[Federal Register: June 10, 2003 (Volume 68, Number 111)]
[Page 34582-34584]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



International Trade Administration


Notice of Initiation of Countervailing Duty Investigation: 4,4'-
Diamino-2,2'-Stilbenedisulfonic Acid (DAS) and Stilbenic Fluorescent 
Whitening Agents (SFWA) from India

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: June 10, 2003.

FOR FURTHER INFORMATION CONTACT: Dana Mermelstein at (202) 482-1391, or 
Sean Carey (202) 482-3964; Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230.


Initiation of Investigation

The Petition
    On May 14, 2003, the Department of Commerce (the Department) 
received a petition filed in proper form by Ciba Specialty Chemicals 
Corp. (Ciba) (petitioner). See 4,4'-Diamino-2,2'-Stilbenedisulfonic 
Acid (DAS) Chemsitry from the PRC, India, and Germany (Petition). The 
Department received information supplementing the petition, on May 27 
and May 29, 2003. See Response to the Department's Supplemental 
Questions Regarding the Countervailing Duty Investigations of Certain 
4,4'-Diamino-2,2'-Stilbenedisulfonic Acid (DAS) Chemsitry from the PRC, 
India, and Germany (May 27, 2003) (CVD Supplemental) and, Response to 
Department's Supplemental Questions Regarding the Scope, Standing and 
Injury Portions of the Petition Regarding Certain 4,4'-Diamino-2,2'-
Stilbenedisulfonic Acid (DAS) Chemsitry from India (May 29, 2003) 
(Scope, Standing and Injury Supplemental).
    In accordance with section 702(b)(1) of the Act, petitioner alleges 
that manufacturers, producers, or exporters of DAS and SFWA in India 
receive countervailable subsidies within the meaning of section 701 of 
the Act.
    The Department finds that petitioner filed this petition on behalf 
of the domestic industry because it is an interested party as defined 
in section 771(9)(C) of the Act and has demonstrated sufficient 
industry support with respect to the antidumping and countervailing 
duty investigations that it is requesting the Department to initiate. 
See Determination of Industry Support for the Petition, below.

Period of Investigation

    In accordance with 19 CFR 351.204 (b)(2), the anticipated period of 
investigation (POI) is January 1, 2002, through December 31, 2002.

Scope of Investigation

    This investigation covers, 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. This investigation 
covers 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 petition, we sought additional information 
from the petitioner concerning the scope of the investigation. 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\

    \1\ See Memorandum to the File Re: Change to Scope Description 
(June 3, 2003).

    As discussed in the preamble to the Department's regulations, we 
are setting aside a time period for parties to raise issues regarding 
product coverage. See Antidumping Duties; Countervailing Duties; Final 
Rule, 62 FR 27296, 27323 (May 19, 1997). The Department encourages all 
parties to submit such comments within 20 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, 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.

[[Page 34583]]


    In accordance with Article 13.1 of the Agreement on Subsidies and 
Countervailing Measures and section 702(b)(4)(A)(ii) of the Tariff Act 
of 1930, we held consultations with the Government of India 
(GOI'') regarding this petition on May 29, 2003. See 
Memorandum to the File from Sean Carey: Consultations with the 
Government of India Regarding the Countervailing Duty Petition on 4,4'-
Diamino-2,2'-Stilbenedisulfonic Acid (DAS) and DAS Applicators commonly 
identified as Stilbenic Fluorescent Whitening Agents (SFWA) from India, 
dated May 30, 2003.

Determination of Industry Support for the Petition

    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(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 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. See section 702(c)(4)(A). Moreover, 
section 702(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 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\

    \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).

    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 
    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 
702(c)(4)(A) of the Act, the petition contains adequate evidence of 
industry support and, therefore, polling is unnecessary. See 
Countervailing Duty Investigation Initiation Checklist: 4,4'-Diamino-
2,2'-Stilbenedisulfonic Acid and Stilbenic Fluorescent Whitening Agents 
(DAS and SFWA) from India, (June 3, 2003) (CVD Initiation Checklist), 
on file in the Central Records Unit, room B-099 of the main Department 
of Commerce building.
    For each country, 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 702(c)(4)(A)(ii) of 
the act are also met. Although, 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, they did not provide evidence that would 
call into question the sufficiency of Ciba's industry support. 
Accordingly, we determine that these petitions are filed on behalf of 
the domestic industry within the meaning of section 702(b)(1) of the 
Act. See CVD Initiation Checklist at Attachment II for further details.

