[Federal Register Volume 75, Number 156 (Friday, August 13, 2010)]
[Notices]
[Pages 49475-49481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-20076]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-504]
Petroleum Wax Candles From the People's Republic of China:
Preliminary Results of Request for Comments on the Scope of the
Petroleum Wax Candles From the People's Republic of China Antidumping
Duty Order
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: On August 21, 2009, the Department solicited comments from the
general public on the best method to consider whether novelty \1\
candles should or should not be included within the scope of the Order
\2\ given the extremely large number of scope determinations requested
by outside parties. See Petroleum Wax Candles from the People's
Republic of China: Request for Comments on the Scope of the Antidumping
Duty Order and the Impact on Scope Determinations, 74 FR 42230 (August
21, 2009). The general public was given two options (as well as the
choice to submit additional options and ideas):
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\1\ The term ``novelty candle,'' as defined in Scope Comments
and prior scope rulings, refers to candles that are in the shapes of
identifiable objects, or are holiday-themed.
\2\ See Antidumping Duty Order: Petroleum Wax Candles from the
People's Republic of China, 51 FR 30686 (August 28, 1996)
(``Order'').
Option A: The Department would consider all candle shapes
identified in the scope of the Order (i.e., tapers, spirals, and
straight-sided dinner candles; rounds, columns, pillars, votives;
and various wax-filled containers) to be within the scope of the
Order, regardless of etchings, prints moldings or other artistic or
decorative enhancements, including any holiday-related art. All
other candle shapes would be considered outside of the scope of the
Order.
Option B: The Department would consider all candle shapes,
including novelty candles, to be within the scope of the Order,
including those not in the shapes listed in the scope of the Order,
as that is not an exhaustive list of shapes, but simply an
illustrative list of common candle shapes.
The Department received comments from interested parties by the
appropriate deadline. In examining these comments and the
administrative
[[Page 49476]]
record since the less-than-fair value (``LFTV'') antidumping duty
investigation, we have preliminarily developed a new interpretation for
interpreting candle scope ruling requests. Moreover, we have
preliminarily applied this new interpretation to all 388 pending scope
determinations under the Order. See infra.
DATES: Parties may submit comments no later than 30 calendar days after
date of publication of this notice and rebuttal comments 10 calendar
days later.
FOR FURTHER INFORMATION CONTACT: Tim Lord, AD/CVD Operations, Office 9,
Import Administration, U.S. Department of Commerce, 14th Street &
Constitution Ave., NW., Washington, DC 20230, telephone: (202) 482-
7425.
Comments From Interested Parties
On September 16, 2009, the Department received comments from the
following interested parties: The National Candle Association
(``NCA''); the National Retail Federation (``NRF''); HSE USA, Inc.
(``HSE''); Universal Candle Company (``UC''); Sourcing International
(``SI''); the Retail Industry Leaders of America (``RILA''); and Trade
Associates Group, Ltd. (``TAG'').
Support for Option A \3\
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\3\ With Option A, the Department would consider all candle
shapes identified in the scope of the Order, (i.e., tapers, spirals,
and straight-sided dinner candles; rounds, columns, pillars,
votives; and various wax-filled containers) to be within the scope
of the Order, regardless of etchings, prints, moldings or other
artistic or decorative enhancements including any holiday-related
art. All other candle shapes would be considered outside the scope
of the Order.
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NRF and SI urge the Department to adopt Option A in its un-altered
form. NRF argues this option is most consistent with the original scope
of the case that retailers have operated under for over 20 years. HSE
argues that Option A is the best way to ensure that the scope
interpretation be ``shape-based.'' That is, HSE maintains, Option A
will guarantee that only candles in the shapes specifically enumerated
in the scope of the Order--tapers, spirals, straight-sided dinner
candles; rounds, columns, pillars; votives; and various wax-filled
containers (``the enumerated shapes'')--be considered as within the
scope. HSE also argues that the current scope language is exhaustive,
not illustrative, and that Option A recognizes this fact.
Support for Option B \4\
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\4\ With Option B, the Department would consider all candle
shapes, including novelty candles, to be within the scope of the
Order including those not in the shapes listed in the scope of the
Order, as that is not an exhaustive list of shapes, but simply an
illustrative list of common candle shapes.
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UC specifically states that it is in favor of Option B, though it
requests that its birthday and cake-top candles be considered outside
of the scope because there is no domestic production of these candles.
