99-5943. Initiation of Antidumping Duty Investigation: Creatine From the People's Republic of China  

  • [Federal Register Volume 64, Number 46 (Wednesday, March 10, 1999)]
    [Notices]
    [Pages 11834-11836]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 99-5943]
    
    
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    DEPARTMENT OF COMMERCE
    
    International Trade Administration
    [A-570-852]
    
    
    Initiation of Antidumping Duty Investigation: Creatine From the 
    People's Republic of China
    
    AGENCY: Import Administration, International Trade Administration, 
    Department of Commerce.
    
    EFFECTIVE DATE: March 10, 1999.
    
    FOR FURTHER INFORMATION CONTACT: Marian Wells, Blanche Ziv or Rosa 
    Jeong, Import Administration, International Trade Administration, U.S. 
    Department of Commerce, 14th Street and Constitution Avenue, NW, 
    Washington, DC 20230; telephone: (202) 482-6309, (202) 482-4207, or 
    (202) 482-3853, 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 to 19 CFR Part 351 (1998).
    
    The Petition
    
        On February 12, 1999, the Department received a petition filed in 
    proper form by Pfanstiehl Laboratories, Inc., referred to hereinafter 
    as ``the petitioner.'' The petitioner filed supplemental information to 
    the petition on March 1, 1999.
        In accordance with section 732(b) of the Act, the petitioner 
    alleges that imports of creatine from the People's Republic of China 
    (PRC) 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 an industry in the United States.
        The Department finds that the 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 it represents, at a 
    minimum, the required proportion of the United States industry (see 
    Determination of Industry Support for the Petition section below).
    
    Scope of Investigation
    
        For purposes of this investigation, the product covered is commonly 
    referred to as creatine monohydrate or creatine. The chemical name for 
    creatine covered under this investigation is N-(aminoiminomethyl)-N-
    methylglycine monohydrate. The Chemical Abstracts Service (CAS) 
    registry numbers for this product are 57-00-1 and 6020-87-7. Pure 
    creatine is a white, tasteless, odorless powder, that is a naturally 
    occurring metabolite found in muscle tissue. The merchandise subject to 
    this investigation is classifiable under subheading 2925.20.90 of the 
    Harmonized Tariff Schedule of the United States (HTSUS). Although the 
    HTSUS subheading is provided for convenience and customs purposes, the 
    written description of the merchandise under investigation is 
    dispositive.
        During our review of the petition, we discussed the scope with the 
    petitioner to ensure the petition accurately reflects the product 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 parties to raise issues regarding 
    product coverage. 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 at 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 our 
    preliminary determination.
    
    Determination of Industry Support for the Petition
    
        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 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 771(4)(A) of the Act defines the ``industry'' as the 
    producers of a
    
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    domestic like product. Thus, to determine whether the petition has the 
    requisite industry support, the Act directs the Department to look to 
    producers and workers who account for production of 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 authority. In addition, the 
    Department's determination is subject to limitations of time and 
    information. Although this may result in different definitions of the 
    domestic 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 that 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.
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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 Therefore from Japan: Final Determination; 
    Rescission of Investigation and Partial Dismissal of Petition, 56 FR 
    32376, 32380-81 (July 16, 1991).
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        The domestic like product referred to in the petition is the single 
    domestic like product defined in the ``Scope of Investigation'' section 
    above. The Department has no basis on the record to find this 
    definition of the domestic like product to be inaccurate. The 
    Department, therefore, has adopted this domestic like product 
    definition.
        On February 19, 1999, the ITC presented us with information 
    indicating that there are three additional producers of the domestic 
    like product that were not included in the petition. Subsequently, our 
    research also revealed one additional producer of the domestic like 
    product not included in the petition. To determine whether the 
    petitioner met the statutory requirement cited above, we contacted all 
    companies identified by the ITC and the Department as well as the two 
    companies included in the petition. Based on production data supplied 
    by the petitioner and collected by the Department and now on the 
    record, we determine that the petition has been filed on behalf of the 
    domestic industry within the meaning of section 732(b)(1) of the Act. 
    See  Initiation Checklist dated March 4, 1999 (public version on file 
    in the Central Records Unit of the Department of Commerce, Room B-099) 
    (``Initiation Checklist'').
    
