they are entitled to their own rates. Consequently, this commenter 
argued, the Department should abandon the presumption of a single NME-
wide rate, and non-investigated exporters in an NME should receive an 
all-others rate. Another commenter asked that even if the Department 
does not codify the presumption, the Department should clarify that it 
will continue to calculate separate rates in appropriate cases.
    Several commenters went on to make specific suggestions for 
amending the so-called ``separate rates test''; i.e., the conditions 
that must be met for rebutting the presumption. One commenter urged the 
Department to incorporate into the separate rates test the affiliated 
party criteria from section 771(33) of the Act and Secs. 351.102(b) and 
351.401(f) of the regulations. In this commenter's view, the affiliated 
party criteria provide appropriate guidance on when parties under 
common ownership should be subject to a single AD rate. A second 
commenter recommended amending the test to include an assessment of 
possible central government influence in the future. Also, in this 
commenter's view, the NME exporter seeking a separate rate should be 
required to present affirmative evidence that the government is not 
involved in the exporter's pricing decision. In other words, this 
commenter claimed, an absence of evidence of control should not be 
sufficient to rebut the presumption. Finally, this commenter suggested 
that, because of the potential for circumvention, the Department should 
calculate individual rates only for manufacturers, and not for export 
trading companies.
    Another commenter pointed to the unfairness of having to prove the 
negative; i.e., the absence of control. This commenter also suggested 
that the Department should focus on events during the period of 
investigation and not speculate about events that might occur in the 
future. Two commenters urged the Department to provide an opportunity 
for firms to receive separate rates in those situations where the 
Department chooses not to investigate all exporters. In their view, 
instead of using the punitive NME-wide rate, the Department should 
assign these non-investigated exporters an average dumping margin 
calculated on the basis of investigated firms receiving separate rates.
    As in the proposed regulations, we have refrained from codifying 
the presumption of a single rate in NME AD cases. Nor have we adopted a 
modified version of the presumption. We appreciate the many thoughtful 
comments that we received on this topic. However, because of the 
changing conditions in those NME countries most frequently subject to 
AD proceedings, we do not believe it is appropriate to promulgate the 
presumption or the separate rates test in these regulations. Instead, 
we intend to continue developing our policy in this area, and the 
comments that were submitted will help us in that process. We would 
like


---- page 27305 ----


to clarify, however, that we do intend to grant separate rates in 
appropriate circumstances, and that our decision not to codify the 
presumption or the separate rates test should not be seen, as one 
commenter suggested, as a decision not to grant separate rates. Also, 
as discussed above in connection with Sec. 351.107(b)(1), we intend to 
continue calculating AD rates for NME export trading companies, and not 
the manufacturers supplying the trading companies.

Subpart B--Antidumping Duty and Countervailing Duty Procedures

    Subpart B deals with AD/CVD procedures, and is based on subpart B 
of part 353 and part 355 of the Department's former regulations.

Section 351.202

    Section 351.202 deals with the contents of, and filing requirements 
for, AD/CVD petitions. We received several comments regarding proposed 
Sec. 351.202.
    Contents of petitions: Proposed Sec. 351.202(b), consistent with 
the statute, provided that a petition must contain specified 
information ``to the extent reasonably available to the petitioner.'' 
One commenter suggested that the Department revise Sec. 351.202(b) so 
as to make clear that the ``reasonably available'' standard is 
flexible, and that, in particular, the Department expressly acknowledge 
in the regulation that cost is a relevant consideration in determining 
what is ``reasonably available.''
    We have not adopted this suggestion. While we do not disagree with 
the proposition that the ``reasonably available'' standard is flexible, 
we believe that the word ``reasonably'' makes this flexibility 
manifest. In addition, while we also do not disagree with the notion 
that cost to a petitioner is a factor in determining what is reasonably 
available, it is only one of many possible factors. To identify in the 
regulation one factor to the exclusion of others might result in undue 
emphasis being placed on the factor of cost. The ``reasonably 
available'' standard has been in the statute for many years, and we 
believe that it provides sufficient guidance to petitioners as to the 
efforts they must undertake in providing information to the Department.
    The same commenter objected to the requirement in proposed 
Sec. 351.202(b)(3) that a petitioner provide production data for each 
domestic producer identified by the petitioner. This commenter argued 
that Article 5.2 of the AD Agreement and Article 11.2 of the SCM 
Agreement merely require that a petitioner provide aggregate production 
data for all known domestic producers. A second commenter supported 
proposed Sec. 351.202(b)(3) as drafted, arguing that the SAA at 861 
clearly requires producer-specific production data.
    We do not agree with the first commenter's interpretation of 
articles 5.2 and 11.2. However, even if that interpretation were 
correct, it is the U.S. statute that controls. The SAA clearly requires 
that a petitioner provide producer-specific production data, subject, 
of course, to the proviso that such information is reasonably available 
to the petitioner. This information is necessary in order to enable the 
Department to determine whether an adequate portion of domestic 
producers support a petition, an inquiry which is based on production 
volumes of domestic producers. Therefore, we have left 
Sec. 351.202(b)(3) unchanged.
    Two commenters suggested that the Department coordinate with the 
Commission with respect to regulations dealing with the contents of 
petitions, and that the Department incorporate into Sec. 351.202(b) the 
specific requirements contained in the Commission's corresponding 
regulation. In addition, these commenters suggested that, in light of 
the Commission's proposed Sec. 207.11(b)(2)(iv), the Department should 
revise its own proposed Sec. 351.202(b)(8) so as to require volume and 
value information regarding the subject merchandise for the most recent 
three-year period, as opposed to a two-year period.
    We have adopted these suggestions in part. The Commission completed 
its rulemaking activity and issued final rules on July 22, 1996. See 61 
FR 3818. These final rules contain a revised 19 CFR Sec. 207.11 that 
deals with the contents of AD/CVD petitions. We have incorporated 
elements of the Commission's regulations into Sec. 351.202(b) where the 
information identified in Sec. 207.11 is of the same general type as 
that sought by the Department. With respect to the identity of 
importers, we have revised proposed Sec. 351.202(b)(9) so as to require 
telephone numbers for each importer identified, to the extent such 
information is reasonably available to the petitioner. On the other 
hand, we have not incorporated elements of Sec. 207.11 where the 
information identified in that regulation is not of the same general 
type as that sought by the Department. For example, we have not 
included the requirement of Sec. 207.11(b)(2)(iv) that a petitioner 
identify each product for which the petitioner requests the Commission 
to seek pricing information in its questionnaires. Finally, we have 
added a sentence to paragraph (a) that advises petitioners to refer to 
the Commission's regulations concerning petition contents.
    With respect to the suggestion that we require three, rather than 
two, years of volume and value information, as required by proposed 
Sec. 207.11(b)(2)(iv), we note that the Commission deleted this 
provision in its final rule. Therefore, we are not adopting this 
suggestion for purposes of Sec. 351.202(b).
    Amendments to petitions: One commenter objected to the substitution 
of ``may'' for ``will'' in proposed Sec. 351.202(e) (``The Secretary 
may allow timely amendment of the petition''). The commenter argued 
that the substitution is improper, because it confers on the Department 
more discretion than is allowed by section 732(b)(1) of the Act. We 
have retained the language of the proposed rule. In our view, the 
statute, by permitting the Secretary to establish on a case-by-case 
basis the timing and conditions for any amendments to a petition, 
confers considerable discretion. We continue to believe that the word 
``may'' more accurately reflects this discretionary authority than does 
the word ``will.''
    Pre-initiation communications: Commenting on proposed 
Sec. 351.202(i), one commenter suggested that because the statutory 
limitation on pre-initiation communications is limited to comments that 
are unsolicited by the Department, the Department should revise 
Sec. 351.202(i) so as to clarify that the Department retains the 
discretion to ``solicit'' comments on its own initiative. According to 
this commenter, the Department's interpretation of the SAA in the AD 
Proposed Regulations is incorrect. See 61 FR at 7313. The commenter 
argued that while the SAA limits the pre-initiation right of parties to 
comment to the issue of industry support, Congress deliberately used 
the word ``unsolicited'' in sections 702(b)(4)(B) and 732(b)(3)(B) of 
the Act in order to provide the Department with the discretion to 
solicit comments on any issue where necessary. Two other commenters 
submitted similar comments.
    Three commenters, however, opposed the suggestion described in the 
preceding paragraph. In addition, these commenters proposed that the 
Department revise the proposed regulations so as to expressly state 
that the Department will not solicit information from sources other 
than domestic interested parties.
    We have not adopted either of these competing suggestions. As noted 
above,