Additional Proposals
NCA proposes a combination of Options A and B whereby all candle
shapes, regardless of embellishment or holiday theme, would be included
within the scope of the Order.
RILA argues that because much of the debate over what is or is not
a holiday candle centers on what symbols or objects are specific to a
holiday and how obvious those symbols or objects must be on the candle,
the Department should develop objective criteria from prior rulings.
Such criteria might include a list of symbols and objects that are
specific to a holiday and numerical standards for what portion of the
candle surface must be covered by such symbols. RILA also maintains the
Department should engage more closely with U.S. Customs and Border
Protection (``CBP'') to ensure that there is an accurate and consistent
understanding of the scope of the Order and any guidelines established
by the Department.
TAG argues that neither option should be chosen, and that the
Department's current practices should remain in effect. However, TAG
maintains, the current practice that candles be recognizable from
multiple angles is overly formalistic, and thus the identifiable object
exception should be based on ``realistic guidelines.''
NRF asserts that the Department should adopt some practices used by
CBP, including having a designated Department employee whom importers
can call to discuss scope issues.
SI and NCA argue that the Department's regulations be amended to
allow the Department to issue summary determinations so that the
Department could issue a single ruling when there are multiple requests
for what is essentially the same product. For instance, if an importer
requests scope determinations on 25 pillar candles that differed only
in their size, the Department would be able to issue one summary scope
determination instead of 25.
Other Issues Raised by Parties
Although NRF requests that we choose Option A, it also argues that
the choice of either option would cause the Department to have to
address prior decisions where items that have been previously found to
be within the scope of the Order would now be considered outside the
Order, and vice-versa for items previously found to be outside the
scope of the Order.
NCA asserts that the novelty candle exclusion established in the
CBP Notice \5\ was baseless. NCA also maintains that the Department's
LTFV investigation and the Antidumping Petition \6\ did not exclude any
petroleum wax candles from the scope of the investigation requested.
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\5\ The CBP Notice is discussed infra.
\6\ The Antidumping Petition is discussed infra.
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HSE argues that the Department's should abandon the ``JC Penney
methodology,'' \7\ because this interpretation no longer considers the
shape of the candle to be dispositive in determining whether it is
covered by the scope, and should return to its prior practice of
looking at the shape of the candle in evaluating the scope. HSE
continues that the JC Penney methodology disregarded the history of the
case and has also proven to be extremely burdensome by increasing the
number of candle scope ruling requests.
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\7\ The JC Penney ruling and JC Penney methodology are discussed
infra.
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Background of the Order
In determining whether it is appropriate to formulate a new
interpretation for interpreting the scope of this Order, the Department
must examine documents from the LFTV investigation and subsequent
segments of this proceeding to understand the validity of its current
practices and to re-examine the products originally covered by the
scope of the LTFV investigation. See 19 CFR 351.225(k)(1). In
particular, the Department puts much weight on the original intent of
the injured domestic industry, in this case, represented by NCA. Below
is the Department's analysis of these documents, which are included in
the Memorandum to the File through Alex Villanueva, Program Manager,
from Tim Lord, Case Analyst, Certain Petroleum Wax Candles from the
People's Republic of China: Placing Documents on the Record (August 9,
2010) (``Relevant Documents Memorandum'').
Petition
The Petition illustrates that, contrary to its current assertions,
NCA advocated for an exhaustive scope where those candles not
specifically enumerated in the scope language, as well as figurine
candles, ``household,'' ``utility,'' or ``emergency'' \8\ candles, were
to be
[[Page 49477]]
excluded from the investigation. For instance, when discussing its
choice of a surrogate country, NCA states, ``Korea was deemed a poor
choice as a surrogate because its primary domestic production of
candles consists of types of candles which are not similar to candles
exported by the PRC. Korea produces mostly small, plain, white utility
candles and hand-crafted novelty candles.'' See Antidumping Petition
Submitted on Behalf of the National Candle Association in the Matter
of: Petroleum Wax Candles from the People's Republic of China
(September 3, 1985) (``Petition'') at 14; see also Relevant Documents
Memorandum, at Tab A.
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\8\ Those candles known as ``household,'' ``utility,''
``emergency,'' or ``household emergency candles'' will be termed
``utility candles'' for purposes of this notice.
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Additionally, NCA via a consulting firm, requested information from
a market research firm in Malaysia on producers' prices for candles
made and sold in Malaysia and stated that the candles they were
concerned with were ordinary candles. NCA's consulting firm noted that
they were uninterested in those candles not in the enumerated shapes.
