[Federal Register: May 12, 2003 (Volume 68, Number 91)]
[Notices]
[Page 25332-25335]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12my03-31]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-791-817]
Initiation of Antidumping Duty Investigation: Hydraulic Magnetic
Circuit Breakers from South Africa
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: May 12, 2003.
FOR FURTHER INFORMATION CONTACT: Fred W. Aziz, Thomas Schauer, or
Richard Rimlinger, Import Administration, International Trade
Administration,
[[Page 25333]]
U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230; telephone: (202) 482-4023, (202) 482-0410 or
(202) 482-4477, respectively.
SUPPLEMENTARY INFORMATION:
The Petition
On April 14, 2003, the Department of Commerce (``the Department'')
received a petition on imports of hydraulic magnetic circuit breakers
(``HMCBs'') from South Africa filed in proper form by Airpax
Corporation, LLC (referred to hereafter as ``the petitioner''). On
April 22, 2003, the Department requested additional information and
clarification of certain areas of the petition. The petitioner filed a
supplement to the petition on April 25, 2003.
In accordance with section 732(b) of the Tariff Act of 1930, as
amended (``the Act''), the petitioner alleges that imports of HMCBs
from South Africa are being, or are likely to be, sold in the United
States at less than fair value within the meaning of section 731 of the
Act, and that such imports are materially injuring and threaten to
injure an industry in the United States.
The Department finds that the petitioner filed this petition on
behalf of the domestic industry because they are interested parties as
defined in section 771(9)(c) of the Act. Furthermore, with respect to
the antidumping duty investigation the petitioner is requesting the
Department to initiate, it has demonstrated sufficient industry support
(see ``Determination of Industry Support for the Petition'' below).
Scope of Investigation
This investigation covers all hydraulic magnetic circuit breakers
(sometimes referred to as magnetic hydraulic) circuit breakers
(``HMCBs''), incorporating a tripping means of a magnetic coil
surrounding a tube and plunger, restrained by air, liquid or spring,
whether or not sealed, whether or not of molded case, of any voltage
less than 72.5 kilovolts, of any amperage rating, with single or
multiple poles, of any mounting or connection means and of any terminal
type, whether or not having a magnetic latch, and excluding thermal and
thermal magnetic circuit breakers. The subject merchandise is
classified under Harmonized Tariff Schedule of the United States
(``HTSUS'') subheadings 8535.21.00 and 8536.20.00. Although the HTSUS
subheadings are provided for convenience and customs purposes, our
written description of the scope of this investigation is dispositive.
During our review of the petition, we discussed the scope with the
petitioner to ensure that it is an accurate reflection of the products
for which the domestic industry is seeking relief. Moreover, as
discussed in the preamble to the Department's regulations (62 FR 27296,
27323), we are setting aside a period for interested parties to raise
issues regarding product coverage. The Department encourages all
interested parties to submit such comments within 20 calendar days of
publication of this notice. Comments should be addressed to Import
Administration's Central Records Unit at Room 1870, U.S. Department of
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C.
20230. The period of scope consultations is intended to provide the
Department with ample opportunity to consider all comments and consult
with parties prior to the issuance of the preliminary determination.
Determination of Industry Support for the Petition
Section 732(b)(1) of the Act requires that a petition must be filed
on behalf of the domestic industry. Section 732(c)(4)(A) of the Act
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (1) at least
25 percent of the total production of the domestic like product; and
(2) more than 50 percent of the production of the domestic like product
produced by that portion of the industry expressing support for, or
opposition to, the petition.
Section 732(c)(4)(D) of the Act provides that, if the petition does
not establish support of domestic producers or workers accounting for
more than 50 percent of the total production of the domestic like
product, the administering agency shall: (i) poll the industry or rely
on other information in order to determine if there is support for the
petition as required by subparagraph (A), or (ii) determine industry
support using a statistically valid sampling method.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers as a whole of a domestic like product. Thus, to determine
whether the petition has the requisite industry support, the statute
directs the Department to look to producers and workers who produce the
domestic like product. The International Trade Commission (``the
ITC''), which is responsible for determining whether ``the domestic
industry'' has been materially injured, must also determine what
constitutes a domestic like product in order to define the industry.