---- page 27306 ----


in drafting these regulations, the Department has sought to avoid 
repeating the statute to the extent possible. Consistent with this 
objective, in proposed Sec. 351.202(i), the Department sought to do no 
more than clarify that the filing of a notice of appearance would not 
constitute a ``communication'' within the meaning of the statute. The 
Department referred in paragraph (i) to sections 702(b)(4)(B) and 
732(b)(3)(B) merely to provide a context for this clarification. As for 
the Department's discussion of the SAA mentioned by the first 
commenter, this discussion was in response to suggestions that the 
Department should solicit comments regarding a petition, an activity 
clearly not contemplated by the statute or the SAA.
    Each group of commenters is asking the Department to place a 
different gloss on the statute. At this time, we do not believe that 
either gloss is necessary or appropriate. However, in view of the fact 
that both groups of commenters apparently misinterpreted the 
Department's intent in drafting proposed Sec. 351.202(i), we have 
revised that paragraph to clarify that it deals only with the treatment 
of notices of appearance.
    We should note that the Department has no intention of soliciting 
comments concerning the adequacy and accuracy of a petition. In this 
regard, the Department intends to follow the general rule articulated 
by the Federal Circuit in United States v. Roses, Inc., 706 F.2d 1563 
(1983), that, in order to determine whether a petition is adequate 
under the law, the Department should look only within the four corners 
of the petition. This general principle is now incorporated in sections 
702(b)(4)(B) and 732(b)(3)(B) of the Act.
    The three exceptions to this rule are those specified in the Act 
and the SAA: for comments concerning industry support for the petition; 
for inquiries concerning the status of the Department's consideration 
of the petition; and for government-to-government consultations in CVD 
investigations. With respect to industry support, the statutory 
exception is necessary in part because the issue of industry support 
cannot be revisited after initiation. The SAA at 194 makes clear that 
the Department is to construe this exception narrowly. The Department 
may accept and answer inquiries concerning the status of the 
Department's consideration of a petition, because such inquiries do not 
constitute comments on the accuracy and adequacy of the petition 
itself. In the case of CVD investigations, section 702(b)(4)(B) 
expressly directs the Department to provide the government of the 
exporting country with an opportunity for consultations on the 
petition. This requirement implements Section 13.1 of the SCM 
Agreement. The Department will determine what weight to give to any 
information received during the course of such consultations on a case-
by-case basis.
    Other comments: One commenter argued that it was improper for a 
Department official to counsel a petitioner in preparing a petition and 
then, after the petition is formally filed, participate in an analysis 
of the adequacy of the petition. According to this commenter, such 
activity gives rise to an appearance of impropriety and violates the 
Department's own rules on ethical conduct. The commenter proposed a 
revision to Sec. 351.202 which would have (1) required the Department 
to disclose publicly the names of all Department personnel who assisted 
in the preparation of a petition; and (2) precluded any such official 
from participating in the relevant AD/CVD proceeding once the petition 
was filed.
    We have not adopted this comment, and we disagree strongly with its 
underlying premise. We do not believe that Department personnel lose 
their objectivity or impartiality regarding the merits of a petition 
when they have provided advice to a petitioner in the preparation of a 
petition. In addition, we do not believe that there is an appearance of 
impropriety or a violation of the Department's rules of ethical conduct 
when such personnel participate in an AD/CVD proceeding triggered by 
the filing of a petition with respect to which they may have offered 
pre-filing advice.
    The same commenter also suggested that the Department revise 
proposed Sec. 351.202(i)(2), which provides that, in the case of a CVD 
petition, the Department will invite the government of the exporting 
country involved for consultations under Article 13.1 of the SCM 
Agreement. Consistent with other comments made by this commenter based 
on its analysis of the statutory term ``country,'' the commenter 
suggested that the Department modify paragraph (i)(2) to provide that 
the Department also will invite for consultations the government of any 
political subdivision of a named country.
    We have not adopted this suggestion. Although there certainly are 
situations in which the statute treats political subdivisions as 
``countries,'' this is not one of those situations. Section 
702(b)(4)(A)(ii) of the Act refers to consultations with a ``Subsidies 
Agreement country.'' In our view, a state or provincial government does 
not meet the definition of ``Subsidies Agreement country'' in section 
702(b) of the Act.
    Moreover, under Article 13.1, the obligation of the United States 
is to consult with ``Members'' of the WTO, a term that excludes 
subnational governments, such as states and provinces. While the 
central government of a WTO Member may choose to be accompanied at 
consultations by representatives of subnational levels of government, 
the Department will not embroil itself in the internal politics of 
another country by inviting such representatives to participate in 
Article 13.1 consultations.
    Finally, one commenter proposed that the following sentence be 
added to proposed Sec. 351.202(c): ``Other filing requirements are set 
forth in Sec. 351.303.'' The purpose of this addition would be to put 
petitioners on notice as to the existence and location of distinct 
filing requirements. The Department agrees with this suggestion, and we 
have revised paragraph (c) accordingly.
    Other changes: In light of the recent reorganization of Import 
Administration, we have revised Sec. 351.202(h)(2) to provide that 
persons seeking information concerning petitions should contact Import 
Administration's Director for Policy and Analysis.

