MEMORANDUM
FOR: |
Joseph
A. Spetrini
Deputy Assistant Secretary
AD/CVD Enforcement Group III |
FROM: |
Richard
Weible, Director
Office Eight |
SUBJECT: |
Final
Affirmative Scope Ruling - Antidumping Duty Order on Petroleum Wax Candles
From the People’s Republic of China (A-570-504); Meijer Inc. |
SUMMARY
On July 24, 1997, Meijer
Inc. (Meijer) requested that the Department of Commerce (the Department) issue
a scope ruling finding that its four (bell, tree, reindeer, and star) wax-filled
terra-cotta candles and one (jack-o-lantern) wax-filled porcelain candle, imported
from the People’s Republic of China (PRC), are outside the scope of the antidumping
duty order on candles from the PRC. In accordance with 19 CFR 351.225(k)(1),
we recommend that the Department determine that Meijer’s bell, tree, reindeer,
and star candles are covered by the scope of the antidumping duty order and
that the jack-o-lantern candle is not included within the scope of the antidumping
duty order.
BACKGROUND
In its July 24, 1997 request
for a scope ruling, Meijer (Meijer Request) argues that its bell, tree, reindeer,
and star candles, measuring 1 ¼" high and approximately 3 ½" long and from 1-3
½" at the widest point, "should be considered a novelty candle." Meijer also
suggests that these candles will be sold at a retail level for the holiday season
(Christmas and Halloween) and that once the holiday season is over they will
be discontinued. Meijer believes the terra-cotta containers cannot be used once
the candles have expired.
Meijer also contends that
the jack-o-lantern pumpkin candle held in a porcelain container measuring 1
3/4" high and approximately 3" across, which is orange with black eyes and nose
and white teeth, should be considered a "novelty candle". Meijer argues that
the jack-o-lantern candle will only be sold during the Halloween season and
that after the holiday season it too will be discontinued.
ANALYSIS
The regulations governing
the Department’s antidumping scope determinations can be found at 19 CFR 351.225.
On matters concerning the scope of an antidumping duty order, the Department
first examines the descriptions of the merchandise contained in the petition,
the determinations of the Secretary and the International Trade Commission (ITC),
the initial investigation and the order. This determination may take place with
or without a formal inquiry.
If the Department determines
that these descriptions are dispositive of the matter, the Department will issue
a final scope ruling as to whether or not the subject merchandise is covered
by the order. See 19 CFR 351.225(d).
Conversely, where the descriptions
of the merchandise are not dispositive, the Department will consider the five
additional factors set forth at 19 CFR 35l.225(k)(2). These criteria are: i)
the physical characteristics of the merchandise; ii) the expectations of the
ultimate purchasers; iii) the ultimate use of the product; iv) the channels
of trade in which the product is sold; and v) the manner in which the product
is advertised and displayed. The Department applies these criteria when the
product descriptions contained in the petition, the determinations of the Secretary
and the ITC, the investigation and the order are ambiguous or unclear. The determination
as to which analytical framework is most appropriate in any given scope inquiry
is made on a case-by-case basis after consideration of all evidence before the
Department.
In the instant case, the
Department has determined that no formal inquiry is warranted to determine whether
or not Meijer’s candles are covered by the scope of the order. We have evaluated
this request in accordance with 19 CFR 35l.225(k)(l) because the descriptions
of the products contained in the petition, the final determinations of the Secretary
and the ITC, and the antidumping duty order are, in fact, dispositive.
Documents and parts thereof
from the underlying investigation deemed relevant by the Department to the scope
of the outstanding order were made part of the record of this determination
and are referenced herein. Documents that were not presented to the Department,
or placed by it on the record, do not constitute part of the administrative
record for this scope determination.
In its petition of September
4, 1985, the National Candle Association requested that the investigation cover:
[C]andles [which] are
made from petroleum wax and contain 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. These
candles may be scented or unscented ... and are generally used by retail consumers
in the home or yard for decorative or lighting purposes.
