[Federal Register: June 10, 2003 (Volume 68, Number 111)]
[Notices]
[Page 34579-34582]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10jn03-27]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-885, A-533-834, A-428-838]
Notice of Initiation of Antidumping Duty Investigations: 4,4'-
Diamino-2,2'-Stilbenedisulfonic Acid (DAS) and Stilbenic Fluorescent
Whitening Agents (SFWA) from Germany, India, and the People's Republic
of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Initiation of Antidumping Duty Investigations.
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EFFECTIVE DATE: June 10, 2003.
FOR FURTHER INFORMATION CONTACT: David Layton at (202) 482-0371, AD/CVD
Enforcement Office 5, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Initiation of Investigations:
The Petitions
On May 14, 2003, the Department received petitions filed in proper
form by Ciba Specialty Chemicals Corporation (Ciba or petitioner). The
Department received supplemental information to the petitions from Ciba
on May 27, 2003 and May 30, 2003.
In accordance with section 732(b)(1) of the Tariff Act of 1930, as
amended (the Act), the petitioner alleges that imports of 4,4'-Diamino-
2,2'- stilbenedisulfonic acid (DAS) and stilbenic fluorescent whitening
agents (SFWA) from Germany, India, and the People's Republic of China
(PRC) are, 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
imports from Germany, India, and the PRC are materially injuring, or
are threatening to materially injure an industry in the United States.
The Department finds that the petitioner filed these petitions on
behalf of the domestic industry because it is an interested party as
defined in section 771(9)(C) of the Act and they have demonstrated
sufficient industry support with respect to each of the antidumping
investigations that it is requesting the Department to initiate. See
infra, ``Determination of Industry Support for the Petitions.''
Period of Investigation
The anticipated period of investigation (POI) for Germany and India
is April 1, 2002, through March 31, 2003; and October 1, 2002, through
March 31, 2003 for the PRC.
Scope of Investigations
These investigations cover 4,4'-diamino-2,2'-stilbenedisulfonic
acid (DAS) and stilbenic fluorescent whitening agents (SFWA). DAS is a
chemical compound used to produce SFWA. SFWA are synthetic organic
products normally used as fluorescent brightening agents in the
production of certain textiles, paper, and detergent. These
investigations cover all DAS and SFWA regardless of end use.
DAS is currently classifiable under subheading 2921.59.2000 of the
Harmonized Tariff Schedule of the United States (HTSUS). This tariff
classification only covers DAS. SFWA is currently classifiable under
subheading 3204.20.80 of the HTSUS. This tariff classification
represents a basket category which includes SFWA and other synthetic
organic coloring matter. Although the HTSUS subheadings are provided
for convenience and customs purposes, the written description of the
merchandise under investigation is dispositive.
During our review of the petitions, we sought additional
information from the petitioner concerning the scope of the
investigations. As a result of this supplemental information, we
modified the scope language proposed by the petitioner with regard to
the name of the subject merchandise and the description of the products
covered.\1\
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\1\ See Memorandum to the File Re: Change to Scope Description
(June 3, 2003).
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As discussed in the preamble to the Department's regulations
(Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296,
27323 (May 19, 1997)), we are setting aside a period for parties to
raise issues regarding product coverage. The Department encourages all
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, Room 1870, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW, Washington, DC 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 determinations.
