03-4651. Notice of Initiation of Countervailing Duty Investigation: Prestressed Concrete Steel Wire Strand From India

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Initiation of countervailing duty investigation.

EFFECTIVE DATE:

February 27, 2003.

FOR FURTHER INFORMATION CONTACT:

Robert Copyak, Alicia Kinsey, or Jim Neel, AD/CVD Enforcement, Office VI, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; [phone], [phone], or [phone], respectively.

Initiation of Investigation

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department of Commerce's (the Department's) regulations are references to the provisions codified at 19 CFR part 351 (2002).

The Petition

On January 31, 2003, the Department received a petition filed in proper form by the following parties: American Spring Wire Corp., Insteel Wire Products Company, and Sumiden Wire Products Corp. (collectively, the petitioners). The Department received from the petitioners information supplementing the petition on February 12, 2003.

In accordance with section 702(b)(1) of the Act, the petitioners allege that manufacturers, producers, or exporters of prestressed concrete steel wire strand (“PC strand”) in India receive countervailable subsidies within the meaning of section 701 of the Act.

The Department finds that the petitioners filed this petition on behalf of the domestic industry because they are interested parties as defined in sections 771(9)(C) and (d) of the Act. The petitioners have demonstrated sufficient industry support with respect to the countervailing duty investigation that they are requesting the Department to initiate (see the Determination of Industry Support for the Petition section below).

Scope of Investigation

For purposes of this investigation, prestressed concrete steel wire (PC strand) is steel strand produced from wire of non-stainless, non-galvanized steel, which is suitable for use in prestressed concrete (both pretensioned and post-tensioned) applications. The product definition encompasses covered and uncovered strand and all types, grades, and diameters of PC strand.

The merchandise under this investigation is currently classifiable under subheadings 7312.10.3010 and 7312.10.3012 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and Customs purposes, the written description of the merchandise under investigation is dispositive.

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 determination.

Consultations

In accordance with Article 13.1 of the Agreement on Subsidies and Countervailing Measures and section 702(b)(4)(A)(ii) of the Act, on February 13, 2003, we invited the Government of India (“GOI”) to hold consultations with us regarding this petition. Representatives of the GOI accepted our offer for consultations, but ultimately were unable to meet prior to this initiation. See the February 20, 2003, memorandum to the file titled “Invitation for Consultations with the Government of India Regarding the Countervailing Duty Petition on Prestressed Concrete Steel Wire Strand from India.” We continue to extend the opportunity to meet for consultations to the GOI.

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. 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 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 (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 separate and distinct authorities. 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.^[1]

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.

The petition covers PC strand as defined in the Scope of Investigation section, above, a single class or kind of merchandise. The Department has no basis on the record to find the petitioners' definition of the domestic like product to be inaccurate. The Department, therefore, has adopted the domestic like product definition set forth in the petition.

We determined, based on information provided in the petition, that the petitioners have demonstrated industry support representing over 50 percent of total production of the domestic 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 702(c)(4)(A)(i) of the Act are met. Furthermore, because the Department received no opposition to the petition, the domestic producers or workers who support the petition account for 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. Thus, the requirements of section 702(c)(4)(A)(ii) are also met. Because the Department has determined that, pursuant to section 702(c)(4)(A) of the Act, the petition contains adequate evidence of industry support, polling is unnecessary. 702(c)(4)(D) of the Act; see Import Administration Countervailing Duty Investigation Initiation Checklist (“Initiation Checklist”), Industry Support Section, February 20, 2003, on file in the Central Records Unit (CRU) of the main Department of Commerce building. Accordingly, we determine that this petition is filed on behalf of the domestic industry within the meaning of section 702(b)(1) of the Act. See the Injury Allegation section in the Initiation Checklist.

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 and Evidence of Material Injury and Causation

The petitioners allege that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of subsidized imports of the subject merchandise.

The petitioners contend 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. Customs import data, lost sales, and pricing information. We have assessed the allegations and supporting evidence regarding material injury and causation, and we have determined that these allegations are properly supported by adequate evidence and meet the statutory requirements for initiation. See the Injury Allegation section of the Initiation Checklist.

Period of Investigation (POI)

The petitioners contend that the POI is April 1, 2001 through March 31, 2002, which is the last completed fiscal year for each of the alleged producers/exporters of the subject merchandise. If these companies do not have the same fiscal year then the POI would be calendar year 2001.

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 Initiation Checklist):

A. Government of India Programs

1. Duty Entitlement Passbook Scheme (DEPBS)

2. Pre-Shipment and Post-Shipment Export Financing

3. Export Promotion of Capital Goods Scheme (EPCGS)

4. Loans from the Steel Development Fund (SDF)

5. Exemption of Export Credit from Interest Taxes

6. Advance Licenses

7. Income Tax Exemption Scheme (ITES) (Sections 10A, 10B and 80 HHC)

8. Government of India Loan Guarantees

B. Programs in the State of Maharashtra

1. Sales Tax Incentives

2. Capital Incentive Scheme

3. Octroi Refund Scheme

4. Electricity Duty Exemption Scheme

5. Exemption of Sales and Purchase Taxes for Certain Investments Related to Automobiles or Automobile Components

C. Program in the State of Bihar

1. Sales Tax Incentives

D. Programs in the State of Jharkhand

1. Sales Tax Incentives

2. Captive Electricity Generative Plant Subsidy

3. Interest Subsidy

4. Stamp Duty and Registration

5. Pollution Control Equipment Subsidy

6. Mega Units

7. Captive Electricity Tax Exemptions

E. Program in the State of Gujarat

1. Sales Tax Incentives

We are not 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 Initiation Checklist):

D. Government of India Program

1. Special Import Licenses (SILs)

E. Program in the State of Bihar

1. Power Incentives

C. Programs in the State of Gujarat

1. Incentives to Premier and Prestigious Units

2. Incentives for Private Sector Investments in Infrastructure Projects

3. Government Infrastructure Assistance to Medium and Large Industries

4. Promotion of Specific Industrial Sectors

Initiation of Countervailing Duty Investigation

The Department has examined the countervailing duty petition on PC strand from India, and found that it complies with 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 PC strand from India receive countervailable subsidies.

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 GOI. 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 by March 17, 2003, whether there is a reasonable indication that imports of PC strand from India are causing material injury, or threatening to cause 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: February 20, 2003.

Faryar Shirzad,

Assistant Secretary for Import Administration.

Footnotes

1.  See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp. 639, 642-44 (CIT 1988); High Information Content Panel Displays and Display Glass from Japan: Final Determination; Recission of Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-81 (July 16, 1991).