Injury Test

    Because India is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, section 701(a)(2) applies to this 
investigation. Accordingly, the ITC must determine whether imports of 
the subject merchandise from India materially injure, or threaten 
material injury to, a U.S. industry.

Allegations of Subsidies

    Section 702(b) of the Act requires the Department to initiate a 
countervailing duty proceeding whenever an interested party files a 
petition, on behalf of an industry, that; (1) alleges the elements 
necessary for an imposition of a duty under section 701(a), and (2) is 
accompanied by information reasonably available to petitioners 
supporting the allegations.
    We are initiating an investigation of the following programs 
alleged in the petition to have provided countervailable subsidies to 
manufacturers, producers and exporters of the subject merchandise in 
India (a full description of each program is provided in the CVD 
Initiation Checklist):
    1. The Duty Entitlement Passbook Scheme (DEPB)/ Post-Export Credits
    2. Pre-Shipment and Post-Shipment Export Financing
    3. Export Promotion Capital Goods Scheme (EPCGS)
    4. Income Tax Exemption Scheme (Sections 10A, 10B, and 80 HHC)
    5. Exemption of Export Credit from Interest Taxes
    6. Export Processing Zones/ Export-Oriented Units Programs
    7. Market Development Assistance (MDA)
    8. Special Imprest Licenses
    We are not including in our investigation the following programs 
alleged to be benefitting producers and exporters of the subject 
merchandise in

[[Page 34584]]

India. The full discussion of our bases for not initiating on these 
programs is set forth in the CVD Initiation Checklist:
    1. Import Mechanisms (Sale of Import Licenses)
    2. Duty Drawback on Excise Taxes

Allegations and Evidence of Material Injury and Causation

    Petitioner alleges that the U.S. industry producing the domestic 
like product is being materially injured, or threatened with material 
injury, by reason of subsidized imports from India of the subject 
merchandise. Petitioner contends that the industry's injured condition 
is evident in the reduced levels of production and capacity 
utilization, decline in profits, decline in research and development, 
decreased U.S. market share, lost sales and revenue, and price 
suppression and depression. The allegations of injury and causation are 
supported by relevant evidence including lost sales and pricing 
information. We have assessed the allegations and supporting evidence 
regarding material injury and causation, and have determined that these 
allegations are properly supported by accurate and adequate evidence 
and meet the statutory requirements for initiation. See CVD Initiation 

Initiation of Countervailing Duty Investigation

    Based on our examination of the petition on DAS and SFWA, and 
petitioner's responses to our requests for supplemental information 
clarifying the petition, we have found that the petition meets the 
requirements of section 702(b) of the Act. Therefore, in accordance 
with section 702(b) of the Act, we are initiating a countervailing duty 
investigation to determine whether manufacturers, producers, or 
exporters of DAS and SFWA from India receive countervailable subsidies. 
Unless the deadline is extended, we will make our preliminary 
determination no later than 65 days after the date of this initiation.

Distribution of Copies of the Petition

    In accordance with section 702(b)(4)(A)(i) of the Act, a copy of 
the public version of the petition has been provided to the 
representatives of the government of India. We will attempt to provide 
a copy of the public version of the petition to each exporter named in 
the petition, as provided for under 19 CFR 351.203(c)(2).

International Trade Commission Notification

    Pursuant to section 702(d) of the Act, we have notified the ITC of 
our initiation.

Preliminary Determination by the ITC

    The ITC will determine, no later than June 28, 2003, whether there 
is a reasonable indication that imports of subject merchandise from 
India are materially injuring, or threatening material injury to, a 
U.S. industry. A negative ITC determination will result in the 
investigation being terminated; otherwise, this investigation 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 A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-14591 Filed 6-9-03; 8:45 am]