Antidumping Petition, September
4, 1985 at 7.
The Department defined the
scope of the investigation in its notice of initiation. This scope language
carried forward without change through the preliminary and final determinations
of sales at less than fair value and the eventual antidumping duty order:
[C]ertain 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.
Petroleum Wax Candles from
the People ‘s Republic of China: Initiation of Antidumping Duty Investigation,
50 FR 39743 (September 30, 1985) (emphasis added); see also Preliminary Determination
of Sales at Less Than Fair Value, 51 FR 6016 (February 19, 1986), Final Determination,
51 FR 25085 (July 10, 1986), and Antidumping Duty Order: Petroleum Wax Candles
from the People’s Republic of China, 51 FR 30686 (August 28, 1986). The ITC
adopted a similar definition of the "like product" subject to its determinations,
noting that the investigations did not include "birthday, birthday numeral and
figurine type candles." See Determinations of the Commission (Final), USITC
Publication 1888, August 1986, at 4, note 5, and A-2.
Also of relevance to the
present scope inquiry is a notice issued to the United States Customs Service
in connection with a July 1987 scope determination, which states:
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 Christmas scenes and 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).
CIE N-212185, September
21, 1987; Letter from the Director, Office of Compliance, to Burditt, Bowles
& Radzius, Ltd, July 13, 1987.
Meijer provided samples
of two-dimensional, geometric, bell, reindeer, tree, and star candles which
are in terra-cotta containers 1 ¼" inches in height holding either a red or
green petroleum wax candle. Meijer argues that because the candles are of a
novelty design and are only sold during a holiday season, they are Christmas
novelty candles.
The jack-o-lantern candle,
according to Meijer, is a candle in a porcelain container measuring 1 ¾" in
height. Again, Meijer argues that the jack-o-lantern candle is a Halloween novelty
candle (orange with black eyes and nose and white teeth) and is sold only during
the holiday season.
We agree with Meijer that
Christmas and other holiday novelty candles are excluded from the scope of the
order, as the Department stated in our July 1987 letter. We note, however, that
the order specifically covers "various wax-filled containers." The bell, tree,
reindeer, and star candles are in a container filled with petroleum wax, and
each has a wick. Therefore, the subject candles appear to be manifestly within
the scope of the order, which lists "various wax-filled containers" as subject
merchandise. Furthermore, we cannot agree that the subject Meijer candles meet
the criteria for exclusion specified in that letter. In pertinent part, we explained
in the letter that the excluded novelty candles have "scenes or symbols" of
specific occasions depicted in their designs, or are "shaped in the form of
identifiable objects (e.g. animals or numerals)" and are specifically designed
for use only in connection with the holiday season. See CIE N-212/85, op cit.
The Department has, in the
past, addressed several scope requests involving wax-filled containers. For
example, in a ruling involving tins with floral designs imported by Lew-Mark
Baking Company, the Department found that because the tins lack holiday scenes
or symbols, they are properly considered wax-filled containers covered by the
scope of the order. See Final Scope Ruling, Lew-Mark Baking Co., Inc., December
16, 1994. For this same reason, the Department found certain wax-filled containers
with floral, fruit, or marine patterns, imported by Star Merchandise Co., Inc.,
to be covered by the order while other containers imported by Star were excluded
from the order because they incorporate scenes of Christmas or Halloween into
their designs. See Star Merchandise Co., Inc., July 27, 1994.