Section 351.203

    Section 351.203 deals with determinations regarding the sufficiency 
of an AD or CVD petition, and implements sections 702(c) and 732(c) of 
the Act. We received several comments regarding Sec. 351.203.
    Adequacy of allegations: Three commenters made suggestions relating 
to proposed Sec. 351.203(b)(1), which provides that ``the Secretary, on 
the basis of sources readily available to the Secretary, will examine 
the accuracy and adequacy of the evidence provided in the petition and 
determine whether to initiate an investigation.'' While these 
commenters agreed that proposed Sec. 351.203(b)(1) was consistent with 
the statute, they were concerned that the Department's commentary in 
the AD Proposed Regulations and/or the Department's practice was not. 
In the commentary, we described our prior practice in reviewing a 
petition and stated that this practice was consistent with the type of 
review contemplated by the new statute. In particular, we noted that it 
was the Department's practice to seek additional information when a 
particular allegation lacked sufficient support or appeared 
aberrational, even though the allegation was supported by some 
documentation. 61 FR at 7313.


---- page 27307 ----


    One of the three commenters, however, stated that the practice 
described amounted to the weighing of evidence, and that this practice 
is inconsistent with the legislative history of the Trade Agreements 
Act of 1979, a legislative history that the SAA endorsed. This 
commenter proposed that the 1979 legislative history be incorporated 
into Sec. 351.203(b)(1).
    The second of the three commenters also complained that the 
Department's commentary suggested the weighing of evidence, and 
disagreed that the Department's proposal was consistent with past 
practice. Asserting that the statute and legislative history do not 
envision an adversarial pre-initiation proceeding, this commenter 
proposed that the Department clarify that (1) it will not allow 
respondents to bring public information to the Department's attention 
for purposes of assessing the sufficiency of a petition; and (2) that 
the new regulations are not intended to increase the burden on 
petitioners for initiating investigations.
    The third of the three commenters agreed with proposed 
Sec. 351.203(b)(1) and the accompanying commentary, but alleged that 
over time, the Department has been subjecting petitioners to 
substantially increased demands for additional factual support. 
Therefore, while not suggesting any changes to Sec. 351.203(b)(1) or 
the commentary, this commenter suggested that the Department review its 
practice to ensure that that practice is consistent with the regulation 
and the commentary.
    We agree that the pre-initiation process should not become an 
adversarial process between the petitioner and potential respondents. 
On the other hand, however, the Department has a statutory obligation 
to examine the accuracy and adequacy of the evidence provided in the 
petition, an exercise which necessarily entails making some judgments 
regarding the quantity and quality of the information contained in a 
petition. Whether or not such an examination constitutes the ``weighing 
of evidence'' is, in our view, largely a question of semantics. 
However, we believe that the practice described in the commentary 
accompanying proposed Sec. 351.203(b)(1) does not result in an 
adversarial process and that this practice is consistent with the 
legislative history of the 1979 Act. That legislative history states, 
inter alia, that a petition must be ``reasonably supported by the facts 
alleged.'' H.R. Rep. No. 317, 96th Cong., 1st Sess. 51 (1979) (emphasis 
added). In our view, this means that the mere provision of any 
documentation is not necessarily sufficient, and the Department, where 
appropriate, should be able to seek additional information where 
support for a particular allegation is weak or information appears 
aberrational.
    Therefore, we have not changed proposed Sec. 351.203(b)(1) in light 
of these comments. However, we wish to reiterate what we said in the 
commentary accompanying proposed Sec. 351.203(b)(1); namely, that we do 
``not believe that the new statutory standard constitutes a significant 
departure from past Department practice.'' 61 FR at 7313.
    Sources readily available: Commenting on proposed 
Sec. 351.203(b)(1), one commenter suggested that the regulations make 
clear that ``sources readily available'' to the Department include any 
information that is relevant to its evaluation of a petition and that 
is submitted by an interested person further to the Department's 
request. We have not adopted this suggestion, because we prefer to 
develop our interpretation of this new statutory term on a case-by-case 
basis.
    The same commenter urged the Department to refrain from allowing a 
petitioner to comment on any pre-initiation submissions that a 
respondent interested party makes in response to a Department request. 
Presumably, this commenter was referring to the following statement in 
the preamble to the AD Proposed Regulations: ``The Department will give 
the petitioner an opportunity to comment on any such information 
acquired by the Department.'' 61 FR at 7313. We have not adopted this 
suggestion either, because we continue to believe that it is 
appropriate to provide a petitioner with an opportunity to comment on 
information collected during the pre-initiation process.
    Also in connection with proposed Sec. 351.203(b)(1), another 
commenter proposed that after the phrase ``sources readily available to 
the Secretary,'' the Department should add the following clause: 
``including information provided to the Department by foreign 
governments during the consultations required under 19 U.S.C. 
Sec. 1671a(b)(4)(A)(ii). * * *'' This commenter was referring to the 
pre-initiation consultations provided for in Article 13.1 of the SCM 
Agreement and referred to in section 702(b)(4)(A)(ii) of the Act. 
According to the commenter, the ``right to consult is meaningless if 
the Department were not to consider information provided in the 
consultations in making its decision whether to initiate an 
investigation and, if so, on what programs.'' Another commenter, 
however, opposed this suggestion, arguing that neither the statute nor 
the Department's practice concerning CVD petitions allows the 
Department to transform Article 13.1 consultations into pre-initiation 
litigation.
    While we have not adopted the suggestion, we do not disagree with 
the thrust of the first commenter's position. Under Article 13.1 of the 
SCM Agreement, foreign governments have a right to consultations prior 
to the initiation of an investigation. The purpose of these 
consultations is to clarify the matters referred to in a petition. The 
right to consultations is specifically provided for in 
Sec. 702(b)(4)(A)(ii) of the Act. We note that under Sec. 702(b)(4)(B), 
the Department is prohibited from accepting any unsolicited oral or 
written communication from potential respondents, except as provided 
for under the aforementioned provision of the Act requiring that 
foreign governments be given an opportunity for consultations. 
Therefore, we believe that the Department may consider relevant 
information provided by a foreign government prior to the initiation of 
an investigation. The use of such information and the weight given to 
it, either prior to the initiation decision or during an investigation, 
will be determined by the Department on a case-by-case basis.
    Industry support: Commenting on proposed Sec. 351.203(e)(1), one 
commenter suggested that when measuring domestic production as an index 
of industry support for a petition, the Department (1) never should 
measure production over a period of less than twelve months; and (2) 
should retain the flexibility to examine a period greater than twelve 
months in appropriate circumstances. A second commenter endorsed 
proposed Sec. 351.203(e)(1), arguing that the use of the word 
``normally'' in that provision provided the Department with the 
necessary flexibility to use periods greater or lesser than twelve 
months when appropriate.
    We have left Sec. 351.203(e)(1) unchanged. Because the statutory 
standard for determining industry support is new, we are reluctant to 
adopt a regulation that would preclude, in all cases, the use of a 
period shorter than twelve months. As observed by the second commenter, 
there may well be industries for which use of a shorter period is 
appropriate. While we expect that in most cases the Department will use 
a twelve-month period, use of the word ``normally'' provides us with 
sufficient flexibility to use longer or shorter periods when 
appropriate.