See Petition, at Exhibit 21; see also Relevant Documents Memorandum, at
Tab A. Additionally, the Petition's like product definition itself
indicates exclusivity:
The imported PRC candles are made from petroleum wax and contain
fiber or paper- cored wicks. They are {emphasis added{time} sold in
the following shapes: tapers, spirals, and straight-sided dinner
candles; rounds, columns, pillars; votives; and various wax filled
containers. These candles may be scented or unscented. While
manufactured in the PRC, these candles are marketed in the United
States and are generally used by retail consumers in the home or
yard for decorative or lighting purposes.''
See Petition, at 6-7; see also Relevant Documents Memorandum, at Tab A.
Initiation
The Initiation used language virtually identical to NCA's like
product description:
The products covered by this investigation are certain scented
or unscented petroleum wax candles made from petroleum wax and
having fiber or paper-cored wicks. They are sold in the following
shapes: tapers, spirals, and straight-sided dinner candles; rounds,
columns, pillars; votives; and various wax-filled containers. The
products are classified under the Tariff Schedules of the United
States (TSUS) item 755.25, Candles and Tapers.
See Petroleum Wax Candles From the People's Republic of China;
Initiation of Antidumping Duty Investigation, 50 FR 39743 (September
30, 1985) (``Initiation''); see also Relevant Documents Memorandum at
Tab B.
ITC Preliminary Results
The description of the International Trade Commission's (``ITC'')
like product was nearly the same as NCA's like product definition and
the Initiation. The ITC was silent with regard to novelty candles,
although it devotes some discussion to Christmas candles.\9\ However,
as noted infra, the ITC stated that there was no clear definition of a
``Christmas/seasonal candle'' and used candle color (red, white, or
green) as an indicator of whether a candle is a Christmas/seasonal
candle or not. Thus, the ITC Preliminary Results are not dispositive
with regard to novelty candles based on shape or seasonal nature.
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\9\ The ITC deems the term ``Christmas candle'' as synonymous
with ``seasonal candle'' and uses the terms interchangeably. For the
purposes of this notice, the Department will use the term
``Christmas/seasonal'' to refer to this type of candle. No other
holidays or special events are mentioned or equated with the term
``seasonal.'' See Candles from the People's Republic of China:
Determination of the Commission in Investigation No. 731-TA-282
(Preliminary) Under the Tariff Act of 1930, Together with the
Information Obtained in the Investigation, USITC Publication 1768
(October, 1985) (``ITC Preliminary Results'') at A-22; see also
Relevant Documents Memorandum at Tab C.
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DOC Preliminary Results
The Department's scope of the investigation remained unchanged from
the Initiation, and novelty candles are not mentioned. See Petroleum
Wax Candles From the People's Republic of China; Preliminary
Determination of Sales at Less Than Fair Value, 51 FR 6016 (February
19, 1986) (``DOC Preliminary Results''); see also Relevant Documents
Memorandum at Tab D.
Memorandum Dated October 2, 1986
Further insight into which candles NCA originally intended to be
outside the scope of the investigation is found in a Departmental
memorandum dated October 2, 1986. In this memorandum, the Department
notes that on February 20, 1986 the Department issued instructions to
the U.S. Customs Service (``Customs'') \10\ suspending liquidation on
merchandise covered under Tariff Schedules of the United States
(``TSUSA'') item 755.25, a basket category which included numerous
different types of candles. The memorandum details subsequent
clarifications issued after the initial February 20, 1986 instructions
to the U.S. Customs Service:
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\10\ On July 28, 2006, the United States Customs Service since
was renamed as the United States Bureau of Customs and Border
Protection. See Homeland Security Act of 2002, Public Law 107-296,
Sec. 1502, 116 Stat. 2135, 2308-09 2002); Reorganization Plan
Modification for the Department of Homeland Security, H.R. Doc. No.
108-32, at 4 (2003).
Subsequent telephone complaints by some importers prompted
another telex to customs on March 20, 1986, in which `candles not
described above, such as birthday, birthday numeral, and figurine-
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type candles,' are also outside the scope of this investigation.
See Memorandum to Bill Matthews through Bob Marenick from Elena
Gonzalez, Subject: Scope of Investigation, Petroleum Wax Candles from
the People's Republic of China (October 2, 1986) (``Memorandum Dated
October 2, 1986''); see also Relevant Documents Memorandum at Tab E.