Determination of Industry Support for the Petitions
Section 732(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 732(c)(4)(A) of the Act
provides that the Department's industry support determination, which is
to be made before the initiation of the investigation, be based on
whether a minimum percentage of the relevant industry supports the
petition. A petition satisfies 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. Moreover, 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 Department shall either
poll the industry or rely on other information in order to determine if
there is support for the petition.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers of a
[[Page 34580]]
domestic like product. Thus, to determine whether a petition has the
requisite industry support, the statute directs the Department to look
to producers and workers who produce the domestic like product. The
U.S. International Trade Commission (ITC), which is responsible for
determining whether ``the domestic industry'' has been injured, must
also determine what constitutes a domestic like product in order to
define the industry. While both the Department and the ITC must apply
the same statutory definition regarding the domestic like product
(section 771(10) of the Act), they do so for different purposes and
pursuant to a separate and distinct authority. In addition, the
Department's determination is subject to limitations of time and
information. Although this may result in different definitions of the
like product, such differences do not render the decision of either
agency contrary to the law.\2\
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\2\ 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 this case, the petitions cover a single class or kind of
merchandise, DAS and its commercial agent SFWA as defined in the
``Scope of Investigations'' section, above. The petitioner does not
offer a definition of domestic like product distinct from the scope of
the investigations. Thus, based on our analysis of the information
presented to the Department by the petitioner and interested parties,
we have determined that there is a single domestic like product which
is consistent with the definition of the ``Scope of the Investigation''
section above and have analyzed industry support in terms of this
domestic like product.
The Department has determined that, pursuant to section
732(c)(4)(A) of the Act, the petitions contain adequate evidence of
industry support and, therefore, polling is unnecessary. See Office of
AD Enforcement, Initiation Checklist: 4,4'-diamino-2,2'-
stilbenedisulfonic acid (DAS) and stilbenic fluorescent whitening
agents (SFWA) from Germany, India, and the People's Republic of China
(June 3, 2003) (the Initiation Checklist) at attachment II (on file in
the Central Records Unit, Room B-099 of the Department of Commerce).
On May 30, 2003, Bayer Chemicals Corporation (Bayer) submitted an
argument in opposition to the petition, and on June 3, 2003, 3V Inc.
also submitted an argument in opposition to the petition. However,
neither party provided sufficient evidence that would call into
question the sufficiency of the petitioner's industry support. See
Initiation Checklist at attachment II for further details. Therefore,
the Department has determined, based on information provided in the
petition, that the petitioner represents over 50 percent of total
production of the domestic like product. The petitioner is the only
U.S. producer of DAS and accounts for over 50 percent of U.S.
production of SFWA; thus, Ciba satisfies the requirements of section
732(c)(4)(A)(i) of the Act because it accounts for at least 25 percent
of the total production of the domestic like product. Furthermore, the
requirements of section 732(c)(4)(A)(ii) of the act are also met.
Accordingly, we determine that these petitions are filed on behalf of
the domestic industry within the meaning of section 732(b)(1) of the
Act. See the ``Injury Allegation'' section in the Initiation Checklist.
Initiation Standard for Cost Investigations
Pursuant to section 773(b) of the Act, the petitioner provided
information demonstrating reasonable grounds to believe or suspect that
sales in the home market of India were made at prices below the cost of
production (COP) and, accordingly, requested that the Department
conduct a country-wide sales-below-COP investigation in connection with
this investigation. The Statement of Administrative Action (SAA),
submitted to the Congress in connection with the interpretation and
application of the Uruguay Round Agreements Act (URAA), states that an
allegation of sales below COP need not be specific to individual
exporters or producers. The SAA states that ``Commerce will consider
allegations of below-cost sales in the aggregate for a foreign country,
just as Commerce currently considers allegations of sales at less than
fair value on a country-wide basis for purposes of initiating an
antidumping investigation.'' SAA, H.R. Doc. No. 103-316 at 833
(1994).Further, the SAA provides that section 773(b)(2)(A) of the Act
retains the requirement that before initiating such an investigation
the Department have ``reasonable grounds to believe or suspect'' that
below-cost sales have occurred. Reasonable grounds exist when an
interested party provides specific factual information on costs and
prices, observed or constructed, indicating that sales in the foreign
market in question are at below-cost prices. We have analyzed the
country-specific allegation as described below for India. Based on our
analysis, we found reasonable grounds to believe or suspect that sales
of DAS and SFWA in India were made at prices below cost. See the
``Normal Value'' section for India, below.
Export Price and Normal Value
The following are descriptions of the allegations of sales at less
than fair value upon which the Department based its decision to
initiate these investigations. The sources of data for the deductions
and adjustments relating to U.S. and home market prices, and
constructed value (CV) are discussed in greater detail in the
Initiation Checklist. Should the need arise to use any of this
information as facts available under section 776 of the Act in our
preliminary or final determinations, we may re-examine the information
and revise the margin calculations, if appropriate.