---- page 27308 ----


    One commenter suggested that the Department revise proposed 
Sec. 351.203(e)(3) to provide that: (1) the Department may base the 
position of workers on a statistically valid sampling of the views of 
individual workers; and (2) the views of workers and management be 
recorded in writing and certified in accordance with Sec. 351.303(g). A 
second commenter objected to these suggestions, arguing that (1) the 
first commenter's notion of sampling effectively would rewrite the 
statute; and (2) a separate certification requirement is unnecessary, 
because Sec. 351.303(g) already requires certification of submissions 
containing factual information.
    We have not adopted the first commenter's suggestions. With respect 
to sampling of individual workers, this suggestion would require a 
level of regulatory detail greater than what we consider to be 
appropriate at this time. The statute does provide for the use of 
statistically valid sampling methods to determine industry support, but 
only when there are a large number of producers in the relevant 
industry. In the AD Proposed Regulations, we deliberately refrained 
from elaborating on what is, for the Department, a new and untried 
method for determining industry support. For purposes of these final 
regulations, we continue to believe that we should develop this method 
on a case-by-case basis. With respect to the first commenter's 
suggestion regarding filing requirements for industry positions, we 
agree with the second commenter that the changes proposed are redundant 
and unnecessary.
    Another commenter sought clarification with respect to proposed 
Sec. 351.203(e)(3), a provision that states that the Secretary will 
accord equal weight to the positions of management and workers 
regarding a petition. The commenter stated that the 25 percent 
threshold for determining industry support should not be subject to 
Sec. 351.203(e)(3), apparently based on the commenter's belief that 
this provision somehow undermines the 25 percent threshold. A second 
commenter offered an interpretation of the first commenter's comment, 
and suggested, based on its interpretation, that the commenter's 
``complaint should be dismissed.''
    The first commenter did not seek a change to the regulation, and we 
do not believe that a change is necessary. However, the Department 
wishes to confirm that in situations where the views of the management 
and workers of a firm negate each other, the production of the firm in 
question will be included as part of the total production of the 
domestic like product for purposes of applying the 25 percent threshold 
in sections 702(c)(4)(A)(i) and 732(c)(4)(A)(i) of the Act.
    The same commenter also sought clarification that all interested 
parties would be given access to non-confidential information related 
to the positions of domestic producers and workers. With respect to 
this comment, the Department can confirm that public information (e.g., 
non-business proprietary information) concerning the positions of 
producers and workers will be included in the public record of an AD/
CVD proceeding. Under Sec. 351.104(b), the public record will be 
available to the public, including interested parties, for inspection 
and copying in Import Administration's Central Records Unit.
    Another commenter made some suggestions regarding proposed 
Sec. 351.203(e)(5), which deals with determinations of industry support 
in cases where the petitioner alleges the existence of a regional 
industry. This commenter proposed that in regional industry cases, the 
Department should (1) determine the position of all members of the 
national industry regarding the petition, initiate based upon support 
within the alleged region, but terminate the investigation for lack of 
interest if there is insufficient support from producers within the 
region or nation, as determined by the Commission in its preliminary 
determination; and (2) consult extensively with the Commission prior to 
initiation regarding the adequacy of the regional industry allegation 
and, if the Commission's advice is that the alleged region is 
questionable, advise the petitioner to withdraw the petition and refile 
it as a national case or with a more properly defined region. According 
to the commenter, such an approach is necessary (1) to address the 
``anomaly'' in the statute that arises when the Commission rejects a 
regional industry alleged in a petition; and (2) to ensure that 
allegations of regional industry in a petition are not used to 
circumvent the industry support requirements.
    A second commenter opposed these suggestions. First, this commenter 
noted, the statute addresses this very situation, because the statute 
expressly states that (1) the Department shall determine industry 
support based on production in the region alleged in the petition, and 
(2) the Department shall not reconsider a determination of industry 
support once it is made. Second, there is no ``anomaly'' limited to 
regional industry cases, because in any case, including a case in which 
the petitioner alleges a national industry, the Commission may define 
the relevant product in such a way that the scope of the relevant 
industry analyzed for injury purposes differs from the scope of the 
industry analyzed for purposes of determining industry support. Third, 
there is no basis for the Department to revisit its industry support 
determination based on the Commission's preliminary determination, 
because in its final determination the Commission may change the 
definition of the industry at issue yet again, or even revert back to 
the definition originally alleged in the petition. Finally, the second 
commenter suggested that the first commenter's concerns about 
circumvention were overblown, stating that the first commenter did not 
understand the difficulties involved in bringing a regional industry 
case.
    In light of these comments, and because the SAA is clear on this 
point, we have deleted paragraph (e)(5).
    Other comments: One commenter submitted a comment concerning 
proposed Sec. 351.203(c)(2), which requires that, after initiation of 
an investigation, the Secretary provide a public version of the 
petition to all known exporters who sell for export to the United 
States. Section 351.203(c)(2) makes an exception for situations where 
the number of exporters is ``particularly large.'' The commenter 
suggested that the Department should invoke the exception only in 
situations where the number of exporters is ``exceptionally large.'' We 
have not adopted this suggestion, because the phrase ``particularly 
large'' tracks the language of the SAA and the relevant provisions of 
the AD Agreement and the SCM Agreement.
    The same commenter also suggested that Sec. 351.203(c)(2) provide 
that, upon request, any exporter, producer, or importer of subject 
merchandise be provided, free of charge, with a public version of the 
petition. We have not adopted this suggestion, because Sec. 351.104(b) 
adequately deals with matters relating to access to the public record, 
including the public version of a petition.