Memorandum Dated April 30, 1986
A memorandum dated April 30, 1986, describes two conversations
between the Department and NCA's counsel that illustrates that NCA did
not intend for the scope of the Order to cover all petroleum wax
candles:
On March 20, 1986, Mr. Randolph Stayin of Taft, Stettinus &
Hollister, who represents the petitioner, advised by telephone that
candles described as household candles, household emergency candles,
or utility candles, which are white in color and 5'' long x \3/4\''
diameter, do not fit the product description included in this
petition and are therefore outside the scope of this investigation.
Earlier, Ann King, of the same law firm, had told me that
birthday candles, birthday numeral candles and figurine-type candles
are also outside the scope of this investigation.
See Memorandum to the File, from Michael Ready, Subject: Petroleum Wax
Candles from the PRC--Scope of the Investigation (April 30, 1986)
(``Memorandum Dated April 30, 1986''); see also Relevant Documents
Memorandum at Tab F.
Scope Clarification Communication
Following the communications with NCA described above, the
Department sent a telex to the U.S. Customs Service clarifying the
scope of products subject to the LTFV investigation on March 20, 1986.
See Communication to All U.S. Customs Field Officers from John Durant,
Acting Director, Commercial Compliance Division: Petroleum Wax Candles
from the People's Republic of China: Clarification of Scope of
Investigation (``Scope Clarification Communication''):
1. The scope of Investigation as defined in the Federal Register
(February 19, 1986, page 6016) and referenced in our February 20,
1986 telex is as follows: `Scope of Investigation: The products
covered by this investigation are certain scented or unscented
petroleum wax candles made from petroleum wax and having paper or
fiber-cored wicks. They are sold in the following
[[Page 49478]]
shapes: tapers, spirals, and straight-sided dinner candles, rounds,
columns, pillars, votives, and various wax-filled containers. The
products are classified under the Tariff Schedules of the United
States (TSUS) Item 755 25, Candles and Tapers.' 2. Candles not
described above, such as birthday, birthday numeral, and figurine
type candles are outside the scope of this investigation.
See Scope Clarification Communication; see also Relevant Documents
Memorandum at Tab G.
The Memorandum dated October 1986, indicates that conversations
between the Department and importers were an impetus for the exclusions
of the Scope Clarification Communication, and the timing of
communications with NCA (detailed in the Memorandum Dated April, 1986)
indicate that NCA endorsed these exclusions. However, while the
Department adhered to NCA's opinion that candles not in the enumerated
shapes and birthday candles were not covered by the scope of the
investigation, it did not specifically state in the Scope Clarification
Communication that utility candles were not covered.
DOC Final Results
The scope of the Order listed in the DOC Final Results is the same
as that of the Initiation. See Petroleum Wax Candles From the People's
Republic of China: Final Determination of Sales at Less Than Fair
Value, 51 FR 25085 (July 10, 1986) (``DOC Final Results''); see also
Relevant Documents Memorandum at Tab H. Record evidence that NCA did
not intend for certain candles to be covered can also be seen in the
DOC Final Results. Specifically, when addressing respondents' comment
that the Department should not have excluded candle imports from
Jamaica in determining foreign market value, we defend our position by
stating, ``At the preliminary determination we excluded imports from
Jamaica from consideration because we received information from
petitioner that the Jamaican candles were `household candles' not
subject to this investigation.'' See Relevant Documents Memorandum at
Tab H.
ITC Final Results
The ITC lists ``novelties'' as among the types of candles it
analyzed, although it gives no definition of the term. See
Determination of the Commission in Investigation No. 731-TA-282 (Final)
Under the Tariff Act of 1930, Together With the Information Obtained in
the Investigation, USITC Publication 1888 (August, 1986) (``ITC Final
Results'') at A-6; see also Relevant Documents Memorandum at Tab I.
The ITC also included Christmas/seasonal candles as among the types
of candles it analyzed, and in response to respondents' contention that
seasonality is indicative of a lack of competition between domestic
candles and Chinese imports, the Commission states:
Data on seasonality should be used with caution, as no clear
definition of `Christmas candle' has been offered. Some reporting
companies indicated that all red, white, and green candles were
reported as Christmas candles, whereas other companies indicated
that they sell Christmas colors year round and reported sales for
October through December as Christmas candles. See ITC Final Results
at A-7, fn 1.