While the Department and the ITC must apply the same statutory
definition regarding the domestic like product, they do so for
different purposes and pursuant to separate and distinct authority. In
addition, the Department's determination is subject to time and
information limitations. Although this may result in different
definitions of the domestic like product, such differences do not
render the decision of either agency contrary to law.\1\
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\1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp.
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays
and Display Glass from Japan: Final Determination; Rescission of
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).
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Section 771(10) of the Act defines the domestic like product as ``a
product which is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this title.'' Thus, the reference point from which the domestic-
like-product analysis begins is ``the article subject to an
investigation,'' i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition.
In its April 14th petition, petitioner claims it has industry
support. The petitioner states that it compromises virtually all U.S.
production of HMCBs. However, the petition identifies three additional
U.S. entities engaged in the sale of HMCBs in the domestic market.
According to the petition, none of the three maintain commercial
production in the United States. The petitioner asserts that virtually
all of those firms' manufacturing is done in other countries and that
any domestic manufacturing is limited to samples in non-commercial
quantities. Based on all available information, we agree that the
petitioner compromises virtually all domestic commercial production of
HMCBs.
Our review of the data provided in the petition and other
information readily available to the Department indicates that the
petitioner has established industry support representing over 50
percent of total production of the domestic like product, requiring no
further action by the Department pursuant to section 732(c)(4)(D) of
the Act. In addition, the Department received no opposition to the
petition from domestic producers of the like product. Therefore, the
domestic producers or workers who support the petition account for at
least 25 percent of the total production of the domestic like product,
and the requirements of section 732(c)(4)(A)(i) are met. Furthermore,
the domestic producers or workers who support the petition account for
more than 50 percent of the production of the domestic like product
[[Page 25334]]
produced by that portion of the industry expressing support for or
opposition to the petition. Thus, the requirements of section
732(c)(4)(A)(ii) of the Act also are met. Accordingly, the Department
determines that the petition was filed on behalf of the domestic
industry within the meaning of section 732(b)(1) of the Act.
With regard to the definition of domestic like product, the
petitioner does not offer a definition of domestic like product
distinct from the scope of the investigation. On April 30, 2003,
Circuit Breaker Industries, Ltd. (``CBI''), a South African producer of
the subject merchandise, challenged industry support for the petition
pursuant to sections 732(b)(3) and 732(c)(4)(D) of the Act. On May 1,
2003, the petitioner filed its reply to CBI's challenge.
Based on our analysis of the information presented by the
petitioner, we have determined that there is a single domestic like
product, hydraulic magnetic circuit breakers, which is defined in the
``Scope of Investigation'' section above, and we have analyzed industry
support in terms of this domestic like product. For more information on
our analysis and the data upon which we relied, see Import
Administration Antidumping Investigation Initiation Checklist
(``Initiation Checklist''), Industry Support section and Appendix 1,
dated May 5, 2003, on file in the CRU of the main Department of
Commerce building.
Period of Investigation
The anticipated period of investigation is April 1, 2002, through
March 31, 2003.
Constructed Export Price and Normal Value
The following is a description of the allegation of sales at less
than fair value upon which the Department based its decision to
initiate this investigation. The sources of data for the deductions and
adjustments relating to U.S. price and normal value are discussed in
greater detail in the Initiation Checklist dated May 5, 2003. Should
the need arise to use any of this information as facts available under
section 776 of the Act, we may reexamine the information and revise the
margin calculations, if appropriate.
Constructed Export Price
The petitioner identified CBI and its affiliate CBI, Inc.
(hereinafter ``CBI USA'') as the primary producer and importer,
respectively, of the subject merchandise. As the sole South African
producer of HMCBs, CBI accounts for all exports of HMCBs to the United
States from South Africa. Therefore, the petitioner established U.S.
price based on constructed exported price (``CEP''). According to the
petitioner, CBI's sales in the United States are sold by CBI's
subsidiary, CBI USA, which holds inventory in its U.S. warehouse prior
to shipment to unaffiliated buyers. In order to obtain ex-factory
prices, the petitioner deducted international transportation (by sea)
and estimated profit and expense mark-up. Because the petitioner did
not provide adequate support for its profit and expense figure, we
recalculated the CEPs to not deduct this expense. With this exception,
we reviewed the information provided regarding CEP and have determined
that it is adequate and accurate and represents information reasonably
available to the petitioner (see Initiation Checklist, Re: Less-Than-
Fair-Value Allegation).