Section 351.204

    Section 351.204 deals with issues relating to the time period and 
persons to be examined in an investigation, voluntary respondents, and 
exclusions. In the section title, we have substituted ``Time periods'' 
for ``Transactions'' to reflect more accurately the contents of 
Sec. 351.204.
    Period of investigation in AD investigations: In proposed


---- page 27309 ----


Sec. 351.204(b)(1), the Department revised the period of investigation 
(``POI'') for antidumping investigations. In the past, the Department 
normally used a six-month POI that ended with the month in which the 
petition was filed. 19 CFR Sec. 353.42(b)(1) (1995). In 
Sec. 351.204(b)(1), the Department expanded the POI from six months to 
four fiscal quarters (twelve months), with the exception of nonmarket 
economy cases. In addition, the Department provided that the POI would 
consist of the four most recently completed fiscal quarters as of the 
month preceding, instead of including, the month in which the petition 
was filed or in which the Secretary self-initiated an investigation. 
Finally, the Department preserved its discretion to use a different POI 
in appropriate circumstances.
    We received several comments concerning this change in the standard 
AD POI. One commenter, while approving the expansion of the POI to 
twelve months, objected to reliance upon fiscal quarters completed as 
of the month preceding the month in which a petition was filed. 
According to this commenter, domestic industries are badly buffeted by 
dumped imports at least up to the date of the filing of a petition. If 
the Department relied on completed fiscal quarters, however, it would 
ignore at least two months worth of dumping activity, activity that was 
automatically covered by the Department's former POI. In addition, this 
commenter asserted, the use of months, rather than fiscal quarters, 
``has worked well generally in the past and has not demonstrably been 
an impediment to verification.'' Therefore, this commenter proposed 
that the standard AD POI be the twelve-month period ending in the month 
of filing or self-initiation, and that respondents should have the 
burden of proving that a different POI is appropriate.
    A second commenter, on the other hand, generally supported the use 
of fiscal quarters, but believed that the Department should rely on 
completed quarters as of the end of the month of filing or self-
initiation. In addition, this commenter objected to the expansion of 
the POI from six months to twelve months, arguing that the Department 
had not explained the reasons for this expansion and that it appeared 
to be inconsistent with the Department's stated goal of easing 
reporting requirements and permitting more efficient verification.
    With respect to the expansion of the POI to twelve months, we 
believe that this expansion is required by Article 2.2.1, note 4 of the 
AD Agreement. Note 4 states: ``The extended period of time should 
normally be one year but shall in no case be less than six months.'' 
Although this statement is made in the context of analyzing sales below 
the cost of production, implicit in the statement is the assumption 
that the POI in an AD investigation normally will be one year. 
Therefore, we have not adopted the suggestion of the second commenter 
that we revert to a normal POI of six months.
    With respect to the use of completed fiscal quarters rather than 
months, while we do not dispute the first commenter's assertion that 
domestic industries may be buffeted by dumped imports in the months 
immediately preceding the filing of a petition, these imports would not 
be subject to antidumping duties, regardless of whether they were 
covered by the POI. Moreover, the timing of a petition filing often can 
address such concerns. In addition, we continue to believe that 
defining the POI in terms of completed fiscal quarters, rather than 
calendar months running from the date of filing, will generate 
considerable savings in time and money for both the Department and the 
parties involved in AD proceedings. Our experience is that a 
considerable amount of time is spent in reconciling AD submissions 
(that until now have been based on calendar months) to a firm's 
accounting records (that typically are based on fiscal quarters). 
However, we should emphasize that Sec. 204(b)(1) refers to the POI that 
the Secretary ``normally'' will use. Therefore, the Department retains 
the discretion to depart from its standard POI where warranted by the 
circumstances of a case.
    Finally, we are not adopting the suggestion that we base our POI on 
completed fiscal quarters as of the end of the month of filing or self-
initiation. In general, we believe that it is more appropriate to 
investigate only sales made prior to the filing of a petition to 
alleviate concerns about the effect of the petition on pricing 
practices.
    Period of investigation in CVD investigations: One commenter 
suggested that we retain the modifier ``normally'' in the second 
sentence of proposed Sec. 351.204(b)(2). According to this commenter, 
the Department should retain the flexibility to adopt as the POI the 
fiscal year of the foreign government or the main responding company.
    We have retained the word ``normally'' in the second sentence. 
However, we have changed the second sentence of Sec. 351.204(b)(2). 
Originally, this sentence would have required the Secretary to set the 
POI as the most recently completed calendar year, if the fiscal years 
of the government and the exporters or producers differed. This 
language did not correctly reflect our past practice, a practice that 
we do not wish to change. The new language simply deletes the reference 
to the government's fiscal year. Thus, the Department normally will set 
the POI according to the fiscal year of the individual exporters or 
producers. Only if the fiscal years of the exporters or producers 
differ, will the POI be the most recently completed calendar year. In 
the case of investigations conducted on an aggregate basis, the 
Department's normal POI will continue to be based on the most recently 
completed fiscal year for the government in question.
    Acceptance of voluntary respondents: Two commenters submitted 
virtually identical comments objecting to the requirement in proposed 
Sec. 351.204(d)(2) that a voluntary respondent submit a questionnaire 
response before the Department decides whether to examine the voluntary 
respondent individually. Citing the Department's AD investigation on 
Pasta from Italy, these commenters claimed that an exporter will not be 
willing to expend the time and financial resources required to prepare 
a questionnaire response without some prior assurance by the Department 
that it will conduct an individual examination of the firm. Therefore, 
they concluded, this requirement discourages voluntary responses and, 
thus, violates Article 6.10.2 of the AD Agreement.
    To remedy this alleged violation of international law, the 
commenters proposed that the Department require only that any exporter 
not selected as a mandatory respondent submit a letter if it is 
interested in submitting a voluntary response. Based on these letters, 
the Department would decide which, if any, voluntary respondents it 
would examine. Only after being selected would voluntary respondents be 
required to submit questionnaire responses.
    We have not adopted this suggestion, because the approach that the 
commenters objected to is made necessary by the requirements of 
sections 777A(c)(2)(B) and 782(a) of the Act. Where the Department does 
not examine all known producers and exporters, it often selects for 
examination all producers or exporters ``that can be reasonably 
examined'' in accordance with the requirements of section 777A(c)(2)(B) 
of the Act. The selected producers and exporters in this group normally 
represent the largest number of respondents the Department believes it 
can examine at that time. The Department normally will decide the 
number of selected respondents very early in the proceeding; i.e., 
before it