Thus, the ITC conceded that there was no concrete definition of a
Christmas/seasonal candle, and noted that the most widely-used metric
in determining whether a candle was Christmas/seasonal was based upon
its color and/or the time of year in which it was sold. However, the
ITC's indication of what is considered a Christmas/seasonal candle does
not signify it advocated that Christmas/seasonal candles in any shape
should be within the scope of the investigation. Rather, it indicates
that the ITC advocated that those candles in the enumerated shapes
should not be considered outside the scope of the investigation simply
because they are in ``Christmas/seasonal colors.''
Order
The Department published the Order, with scope language identical
to the Department's Initiation, Preliminary Results, and Final Results.
See Order; see also Relevant Documents Memorandum at Tab J.
Novelty Exclusion Scope Rulings
The first novelty exclusion, issued in October 30, 1986, regarded a
taper imported by Global Marketing Services' that had a Santa Claus
figurine attached to the taper. The Department solicited comments from
NCA before it made its final scope ruling. NCA agreed that the candle
was outside of the scope, stating:
This particular candle is considered borderline in our opinion
because the only novelty is the wax Santa Claus which can be removed
or added to the taper. Without the attached wax Santa Claus, the
subject taper would clearly be within the scope of the order.
However, we consent to the exclusion of this specific taper only on
the basis that the hand-painted wax Santa Claus is attached to each
taper entered through Customs.
See Letter to the Department on Behalf of NCA, dated October 15, 1986
(``NCA's October 15, 1986 Letter''); see also Relevant Documents
Memorandum at Tab K. In a letter explaining to Global Marketing
Services why we excluded their candle, the Department stated:
Your tapers have a hand-painted figurine {emphasis added{time}
molded to the candle, which could not be removed without damage to
the taper. This different physical characteristic precludes
inclusion of these candles in the scope of the order.
See Letter from the Department to Global Marketing Services, dated
October 30, 1986 (``Department's October 30, 1986 Letter''); see also
Relevant Documents Memorandum at Tab L.
It is therefore apparent from examining NCA's October 15, 1986,
Letter and the Department's October 30, 1986, Letter that Global
Marketing Service's Santa Claus candle was found outside of the scope
not because of its Christmas/seasonal characteristics, but because of
its figurine component.
The second novelty exclusion, issued in July 13, 1987, regarded
candles with raised Christmas motifs imported by Giftco Inc. The
Department solicited comments from NCA before it made its final scope
ruling. NCA agreed that the candles were outside of the scope, stating:
{O{time} ur examination of the candles * * * revealed that they
are novelty candles which are specially designed for Christmas. That
is, they are holiday scenes and symbols. Both candles are square,
four inches high, and have alternating raised motif scenes outlined
by borders. The first candle is red and has the word `JOY' written
in yellow letters surrounded by green pine branches. The alternate
scene has a red cardinal sitting on yellow cornets. The second
candle is light blue and has the words `Silent Night' surrounded by
one large and several small stars painted yellow, blue, and white.
The alternate scenes depict a yellow church with two green trees,
green grass, and a snow-topped mountain in the background.
These specific candles are Christmas novelty candles that are
outside the scope of the order. They are similar to the hand-painted
Santa Claus figure candles that we have already agreed should be
excluded from the order. However, not all raised motif candles
should be excluded from the order. We specifically included
petroleum wax candles that have raised motifs in the investigation
since several of the petitioners produce them. For example, Candle-
lite makes votive candles with raised flower motifs while Colonial
Candle of Cape Cod attaches a small `CCCC' motif to all of its
candles.
See Letter to the Department on Behalf of NCA, dated May 4, 1987
(``NCA's May 4, 1987 Letter''); see also Relevant Documents Memorandum
at Tab M. This statement may be interpreted in different ways. While
one could argue this is evidence that NCA supported Christmas/seasonal
candles being outside of the scope of the Order, one
[[Page 49479]]
could also contend that NCA supported these candles as outside of the
scope because they were in the shape of squares--not one of the
enumerated shapes. Furthermore, even if one were to interpret this
statement as NCA supporting the exclusion of Christmas/holiday candles,
this point is moot because as stated above, the Department must
reasonably determine the products originally covered by the scope of
the LTFV investigation as well as the original intent of the injured
domestic industry before the issuance of the Order. This scope ruling,
however, came after the completion of the investigation and issuance of
the Order.