Germany
Export Price
The petitioner based export price (EP) on average unit values of
DAS imports from Germany during the POI. The petitioner derived such
values from import statistics under the HTSUS subheading 2921.59.2000.
See Initiation Checklist for further information.
Normal Value
With respect to normal value (NV), the petitioner calculated COM
based on the production costs of a German DAS manufacturer, Ciba
Spezialitatenschemie Grenzach GmbH, that is affiliated with the
petitioner, because home market prices and information related to third
country sales were unavailable during the fiscal year 2002. To
calculate selling, general and administrative expenses (SG&A) and
profit, the petitioner relied on amounts reported in the consolidated
financial statements for the 2002 fiscal year of Bayer AG, a German
producer of DAS. We relied on the cost data contained in the petition
except in the following instances.
1. We recalculated the selling, general and administrative (SG&A)
expenses amount per pound of DAS exclusive of
[[Page 34581]]
movement and import duty expenses. First, we calculated the SG&A rate
based on the amounts reported in the unconsolidated financial
statements for the 2002 fiscal year of Bayer AG. Second, we applied
this SG&A rate to the reported cost of manufacture (COM). Finally, we
deducted the amounts contained in the petition for shipping cost from
German port to U.S. port, and U.S. import duty from the calculated SG&A
amount per pound of DAS because the selling amount contained in the
unconsolidated financial statements may include the movement and duty
expenses.
2. We recalculated the financial expense amount per pound of DAS.
We calculated the financial expense rate based on the amounts reported
in the consolidated financial statements for the 2002 fiscal year of
Bayer AG. and applied this financial expense rate to the reported COM.
3. We calculated the profit amount per pound of DAS. We calculated
the profit rate as a percentage of cost of goods sold and SG&A amounts
reported in the unconsolidated financial statements for the 2002 fiscal
year of Bayer AG because these unconsolidated financial statements did
not itemize the financial expenses, but included them in the basket of
non-operating expenses. Therefore, we applied this profit rate to the
reported COM and the SG&A expense amount inclusive of shipping cost
from German port to U.S. port, and U.S. import duty.
4.We recalculated the CV by adding the reported COM to the
calculated SG&A, financial expense, and profit amounts as discussed
above.
The estimated dumping margins for subject merchandise from Germany,
based on a comparison between the U.S. prices and adjusted CV is 194.9
percent.
India
Export Price
The petitioner based EP on average unit values of DAS imports from
India during the POI. The petitioner derived such values from import
statistics under the HTSUS subheading 2921.59.2000.
Normal Value
With respect to NV, the petitioner provided a home market price for
DAS using a price quote obtained from its joint venture in India. This
price was quoted in U.S. dollars, FOB Hyderabad.
The petitioner has provided information demonstrating reasonable
grounds to believe or suspect that sales of DAS in the home market were
made at prices below the fully absorbed COP, within the meaning of
section 773(b) of the Act, and requested that the Department conduct a
country-wide sales-below-cost investigation. Pursuant to section
773(b)(3) of the Act, COP consists of the COM, SG&A expenses, financial
expenses, and packing expenses.
The petitioner calculated COM based on its own production
experience, adjusted for known differences between costs incurred to
produce DAS in the United States and in India using publicly available
data. For one particular raw material, oleum, we noted that the cost
was based on amounts purchased from two countries. In order to be
conservative in using this estimated cost, we recalculated the oleum
costs based on the lower per-unit purchase price. In addition, we also
corrected a mathematical error for the cost of another raw material
element.
To calculate overhead and SG&A expenses, the petitioner relied upon
amounts reported in the 2001-2002 financial statements of an Indian
chemical producer. The petitioner did not include packing costs in the
CV calculation. Based upon a comparison of the prices of the foreign
like product in the home market to the calculated COP of the product,
we find reasonable grounds to believe or suspect that sales of the
foreign like product were made below the COP, within the meaning of
section 773(b)(2)(A)(i) of the Act. Accordingly, the Department is
initiating a country-wide cost investigation.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioner also based NV for sales in India on CV. The petitioner
calculated CV using the same COM, overhead, and SG&A, and profit
expense figures used to compute the Indian home market costs.