---- page 27310 ----


issues questionnaires to the selected respondents. Therefore, it 
frequently is the case that the Department cannot make a determination 
as to whether additional voluntary respondents can be reasonably 
examined until after the deadline for questionnaire responses has 
passed (e.g., one or more selected respondents have not responded). If 
the additional voluntary respondents did not begin to prepare their 
questionnaire responses until after the Department received 
questionnaire responses from the selected respondents, the Department 
would not be able to complete the investigation or review within the 
statutory deadlines. Therefore, additional voluntary respondents must 
submit the complete questionnaire response by the deadlines in 
accordance with section 782(a) of the Act. In addition, we do not 
believe that section 782(a) ``discourages'' voluntary responses within 
the meaning of Article 6.10.2. Instead, it simply recognizes the 
constraints on the Department's resources that must be taken into 
account in determining whether we can accept a voluntary response. In 
order to help potential voluntary respondents decide, prior to 
acceptance as a respondent, whether to submit a questionnaire response, 
we intend to accept voluntary responses based on the order in which 
written requests to be accepted as voluntary respondents are submitted. 
In those instances where we can make earlier determinations to accept 
voluntary responses, we will do so.
    One commenter submitted a comment suggesting that Sec. 351.204 be 
amended to incorporate requests by voluntary respondents to be included 
in the pool of companies investigated in cases conducted on an 
``aggregate'' basis. We have not adopted this suggestion, because under 
the statute, only CVD investigations are to be conducted on an 
``aggregate basis,'' and it is clear from the comment that the 
commenter was addressing AD investigations.
    Voluntary respondents and the all-others rate: Proposed 
Sec. 351.204(d)(3) provided that in calculating an all-others rate, the 
Secretary will exclude weighted-average dumping margins or 
countervailable subsidy rates calculated for voluntary respondents. In 
the preamble to the AD Proposed Regulations, the Department explained 
that the purpose of this provision was to prevent manipulation and to 
maintain the integrity of the all-others rate. One commenter argued 
that this provision is inconsistent with the statute and should be 
deleted.
    We do not agree with this comment, and have retained the rule as 
drafted. The statute does not define the term ``investigated'' and does 
not directly address the question of whether voluntary respondents 
should be considered to be part of the Department's investigation. 
Because the statute does not resolve the issue, we look to the AD 
Agreement for guidance as to the best interpretation of the Act, in 
keeping with the requirement that, to the extent possible, a statute be 
interpreted in a manner consistent with the international obligations 
of the United States.
    Article 9.4 of the AD Agreement provides that the duties applied to 
``exporters or producers not included in the examination'' (i.e., 
``all-others'') may not exceed the weighted-average margin for the 
``selected exporters or producers.'' This implies that those exporters 
or producers not ``selected'' are not considered to be included in the 
``examination.'' Therefore, the better interpretation of section 
735(c)(5) is that producers who are not ``selected'' by the Department 
(i.e., voluntary respondents) are not considered to have been 
``examined'' (i.e., investigated), so that their margins should not 
contribute to the ``all-others'' rate. In effect, the Department 
conducts parallel proceedings for voluntary respondents.
    As we noted in the preamble to the AD Proposed Regulations, 
exclusion of voluntary respondents from the determination of the all-
others rate serves the obvious purpose of preventing distortion or 
outright manipulation of the all-others rate. The producers or 
exporters most likely to submit voluntary responses are those with 
reason to believe that they will obtain a lower margin by volunteering 
than they would obtain by being subject to the all-others rate. 
Inclusion of rates determined for voluntary respondents thus would be 
expected to distort the weighted-average for the respondents selected 
by the Department on a neutral basis.
    Exclusions: In the AD Proposed Regulations, 61 FR at 7315, the 
Department requested additional public comment on the issue of whether 
there should be special exclusion rules for firms, such as trading 
companies, that export, but do not produce, subject merchandise. We 
noted that one alternative would be to limit the exclusion of a 
nonproducing exporter to the subject merchandise produced by those 
producers that supplied the exporter during the period of 
investigation. Several commenters supported this approach, citing the 
potential for other producers to avoid the imposition of duties by 
selling through an excluded exporter. Other commenters argued that if 
an exporter is excluded, the exclusion should apply to all exports by 
that exporter, regardless of the producer.
    The Department agrees with the first group of commenters that 
normally the exclusion of a nonproducing exporter should be limited. 
Therefore, we have added a new paragraph (e)(3) to provide that the 
exclusion of a nonproducing exporter normally will be limited to 
subject merchandise produced or supplied by those companies that 
supplied the exporter during the period of investigation.
    In an AD investigation, the Secretary may grant an exclusion to a 
nonproducing exporter if the Secretary investigates the exporter's 
sales and determines that the dumping margins on those sales are not 
greater than de minimis. However, to prevent other producers from 
selling through an excluded exporter in order to avoid the imposition 
of duties, the Secretary normally will apply the exclusion only to the 
exporter's exports of subject merchandise purchased from those 
producer(s) found by the Secretary to lack knowledge of the exportation 
of the merchandise to the United States. This limitation is 
appropriate, because the lack of knowledge by these producers provided 
the basis for investigating and establishing a rate for the exporter.
    In a CVD investigation, the basis for the exclusion of a 
nonproducing exporter is that neither the exporter nor the producers or 
suppliers of subject merchandise sold by the exporter received more 
than de minimis net countervailable subsidies. Therefore, it is 
appropriate to limit the exclusion to merchandise purchased from the 
same suppliers and producers.
    With respect to requests for exclusion in a CVD investigation 
conducted on an aggregate basis, we have renumbered paragraph (e)(3) as 
paragraph (e)(4), and we have revised paragraph (e)(4)(iv) to clarify 
that in the case of a non-producing exporter, the foreign government 
must certify that neither the exporter nor the exporter's supplier 
received more than de minimis countervailable subsidies during the 
review period.
    One commenter proposed that (1) the regulations make clear that the 
Department has the authority to ``bring back'' under an order an 
excluded company if the Department subsequently finds in a review that 
the company is dumping, and (2) the regulations retain the requirements 
of Secs. 353.14 and 355.14 of the Department's prior regulations. 
According to the commenter, the Department required a company with a