CBP Notice
The Department issued instructions to the U.S. Customs Service in
connection with the second novelty exclusion from the Order for
Christmas/seasonal novelty candles (``CBP Notice''). While this notice
included exclusions discussed during the course of the investigation
(i.e., numeral and ``figurine-type'' candles), the notice also
introduced the idea of a novelty candle exclusion that clarified the
candle types excluded from the Order beyond those discussed during the
investigation:
The Department of Commerce has determined that certain novelty
candles, such as Christmas novelty candles, are not within the scope
of the antidumping duty order on petroleum wax candles from the
People's Republic of China (PRC). Christmas novelty candles are
candles specially designed for use only in connection with the
Christmas holiday season. This use is clearly indicated by scenes or
symbols depicted in the candle design. Other novelty candles not
within the scope of the order include candles having scenes or
symbols of other occasions (e.g., religious holidays or special
events) depicted in their designs, figurine candles, and candles
shaped in the form of identifiable objects (e.g., animals or
numerals).
See CBP Notice; see also Relevant Documents Memorandum at Tab N. While
this exception for Christmas/seasonal and special occasion-themed
candles appears to be in response to the first two novelty scope
rulings for Christmas/seasonal candles, there is no evidence on record
from the investigation to indicate that any religious, holiday, or
special occasion-themed candles, otherwise within the shapes outlined
in the scope,\11\ were considered outside the scope of the
investigation prior to the issuance of the Order.
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\11\ As noted previously, the ITC's discussion of Christmas/
seasonal candles (i.e. those in red, white, or green) made no
indication that these candles (if in one of the non-enumerated
shapes) should be included within the scope.
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JC Penney
In November 2001, the Department reconsidered its practice on the
issue of candle shapes. See Final Scope Ruling Antidumping Duty Order
on Petroleum Wax Candles From the People's Republic of China (A-570-
504); JC Penney Purchasing Corporation, (November 9, 2001) (``JC
Penney''). In this ruling, the Department reviewed the text of the
scope of the Order, beginning with the text of the first sentence of
the scope which covers ``{c{time} ertain scented or unscented petroleum
wax candles made from petroleum wax and having fiber or paper-cored
wicks.'' See Order. The Department stated in JC Penney:
{t{time} he text following this broad inclusive sentence
provides a list of shapes, which list is not modified by any express
words of exclusivity. The result of our prior practice of excluding
candles of a shape other than those listed was arguably inconsistent
with the fact that such candles were scented or unscented petroleum
wax candles made from petroleum wax and having fiber or paper-cored
wicks.'
See JC Penney at 4-5, fn 1; see also Relevant Documents Memorandum at
Tab O. Furthermore, in JC Penney, the Department stated:
We now determine that this practice was incorrect because it had
the effect of narrowing the broad coverage of the first sentence of
the Order's scope. The list of shapes in the second sentence of the
Order's scope does not provide a textual basis for such a narrowing
of the coverage of the first sentence of the Order's scope.
See JC Penney at 5, fn 1; see also Relevant Documents Memorandum at Tab
O.
Therefore, since 2001, the Department has followed the ``JC Penney
methodology'' whereby it determines that if the candle is made from
petroleum wax and has a fiber or paper-cored wick it falls within the
scope of the Order regardless of shape unless the candle possesses the
characteristics set out in the CBP Notice, in which case a candle falls
within the Department's novelty candle exception and is not within the
scope of the Order.
However, a close review of the investigation record shows that,
although addressing a key enforcement concern, the JC Penney
methodology did not fully take into account record evidence from the
investigation. While JC Penney stated that the scope of the Order was
inclusive, the language of the Order indicates that the scope is
exclusive, whereby only those candles in the enumerated shapes are
considered inside the scope. For instance, the scope of the Order
covers ``{c{time} ertain scented or unscented petroleum wax candles''
that ``are sold in the following shapes: tapers, spirals, and straight-
sided dinner candles; rounds, columns, pillars, votives; and various
wax-filled containers'' (emphasis added). That is, the language of the
scope is overt in its exclusivity. As discussed above, NCA's apparent
concurrence with the scope clarifications issued to Customs further
indicate that the scope was originally intended to include only those
candle shapes described in the scope and to exclude birthday and
utility candles).
Preliminary Determination
A thorough review of the record clearly illustrates that NCA did
not intend for the scope of the candles Order to include all candles.