    Export Price and Normal Value
    
        The following is a description of the allegation of sales at less 
    than fair value upon which our decision to initiate this investigation 
    is based. Should the need arise to use any of this information in our 
    preliminary or final determination for purposes of facts available 
    under section 776 of the Act, we may re-examine the information and 
    revise the margin calculations, if appropriate.
        The petitioner identified five potential PRC exporters and 
    producers of creatine. The petitioner based export price on offers for 
    sale of the subject merchandise to U.S. purchasers by PRC exporters in 
    November 1998 and January 1999. From these starting prices, the 
    petitioner deducted international freight, marine insurance, and 
    foreign brokerage and handling. The petitioner based international 
    freight and marine insurance fees on current quotations from a U.S. 
    freight forwarding company. In order to calculate foreign brokerage and 
    handling, the petitioner used the value of Indian brokerage and 
    handling charges, claiming that the petitioner does not have 
    information on the costs associated with brokerage and handling 
    incurred in the PRC prior to export to the United States. The foreign 
    brokerage and handling charges, which were based on the Department's 
    ``Index of Factor Values for Use in Antidumping Duty Investigations 
    Involving Products From the PRC,'' dated June 1996 (``Index of Factor 
    Values''), were adjusted for inflation using the Indian Wholesale Price 
    Index (WPI).
        Because the PRC is considered a nonmarket economy (NME) country 
    under section 771(18) of the Act, the petitioner based normal value 
    (NV) on the factors of production valued in a surrogate country, in 
    accordance with section 773(c)(3) of the Act. The petitioner selected 
    India as the most appropriate surrogate market economy. For the factors 
    of production, the petitioner used its own factor inputs and 
    consumption data for materials, labor and energy, based on the 
    production process that the petitioner employed in 1993 and 1994. The 
    petitioner did not include an amount for representative capital costs, 
    including depreciation, as provided in subsection 773(c)(3)(D) of the 
    Act. Thus, petitioner potentially understated costs, thereby providing 
    a conservative calculation of the alleged dumping. According to 
    information presented by the petitioner, the operation of the PRC 
    producers of the subject merchandise has not reached the level of 
    technology and efficiency represented by the petitioner's present 
    manufacturing process. As such, the petitioner alleged that its 
    production process of 1993 and 1994 most closely approximates that 
    currently being utilized by the PRC producers of the subject 
    merchandise. Where the 1993 and 1994 consumption data were unavailable 
    (i.e., electricity and water), the petitioner used its current data.
        Materials were valued based on Indian prices obtained from the 
    petitioner's market research of publicly available information and 
    published price lists. Labor was valued using the regression-based wage 
    rate for the PRC provided by the Department, in accordance with 19 CFR 
    351.408(c)(3). The values for water and electricity were obtained from 
    international publications containing the prices applicable to India. 
    The natural gas value was based on the Department's Index of Factor 
    Values. The petitioner also valued the cost of disposing the waste 
    generated in the production process using its own cost information. The 
    petitioner used its own cost of waste disposal as facts available 
    because it has no direct knowledge of the actual means of disposing of 
    waste by the PRC producers. For factory overhead, selling, general and 
    administrative expenses, and profit, the petitioner applied rates 
    derived from information gathered from the Reserve Bank of India 
    Bulletin. Packing factors were based on the Department's Index of 
    Factor Values.
    
    Fair Value Comparisons
    
        Based on the data provided by the petitioner, there is reason to 
    believe that imports of creatine from the PRC are being, or are likely 
    to be, sold at less than fair value. Based on a comparison of EP to NV, 
    the petitioner's calculated dumping margins range from 120.9 percent to 
    153.7 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 NV. The allegations of injury and causation are 
    supported by relevant evidence including U.S. Customs import data, lost 
    sales, and pricing information. The
    
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    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.
    
    Allegation of Critical Circumstances
    
        The petitioner has alleged that critical circumstances exist and 
    has asked the Department to make an expedited finding. To support its 
    allegation, the petitioner has provided evidence in the petition in the 
    form of PIERS data showing, among other things, a trend of increased 
    imports of the subject merchandise from the third to the fourth quarter 
    of 1998. Specifically, petitioner contends that creatine imports from 
    the PRC surged more than 150 percent from the third to the fourth 
    quarter. The petitioner also provided evidence suggesting the person by 
    whom, or for whose account, the merchandise is imported knew or should 
    have known that the merchandise was being sold at less than fair value 
    and that there was likely to be material injury as a result. Petitioner 
    argues that its January 25, 1999 press release regarding alleged 
    dumping of creatine in the United States provides the basis for this 
    knowledge, and that the Department has accepted similar evidence of 
    knowledge in other cases. See Preliminary Determination of Critical 
    Circumstances: Certain Flat-Rolled Carbon Quality Steel Products from 
    Japan and the Russian Federation, 63 FR 65750, 65751 (November 30, 
    1998). We find that the petitioner has alleged the elements of critical 
    circumstances and supported them with reasonably available information. 
    For these reasons, we will investigate this matter further and will 
    make a preliminary determination based on available information at the 
    appropriate time in accordance with 19 CFR 351.206. See Initiation 
    Checklist.
    
    Initiation of Antidumping Investigation
    
        Based on our examination of the petition, we have found 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 creatine from 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 determination by 
    July 22, 1999.
    
    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 provided to the representatives 
    of the government of the PRC.
    
    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 determine by March 29, 1999, whether there is a 
    reasonable indication that an industry in the United States is 
    materially injured, or is threatened with material injury by reason of 
    imports of creatine from the PRC. 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 published in accordance with section 777(i) of the 
    Act.
    
        Dated: March 4, 1999.
    Robert S. LaRussa,
    Assistant Secretary for Import Administration.
    [FR Doc. 99-5943 Filed 3-9-99; 8:45 am]
    BILLING CODE 3510-DS-P
    
    
    

Document Information

Effective Date:
3/10/1999
Published:
03/10/1999
Department:
International Trade Administration
Entry Type:
Notice
Document Number:
99-5943
Dates:
March 10, 1999.
Pages:
11834-11836 (3 pages)
Docket Numbers:
A-570-852
PDF File:
99-5943.pdf