---- page 27311 ----


zero or de minimis dumping margin or CVD rate to certify that the 
company would not dump or receive countervailable subsidies in the 
future. The commenter contended that this certification authorized the 
Department to review excluded firms to confirm that they were acting in 
a manner consistent with the certification. In addition, this commenter 
claimed that because AD/CVD orders apply to countries, rather than to 
individual companies, the Department has the authority to review 
excluded companies.
    We have not adopted these suggestions. With respect to the notion 
of ``bringing back'' excluded companies, as a matter of administrative 
practice, the Department never has reviewed sales of excluded 
companies, with the exception of situations in which nonexcluded 
companies attempt to funnel their ``non-excluded'' merchandise through 
an excluded company. There is no indication in either the statute or 
the SAA that Congress intended the Department to make such a radical 
departure from its prior practice concerning exclusions. Moreover, we 
believe that the ``inclusion'' of an excluded company would be 
inconsistent with Article 5.8 of the AD Agreement and Article 11.9 of 
the SCM Agreement (both of which require termination where the amount 
of dumping or subsidization is de minimis).
    As for former Secs. 353.14 and 355.14, with the exception of CVD 
investigations conducted on an aggregate basis, these provisions are no 
longer necessary in light of the amendments to the statute made by the 
URAA, and, in any event, never functioned in the manner suggested by 
the commenter. These provisions, notwithstanding their titles, 
functioned as a mechanism for considering requests by voluntary 
respondents to be investigated. As stated by the Department when it 
adopted Sec. 351.14:

    If the Department includes a producer or reseller in its 
investigation and determines that the producer or reseller had no 
dumping margin during the period of investigation, the Department 
would automatically exclude that producer or reseller from the 
antidumping duty order, even if the producer or reseller did not 
request exclusion under the procedures described in [Sec. 353.14]. 
The purpose of this section merely is to provide an opportunity for 
producers and resellers that the Department might not otherwise 
include in its investigation to request that the Department 
specifically include and investigate them.

Final Rule (Antidumping Duties), 54 FR 12742, 12748 (1989). The 
Department made a virtually identical statement with respect to 
Sec. 355.14. Final Rule (Countervailing Duties), 53 FR 53206, 52316 
(1988).
    Given their original purpose, Secs. 353.14 and 355.14 have become 
superfluous in light of section 782(a) of the Act and Sec. 351.204(d) 
(which establish new procedures for dealing with voluntary respondents) 
and Sec. 351.204(e)(3) (which deals with exclusion requests in CVD 
investigations conducted on an aggregate basis). Under these 
provisions, decisions on exclusions will be based on a firm's actual 
behavior, as opposed to assertions regarding its possible future 
behavior.
    Other comments: One commenter suggested that Sec. 351.204 be 
modified to state explicitly that the Department retains the right to 
seek and obtain information from importers in the United States of 
subject merchandise. We have not adopted this suggestion. While we do 
not disagree with the proposition that the Department may seek 
information from importers, we also do not believe that there is any 
doubt concerning the Department's authority to seek such information. 
Therefore, we do not feel that the suggested modification is necessary.

Section 351.205

    Section 351.205 deals with preliminary AD and CVD determinations. 
Two commenters noted that, in connection with proposed Sec. 351.205(c), 
the Department deleted (1) the requirement that a preliminary 
determination include the factual and legal conclusions for the 
Department's determination, and (2) the requirement that the Department 
notify the parties to the proceeding. They suggested that paragraph (c) 
be revised so as to include these requirements.
    While we do not disagree with the substance of the comments, we do 
not believe that a revision to paragraph (c) is appropriate. Section 
777(i) of the Act requires the Department to include its factual and 
legal conclusions in a preliminary determination, and sections 703(f) 
and 733(f) of the Act require the Department to notify the petitioner 
and other parties to an investigation. Therefore, given our overall 
approach of avoiding repetitions of the statute, we have not made the 
revisions suggested.

Section 351.206

    Section 351.206 deals with critical circumstances findings. In 
connection with Sec. 351.206, one commenter sought clarification that 
provisional measures would not be imposed on merchandise imported prior 
to the date of initiation of an AD or CVD investigation. We can confirm 
that provisional measures will not be imposed on merchandise entered 
prior to the date of initiation. Section 351.206(d), which deals with 
retroactive suspension of liquidation, refers to sections 703(e)(2) and 
733(e)(2) of the Act. These sections provide that suspension of 
liquidation may not apply to merchandise entered prior to the date on 
which notice of the determination to initiate is published in the 
Federal Register. See also SAA at 878.