At the time of the LTFV investigation and the concomitant setting of
the scope, NCA advocated a scope where only the enumerated shapes would
be covered. For instance, NCA's agreement in the Memorandum Dated April
30, 1986, that ``figurine'' candles were not within the scope of the
Order indicates that candles in shapes other than those enumerated in
the scope language were not included within the scope of the
investigation. Furthermore, NCA also intended for the Order to exclude
birthday candles and utility candles. While the Department adhered to
the original intent of NCA in excluding birthday candles and candles
not in the enumerated shapes through the Scope Clarification
Communication and CBP Notice, we inadvertently did not specify that
utility candles should also be excluded.
Thus, after examining the historical record of this case to
determine the original intent of NCA, and taking into consideration the
comments of interested parties, the Department is taking this
opportunity to clarify how it will analyze candle scope requests so as
to best reflect the products covered by the LTFV investigation. The
Department agrees with NCA that there is no basis in the record of the
LTFV investigation for excluding candles based upon holiday
characteristics. In addition, the Department notes that, in contrast to
JC Penney, record evidence suggests that the scope of the Order is
exclusive and that candles not in the shapes described in the scope
fall outside the scope of the Order.
Therefore, the Department's proposed new interpretation for
interpreting candle scope determination requests would entail Option A,
with the addition that two specific types of candles--utility candles
and birthday candles--would be excluded. The proposed new
interpretation would be
[[Page 49480]]
as follows: \12\ The Department will consider all candle shapes
identified in the scope of the Order \13\ (i.e., tapers,\14\
spirals,\15\ and straight-sided dinner candles; \16\ rounds,\17\
columns,\18\ pillars,\19\ votives; \20\ and various wax-filled
containers \21\) to be within the scope of the Order, regardless of
etchings, prints, texture, moldings or other artistic or decorative
enhancements including any holiday-related art. However, even if they
are one of the shapes listed within the scope of the Order, two types
of candles will be excluded: (1) those candles known variously as
``household candles,'' ``emergency candles,'' or ``utility candles,''
(which are typically white in color, 5 inches long, .75 inch in
diameter, and come in packs of two or more); and (2) birthday candles
(which are typically small, thin, pillar-shaped candles that range in
height from 2 inches to 3.5 inches, are .18 inch to .25 inch in width,
and come in packs of 10 to 24), and birthday numeral candles (which are
candles in the shape of numbers that typically range in height from 2
to 4 inches). All other candle shapes and types will be considered
outside the scope of the Order.
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\12\ The definitions used in the proposed new interpretation
were taken from a variety of sources: (1) Historical documents on
record from the candles case, such as the Petition and Departmental
memoranda; (2) past candle scope rulings; and (3) sources outside of
the Department, including the NCA's Web site.
\13\ Note: The term ``circumference'' as used below denotes the
length of the perimeter of a candle, whether measured at the base,
top, etc. It can be used in reference to candles that have
cylindrical or polygonal (i.e., multi-sided, with all sides being
relatively straight) bases and tops.
\14\ A taper is a candle that has a circumference at its base of
up to 5 inches, is typically six inches or longer and gradually
decreases in width from base to top so that the width at the base is
typically no more than 60 percent larger than the width at the top
(the top of a taper candle is typically \1/6\ of the candle's height
from the tip of the candle, excluding the wick). The decrease in
width may be continuously straight or slightly convex.
\15\ A spiral is a candle that has dimensions similar to a
taper's and has helical indentations around its length.
\16\ A straight-sided dinner candle has dimensions similar to a
taper's, although its width is constant through the length of the
candle.
\17\ A round may come in two varieties: (1) A ``spherical
round'' is one in which all points on the candle's surface (except
for those on the base and top) are approximately equidistant from
the candle's center; see Final Scope Ruling: Antidumping Duty Order
on Petroleum Wax Candles from the People's Republic of China (A-570-
504): Wal-Mart Stores, Inc. (December 17, 2004) at 13. Thus, a
spherical round does not contain multiple surface angles (or
embellishments so prominent that it could not be considered
approximately spherical); (2) a ``flattened round,'' is typically
disc-shaped and has at its widest point an approximately circular
circumference which is greater than it its height. All horizontal
radii of this circumference are approximately equidistant from the
circumference's center. Thus, a flattened round does not contain
multiple surface angles (or embellishments so prominent that it does
not exhibit an approximately circular circumference). The top,
bottom, and side of a flattened round may be slightly convex or non-
convex.
\18\ A column is a candle that is often free-standing, has a
width of up to 8 inches and a height of up to 14 inches. It
typically maintains a constant circumference throughout its length.
The base and top may have a cylinder or polygon shape.