Consistent with 773(e)(2) of the Act, the petitioner included in CV an
amount for profit.
The estimated dumping margin for subject merchandise from India,
based on a comparison of EP and home market price, is 35.7 percent. The
estimated dumping margin for India based on a comparison between EP and
CV is 139.61 percent.
PRC
Export Price
The petitioner based EP on average unit values of DAS imports from
the PRC during the POI. The petitioner derived such values from import
statistics under the HTSUS subheading 2921.59.2000.
Normal Value
With respect to NV, the petitioner provided CV based on Indian
surrogate values and the petitioner's own experience producing DAS (its
factors of production), adjusted for any known differences between the
petitioner's production process and the Chinese DAS production process.
Where the petitioner was unable to obtain Indian surrogate values for
material inputs, it used a value of zero for such inputs. We also
adjusted the value of high pressure steam to zero due to the lack of an
appropriate Indian surrogate value. Indian values were converted to
U.S. dollars using the exchange rates from the Department's website.
Where surrogate values were not contemporaneous with the POI, the
petitioner adjusted such values using wholesale price indices from
India. For SG&A expenses and profit, the petitioner relied upon amounts
reported in the 2001 financial reports of Atul Ltd. (India) and Daurala
Organics (India). The petitioner claims that said companies have
similar costs to those of a producer of the subject merchandise because
said companies produce chemicals similar to the subject merchandise.
The estimated dumping margin for the PRC, based on a comparison of
EP and CV, is 156.69 percent.
Fair Value Comparisons
Based on the data provided by the petitioner, there is reason to
believe that imports of DAS and SFWA from Germany, India, and the PRC
are being, or are likely to be, sold at less than fair value.
Allegations and Evidence of Material Injury and Causation
The petitioner alleges that the U.S. industry producing the
domestic like product is being materially injured, or is threatened
with material injury, by reason of the cumulated imports from Germany,
India, and the PRC of the subject merchandise sold at less than NV.
The petitioner contends that the industry's injured condition is
evident in the declining trends in net operating profits, net sales
volumes, domestic prices, revenue, profit-to-sales ratios, production
employment, capacity utilization, and domestic market share. The
allegations of injury and causation are supported by relevant evidence
including U.S. 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 properly supported by adequate evidence and meet the
statutory requirements for initiation. See the Initiation Checklist.
[[Page 34582]]
Initiation of Antidumping Investigations
Based upon our examination of the petitions covering DAS and SFWA,
we have found that they meet the requirements of section 732 of the
Act. See the Initiation Checklist. Therefore, we are initiating
antidumping duty investigations to determine whether imports of DAS and
SFWA from Germany, India and the PRC are being, or are likely to be,
sold in the United States at less than fair value. Unless this deadline
is extended, we will make our preliminary determinations no later than
140 days after the date of these initiations.
Distribution of Copies of the Petitions
In accordance with section 732(b)(3)(A) of the Act, a copy of the
public version of each petition has been provided to the
representatives of the governments of Germany, India, and the PRC. We
will attempt to provide a copy of the public version of each petition
to each exporter named in the petitions, as provided for under 19 CFR
351.203(c)(2).
ITC Notification
We have notified the ITC of our initiations as required by section
732(d) of the Act.
Preliminary Determinations by the ITC
The ITC will determine no later than June 30, 2003, whether there
is a reasonable indication that imports of DAS and SFWA from Germany,
India, and the PRC are causing material injury, or threatening to cause
material injury, to a U.S. industry. A negative ITC determination for
any country will result in the investigation being terminated with
respect to thatcountry; otherwise, these investigations will proceed
according to statutory and regulatory time limits.
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: June 3, 2003.
Joseph Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-14592 Filed 6-9-03; 8:45 am]
BILLING CODE 3510-DS-S