Because the petitioner provided price quotes for actual products
and we determine that these price quotes are sufficient for initiation
purposes, we did not use the ITC Dataweb values that petitioner
provided to estimate dumping margins. To the extent necessary, we will
consider the appropriateness of the petitioner's alternative during the
course of this proceeding.
Normal Value
With respect to normal value, the petitioner provided home-market
prices at which the foreign like product is offered for sale for
consumption in the exporting country, adjusted as required by the
statute. These home market prices were obtained directly from CBI, the
sole South African producer of the subject merchandise.
In calculating its estimated margins, the petitioner compared
prices for single pole B, C, D, and E frame HMCBs sold in the home
market with similar products offered for sale in the United States by
CBI USA. For purposes of initiation, however, we made an adjustment to
the estimated margin calculated for D frame HMCBs. Specifically, the
petitioner, in its April 14th petition, compared a home market price
for D-frame HMCBs with an amperage rating between 61 and 100 amperes to
a U.S. price for D frame HMCBs with an amperage rating between 10 and
50 amperes. Because the petitioner presented the Department with
several different home market prices for D frame HMCBs, we have
recalculated the estimated margin using the home-market price for D-
frame HMCBs with a comparable amperage rating (i.e., between 5 and 60
amperes). See Initiation Checklist, Re: Normal Value.
With this exception, we determined that the information the
petitioner used for the calculation of home-market price is adequate
and accurate and represents information reasonably available to it.
Fair-Value Comparison
Based on the data provided by the petitioner, there is reason to
believe that imports of HMCBs from South Africa are being, or are
likely to be, sold in the United States at less than fair value. As a
result of the comparison of CEP to normal value, we recalculated
estimated dumping margins for imports of HMCBs from South Africa that
range from 129.43 percent to 721.95 percent.
Allegations and Evidence of Material Injury and Causation
The petition alleges that the U.S. industry producing the domestic
like product is being materially injured and is threatened with
material injury by reason of the imports of the subject merchandise
sold at less than normal value. The petitioner contends that its
injured condition is evidenced by declining trends in market share,
pricing, production levels, profits, sales, and utilization of
capacity. Furthermore, the petitioner contends that injury and threat
of injury is evidenced by negative effects on its cash flow, ability to
raise capital, and growth. These allegations are supported by relevant
evidence including import data, lost sales, and pricing information.
The Department assessed the allegations and supporting evidence
regarding material injury and causation and determined that these
allegations are supported by accurate and adequate evidence and meet
the statutory requirements for initiation (see Initiation Checklist
dated May 5, 2003, Re: Material Injury).
Initiation of Antidumping Investigation
Based upon our examination of the petition on HMCBs from South
Africa and other information reasonably available to the Department, we
find that the petition meets the requirements of section 732 of the
Act. Therefore, we are initiating an antidumping duty investigation to
determine whether imports of HMCBs from South Africa are being, or are
likely to be, sold in the United States at less than fair value. Unless
postponed, we will make our preliminary determination no later than 140
days after the date of this initiation.
Distribution of Copies of the Petition
In accordance with section 732(b)(3)(A) of the Act, a copy of the
public version of the petition has been
[[Page 25335]]
provided to the representatives of the government of South Africa. We
will attempt to provide a copy of the public version of the petition to
each producer named in the petition, as appropriate.
International Trade Commission Notification
We have notified the ITC of our initiation, as required by section
732(d) of the Act.
Preliminary Determination by the ITC
The ITC will preliminarily determine, no later than May 29, 2003,
whether there is a reasonable indication that imports of HMCBs are
causing material injury, or threatening to cause material injury, to a
U.S. industry. A negative ITC determination will result in this
investigation being terminated; otherwise, this investigation will
proceed according to statutory and regulatory time limits.
This notice is published pursuant to section 777(i) of the Act.
Dated: May 5, 2003.
Joseph A. Spetrini,
Acting Assistant Secretaryfor Import Administration.
[FR Doc. 03-11745 Filed 5-9-03; 8:45 am]
BILLING CODE 3510-DS-S