\19\ A pillar is a candle that is often free-standing, has a
width of up to 8 inches and a height of up to 12 inches. It
typically maintains a constant circumference throughout its length.
The base and top may have a cylinder or polygon shape.
\20\ A votive candle is typically about 1.5 inches in diameter,
2 to 2.5 inches high, and typically designed to be placed in a
container.
\21\ The exposed surface of the wax at the top of the container
is typically horizontally flat. The container may be in any shape
and be made of any material.
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Analysis of Parties' Comments
RILA suggests that the Department use objective criteria to make
scope rulings more efficient, such as a list of symbols and objects
that are specific to a holiday. We have not adopted this suggestion
because our proposed interpretation would not take into account holiday
ornamentation when determining whether a candle is outside of the scope
of the Order.
TAG suggested that the identifiable object exclusion be based on
``realistic guidelines.'' We have not adopted this suggestion either,
as the Department's proposed interpretation would not take into account
identifiability as a particular object, but rather candle shape and
candle type in scope determinations.
In response to NRF's suggestion that the Department should use
practices such as utilizing a designated Department employee whom
importers can call to discuss scope issues, the Department notes that
it already has analysts who perform this function. However, while
analysts may discuss scope issues with interested parties, no scope
determination can be made by telephone. An official scope ruling can
only be made when an interested party formally submits its scope ruling
request to the Department. See 19 CFR 351.225.
With regard to NCA's and SI's suggestion that the Department issue
summary determinations, the Department notes that it already issues
determinations that include multiples of what are essentially the same
item. See, e.g., Antidumping Duty Order on Petroleum Wax Candles From
the People's Republic of China: Final Scope Ruling, Fashion Craft-
Excello, Inc. (April 12, 2007).
In response to the assertion by NRF and SI that a change in the
Department's current practice would mean that it would have to address
prior scope rulings, the Department notes that in previous instances
where it has changed its scope ruling interpretation in the candles
case, the Department has only applied the change to current and future
scope rulings. See LDM Anticircumvention Determination \22\ and JC
Penney.
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\22\ See Later-Developed Merchandise Anticircumvention Inquiry
of the Antidumping Duty Order on Petroleum Wax Candles from the
People's Republic of China: Affirmative Final Determination of
Circumvention of the Antidumping Duty Order, 71 FR 59075 (October 6,
2006) (``LDM Anticircumvention Determination'').
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Application of Interpretation
Given the above, the Department hereby preliminarily applies this
new interpretation to the 388 pending scope determinations before us.
See Memorandum to the File through Alex Villanueva, Program Manager,
from Tim Lord, Case Analyst, Certain Petroleum Wax Candles from the
People's Republic of China: Candle Scope Request Preliminary
Determinations (August 9, 2010). The 388 requests consisted of 269
unique candles.\23\ Of those 269 unique candles, 250 were preliminarily
determined to be outside of the scope of the Order, while 19 unique
candles were preliminarily determined to be within of the scope of the
Order.
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\23\ ``Unique candles'' are those from a particular requestor
that the Department deems identical. For example, if a requestor
submitted three beach ball candles, and two of those were exactly
the same size, shape, and color, while the third candle was not, the
set of three candles would consist of two unique candles.
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Submission of Comments
The Department invites interested parties to comment on these
preliminary results and the proposed interpretation for analyzing scope
requests under the Order. Persons wishing to comment should file one
signed original and six copies of each set of comments by the date
specified above. The Department will consider all comments received
before the close of the comment period in reaching its final
determination. Comments received after the end of the comment period
may not be considered. All comments responding to this notice will be a
matter of public record and will be available for inspection and
copying at Import Administration's Central Records Unit, Room 1117. The
Department requires that comments be submitted in written form. The
Department recommends submission of comments in electronic form to
accompany the required paper copies.
Comments filed in electronic form should be submitted either by e-
mail to the Webmaster below, or on CD-ROM,
[[Page 49481]]
as comments submitted on diskette are likely to be damaged by postal
radiation treatment. Comments received in electronic form will be made
available to the public in Portable Document Format (PDF) on the
Internet at the Import Administration Web site at the following
address: http://www.ia.ita.doc.gov.
Any questions concerning file formatting, document conversion,
access on the Internet, or other electronic filing issues should be
addressed to Andrew Lee Beller, Import Administration Webmaster, at
(202) 482-0866, e-mail address: [email protected].
Dated: August 6, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-20076 Filed 8-12-10; 8:45 am]
BILLING CODE 3510-DS-P