Based on the evidence in
the record of this scope inquiry, we conclude that Meijer’s bell, tree, reindeer,
and star candles do not contain scenes or symbols specifically related to a
holiday or other special event and their use is not attributed solely to the
Christmas season. The Department has, on numerous occasions, addressed Christmas
scenes and symbols. Examples include cases involving figurines attached to tapers,
pillar candles with engraved or molded scenes or symbols, and wax-filled containers
incorporating holiday designs. Specifically, the Department has consistently
found candles with Santa Claus designs to be Christmas novelty candles. See,
e.g., Star Merchandise, Inc., July 27, 1994; West Coast Liquidators, July 27,
1994; A.J. Cohen, June 6, 1994; Kole Imports, June 7, 1994; and Primark International,
June 7, 1993. The Santa Claus design effectively limits the candle to use during
the Christmas season. Candles with other Christmas scenes or symbols have likewise
been excluded. See, e.g., Success Sales, July 27, 1994 (candle set featuring
depiction of the Nativity and of a Christmas ornament on pine boughs excluded).
Conversely, several parties
have claimed that objects such as an angel, snowman, or pine cone constitute
"Christmas symbols." In two separate scope rulings, the Department did not accept
the parties’ claims that these objects are Christmas scenes or symbols, deciding
instead that the candles are excluded because, pursuant to our October 30, 1986
ruling involving Global Marketing Services, the figurines added to the tapers
could not be removed without damaging the candle. See Two’s Company, January
13, 1995 at 4; and West Coast Liquidators, July 27, 1994. The latter case is
particularly instructive: West Coast Liquidators argued that a pine cone qualifies
as a holiday "scene or symbol." See Letter, Gibson, Dunn & Crutcher to the
Secretary, April 14, 1994 at 3. West Coast Liquidators also argued that the
candles were excluded as "figurine" candles citing the Global Marketing case.
Id. The Department, in excluding this candle, found only the second argument
persuasive. See West Coast Liquidators, op cit., at 3. We find parallels between
West Coast Liquidator’s claim that a pine cone is a Christmas scene or symbol
and Meijer’s claim that a star, bell, tree, and reindeer are likewise a Christmas
scene or symbol.
In each case involving wax-filled
containers examined by the Department to date, the product has consisted of
a metal, glass, ceramic, or terra-cotta container which, conceivably, would
be available for re-use after the constituent candle had been burned. The issue
before the Department, however, is not the disposition of the container after
the candle is consumed but, rather, the wax-filled container en toto as it is
imported into the United States. Meijer has introduced no evidence which would
indicate that its products should properly be classified as anything other than
candles in terra cotta - i.e., wax-filled containers - from the PRC. Therefore,
the Department has no basis in the record evidence for focusing solely upon
the containers while disregarding the petroleum wax candles therein.
In addition, the language
of the order is also dispositive in regards to the four aforementioned candles
subject to the scope of the inquiry. Each of the four candles is a "wax-filled
container," as defined in the order. They are of varying sizes and shapes, but,
in each instance, lack the exclusionary characteristics necessary to consider
them outside the scope of the order.
Finally, with regard to
Meijer’s comments regarding its jack-o-lantern candle, the Department agrees
with Meijer that this particular candle is a Halloween novelty candle that is
specifically designed for use only in connection with the Halloween season,
and therefore, is not covered by the scope of the order. The Department has
determined from samples submitted by Meijer that the jack-o-lantern candle (bearing
the design of a jack-o-lantern face), having the shape of a pumpkin with "black
eyes and nose and white teeth," is a holiday novelty candle that is clearly
associated with Halloween.
RECOMMENDATION
We recommend the Department
find Meijer’s bell, star, reindeer, and tree candles, described as petroleum
wax candles in terra-cotta containers, within the scope of the antidumping duty
order on petroleum wax candles from the PRC. In addition, we recommend that
the Department find Meijer’s jack-o-lantern candle, described as a petroleum
wax candle in a porcelain container, not included within the scope of the antidumping
duty order on petroleum wax candles from the PRC.
_____√_____Agree ___________Disagree
If you agree, we will send
the attached letter to the interested parties, and will notify the U.S. Customs
Service of our determination.
Joseph A. Spetrini
Deputy Assistant Secretary
AD/CVD Enforcement Group III
9/8/97
Date
Attachment