Section 351.207

    Section 351.207 deals with the termination of investigations. We 
received several comments regarding Sec. 351.207 from one commenter.
    First, the commenter objected to the proviso in Sec. 351.207(b)(1) 
that the Secretary may terminate an investigation if ``the Secretary 
concludes that termination is in the public interest.'' The commenter 
argued that because the relevant provisions of the statute do not 
require a public interest finding, the regulations should not enlarge 
upon the statutory criteria.
    We have not adopted this suggestion, because the legislative 
history of the Trade Agreements Act of 1979 indicates that Congress 
intended that the Secretary make a public interest finding before 
terminating a self-initiated investigation or an investigation in which 
a petition is withdrawn. See, e.g., Trade Agreements Act of 1979 
Statements of Administrative Action, H.R. Doc. No. 153, Pt. II, 96th 
Cong., 1st Sess. 400, 418 (1979); and S. Rep. No. 249, 96th Cong., 1st 
Sess. 54, 70-71 (1979). We believe that this legislative history 
remains relevant in interpreting the post-URAA version of the Act. 
Moreover, there is no indication in the legislative history of the URAA 
that Congress intended that the Department abandon the requirement of a 
public interest finding.
    Second, in connection with Sec. 351.207(c), the commenter suggested 
that the Department clarify that its authority to terminate an 
investigation due to lack of interest is unaffected by those statutory 
provisions prohibiting the post-initiation reconsideration of industry 
support for a petition. We have not adopted this suggestion, because, 
as the Department stated in the AD Proposed Regulations, 61 FR at 7315, 
the SAA is clear on this point.
    Finally, in connection with Sec. 351.207(b)(2), the commenter 
suggested that in light of the prohibition against voluntary export 
restraints found in the WTO Agreement on Safeguards, the Department 
should exercise sparingly its discretion to terminate an investigation 
based on a


---- page 27312 ----


foreign government's agreement to limit the volume of imports of 
subject merchandise into the United States. The commenter did not 
suggest any modifications to Sec. 351.207(b)(2), and we have left that 
provision unchanged.

Section 351.208

    Section 351.208 deals with suspension agreements and suspended 
investigations. Most of the comments we received regarding Sec. 351.208 
dealt with our proposed deadlines for initialing and signing suspension 
agreements.
    Deadlines: In proposed Sec. 351.208(f)(1)(i), we advanced the 
deadline for submitting a proposed suspension agreement to 15 days 
after a preliminary determination in an AD investigation and 5 days 
after a preliminary determination in a CVD investigation. As explained 
in the AD Proposed Regulations, the purpose of this change was to 
reduce burdens on all parties and Department staff. 61 FR at 7316. 
Public reaction to this change in deadlines was mixed, cutting across 
respondent/domestic industry lines.
    On the domestic industry side, one commenter strongly supported the 
change, while another commenter thought the AD deadline too short. On 
the respondent side, one commenter supported the change, but three 
commenters considered the revised deadline to be too short.
    After careful consideration of these comments, we have left the 
deadlines as set forth in proposed Sec. 351.208(f)(1)(i). Several of 
the commenters seeking a longer deadline argued that exporters are not 
in a position to consider whether or not they desire to propose a 
suspension agreement until the preliminary determination has been 
issued. We can understand why respondent interested parties might wish 
to see the results of a preliminary determination before formally 
submitting a proposed suspension agreement. However, in our view, a 
respondent interested party that is entertaining a suspension agreement 
as an option may begin its deliberations as soon as the Department 
initiates an investigation instead of waiting until the Department 
issues a preliminary determination. If a respondent interested party 
begins its deliberations early, we believe that the deadlines set forth 
in Sec. 351.208(f)(1)(i) provide sufficient time in which to digest the 
results of a preliminary determination.
    We received other comments regarding deadlines, in addition to 
those described above. One commenter suggested that the Department give 
itself authority to extend the deadlines where necessary. We agree with 
this suggestion, but note that it already is addressed by 
Sec. 351.302(b), which provides the Secretary with authority to extend, 
for good cause, any time limit established by part 351.
    Another commenter suggested that in order to provide the Department 
with more flexibility, the deadlines should run from the date of 
publication of a preliminary determination instead of the date of 
issuance. We have not adopted this suggestion. In order to accomplish 
our objective of reducing burdens, we deliberately chose the date of 
issuance, because one week can elapse between the date of issuance and 
the date of publication in the Federal Register. However, we believe 
that Sec. 351.302(b), discussed in the preceding paragraph, addresses 
the commenter's concerns, because it permits the Secretary to extend a 
deadline for good cause.
    Another commenter suggested that if the deadline for submitting 
proposed suspension agreements in CVD investigations remains at 5 days 
from the preliminary determination, the timeframe should be modified to 
5 business days, excluding applicable foreign holidays. We have adopted 
this suggestion in part by changing the deadline from 5 days to 7 days. 
However, we have not adopted the suggestion concerning the exclusion of 
foreign holidays. If, in a particular case, the occurrence of a foreign 
holiday should make this deadline unworkable, this is something that 
the Secretary could consider under the extension authority of 
Sec. 351.302(b).
    Suspension agreement procedures: We received several comments 
concerning the procedures to be followed in entering into a suspension 
agreement. One commenter, arguing that current procedures deprive 
petitioners of meaningful input, suggested that the Department amend 
Sec. 351.208(f)(1) to: (1) require the foreign exporters or foreign 
government to serve a copy of the proposed suspension agreement on the 
petitioner at the same time that it is submitted to the Department; (2) 
require the Department thereafter to consult with all parties and to 
request written comments from all parties regarding the terms of the 
agreement and whether the agreement is in the public interest; and (3) 
require the Department to consider domestic industry opposition to a 
suspension agreement as a strong indicator that the agreement is not in 
the public interest.
    Before addressing the specific suggestions, we should note at the 
outset that, in our view, the Department's existing procedures have not 
denied petitioners meaningful input regarding decisions to enter into 
suspension agreements. Department precedents offer numerous examples of 
revisions to proposed suspension agreements that the Department has 
made in response to petitioners' comments. While the Department may not 
always agree with all of a petitioner's comments, this does not mean 
that the Department has not carefully considered those comments.
    As for the specific suggestions, we have not adopted them for the 
following reasons. With respect to the suggestion that the party 
proposing a suspension agreement serve a copy on the petitioner, we 
note that sections 704(e) and 734(e) of the Act contemplate that the 
Department will notify the petitioner of a proposed suspension 
agreement and provide the petitioner with a copy of the proposed 
agreement at the time of notification. In our experience, this process 
has worked well in the past and there is no need to change it at this 
time. With respect to the suggestion that the Department consult with, 
and request written comments from, all parties, sections 704(e)(1) and 
734(e)(1) require the Department to consult on