SUMMARY
On October 26, 1998, Costco
Wholesale ("Costco") requested that the Department of Commerce ("the Department")
issue a scope ruling on whether its beeswax and petroleum wax-filled containers
manufactured in the People’s Republic of China ("PRC") and imported by Costco
are covered by the antidumping duty order on petroleum wax candles from the
PRC.
We have determined that
Costco’s candles are not petroleum wax candles as defined by the scope of the
antidumping duty order on petroleum wax candles from the PRC. Thus, the candles
subject to this inquiry are outside the scope of the antidumping duty order.
BACKGROUND
In its October 26, 1998
request for a scope ruling, Costco described the candles subject to this inquiry
as a scented wax in a decorative, frosted glass container which consists of
81% beeswax and 19% petroleum wax. Costco asserted that these candles should
be excluded from the order because the original petition filed on behalf of
the National Candle Association fails to specify that blended petroleum wax-beeswax
candles should be within the scope of the resulting final antidumping order.
In its comments, the National
Candle Association ("NCA") argues that the candles subject to this inquiry are
made from petroleum wax, contain fiber wicks, and are wax-filled containers.
NCA asserts that the wax-filled containers subject to this inquiry would not
qualify for the novelty exclusion, as they are not specifically designed for
any special holiday, and they can be sold and used throughout the year. Furthermore,
NCA states that the Costco wax-filled containers are not beeswax candles, because
they are not composed of 100 percent beeswax.
ANALYSIS
The regulations governing
the Department’s antidumping scope determinations are 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 antidumping duty 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 § 351.225(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 evaluated Costco’s request in accordance with 19 CFR §351.225(k)(1)
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); 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 ("ITC Determination").
The product descriptions
contained in the above listed documents are dispositive. The Department has
determined, based on the ITC’s final determination, the determinations of the
Secretary, the original language in the petition, and the circumstances of this
particular case, that Costco’s candles are not "petroleum wax" candles as defined
in the scope of the order.
In its determination of
injury to the domestic industry, the International Trade Commission ("ITC")
considered the issue of whether candles containing a mixture of petroleum wax
and other "natural" waxes were to be included in their like product determination.
ITC Determination at 4. Specifically, the ITC determined that certain blended
petroleum wax and beeswax candles are not "like or similar" products to the
petroleum wax candles covered under the scope of the order. ITC Determination
at 5.
NCA asserted in its comments
that a beeswax candle is a candle composed of 100 percent beeswax, and that
"a candle containing any petroleum wax from the People’s Republic of China must
be treated as being within the scope of the Order." NCA ‘s Comments at 2. NCA’s
assertions on these issues are not persuasive. The ITC determined that certain
blended candles which are composed of less than 100 percent petroleum wax are
not a like product and therefore, are outside the scope of the antidumping duty
order on petroleum wax candles from the People’s Republic of China. Costco’s
wax-filled containers, made of 81 percent beeswax and 19 percent petroleum wax,
are similar to those candles excluded from the ITC’s like product determination.
Therefore, Costco’s wax-filled containers composed of 81 percent beeswax and
19 percent petroleum wax are outside the scope of the antidumping duty order
on petroleum wax candles from the People’s Republic of China.
RECOMMENDATION
We recommend the Department
find that Costco’s candles made from 81 percent beeswax and 19 percent petroleum
wax are outside thc 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
Enforcement Group III
12-11-98
Date
Attachment