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DEC 11 1998 A-570-504 |
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Certified Mail, Return Receipt Requested To All Interested Parties: April 21,1998, Et Al Imports, Inc. ("Et Al") requested that the Department of Commerce ("the Department") issue a scope ruling on whether eight candles manufactured in the Peoples Republic of China ("PRC") and imported by Et Al are covered by the antidumping duty order on petroleum wax candles from the PRC. On July 2, 1998, the Department initiated an inquiry under section 351.225(b) to determine whether certain candles made from 80 percent beeswax and 20 percent paraffin wax fall within the scope of the order. We have determined that Et Al’s candles are not petroleum wax candles as defined in 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. Enclosed is a memorandum containing the Departments analysis. We will notify the U.S. Customs Service of this decision. If you have any questions, please contact John Totaro or Becky Hagen, at (202) 482-1374 or (202) 482-1102, respectively.
Sincerely,
Roland L. MacDonald
Enclosure
SUMMARY On April 21, 1998, Et Al Imports, Inc. ("Et Al") requested that the Department of Commerce ("the Department") issue a scope ruling on whether eight candles manufactured in the Peoples Republic of China ("PRC") and imported by Et Al are covered by the antidumping duty order on petroleum wax candles from the PRC. On July 2, 1998, the Department initiated an inquiry under 19 CFR § 351.225(b) to determine whether certain candles made from 80 percent beeswax and 20 percent paraffin wax are within the scope of the order. We provided interested parties with an opportunity to submit comments. We have determined that Et Al’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 April 21, 1998 request for a scope ruling, Et Al described the candles subject to this inquiry as ranging in size from 12" tall by ¾" diameter and 4" to 6" tall by 3" in diameter, consisting of 80% beeswax and 20% paraffin wax. Et Al asserted that these candles should be excluded from the order because: i) the presence of beeswax (80% of candle’s composition) distinguishes these candles from those typically subject to the order because beeswax is more expensive and of a higher quality than petroleum wax; ii) the consumer purchases these products as beeswax candles; and iii) the ultimate use of the candles is different from that of petroleum wax candles because the consumer purchases them for more meaningful, reflective, and personal reasons. 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 sold in shapes of "rounds, columns, or pillars." NCA asserts that none of the candles subject to this inquiry would qualify for the novelty exclusion, as the Chinese symbols affixed to the candle do not limit the use of the Et Al candles to a specific holiday. Furthermore, NCA states that the Et Al candles are not beeswax candles, because they are not composed of 100 percent beeswax. In response to Et Al’s statement that the ultimate use of the candles subject to this inquiry are for "more meaningful, reflective, and personal reasons," NCA argues that both petroleum wax candles and the subject candles are used for the same purposes. 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 Et Al’s request in accordance with 29 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" or "Commission") 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 "beeswax candles are made of 100 percent beeswax," and that "if any PRC petroleum wax is added to a beeswax candle, the resulting adulterated or blended candles must be treated as a dumped candle and subject to the Antidumping Order ." NCA ‘s Comments at 7. 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. Et Al’s candles, made of 80 percent beeswax and 20 percent petroleum wax, are similar to those candles excluded from the ITC’s like product determination. NCA’s comment that none of Et Al’s candles would qualify for the novelty exclusion, as the symbols affixed to the candles do not limit their use to a specific holiday, and that both petroleum wax candles and the candles subject to this inquiry are used for the same purposes are valid arguments. However, as mentioned above, the ITC determined that certain blended candles similar to the Et Al candles were not a like product to petroleum wax candles. Therefore, the candles are outside the scope of the order irrespective of the novelty exclusion. Et Al’s candles, made of 80 percent beeswax and 20 percent petroleum wax, are similar to those candles excluded from the ITC’s like product determination, and therefore, 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 Et Al’s candles made from 80 percent beeswax and 20 percent petroleum wax are outside 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 12-11-98 Date
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