[Federal Register Volume 63, Number 43 (Thursday, March 5, 1998)]
[Notices]
[Pages 10822-10824]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5741]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-409-801, C-409-802]
Initiation of Antidumping and Countervailing Duty Investigations:
Butter Cookies in Tins from Denmark
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: March 5, 1998.
FOR FURTHER INFORMATION CONTACT: Robert Copyak (antidumping
investigation) or Christopher Cassel (countervailing duty
investigation), Office of CVD/AD Enforcement VI, International Trade
Administration, U.S. Department of Commerce, Room 40120, 14th Street
and Constitution Avenue, N.W., Washington, DC 20230; telephone (202)
482-2786.
INITIATION OF INVESTIGATIONS:
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's regulations are
to the current regulations published in the Federal Register on May 19,
1997 (62 FR 27296).
The Petition
On February 6, 1998, the Department of Commerce (``the
Department'')
[[Page 10823]]
received a petition filed in proper form by Hearthside Baking Company,
Inc., D/B/A Maurice Lenell Cooky Co. (``the petitioner'').
Petitioner alleges, in accordance with section 702(b) of the Act,
that producers and/or exporters of butter cookies in tins from Denmark
receive countervailable subsidies within the meaning of section 701 of
the Act, and, in accordance with section 732(b) of the Act, that
imports of butter cookies in tins from Denmark 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. Petitioner also alleges that imports
of such butter cookies in tins are materially injuring or threaten
material injury to an industry in the United States.
The Department finds that petitioner filed the 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 has demonstrated sufficient
industry support (see discussion below).
Scope of Investigation
For purposes of the antidumping and countervailing duty
investigations, the products covered are butter cookies in tins. Butter
cookies are flat baked sweet biscuits made from a mixture of
ingredients which may include, but are not limited to butter, flour,
eggs, and sugar. As defined by the U.S. Food and Drug Administration
Compliance Policy Guide 7102.06, Chapter 5, Sec. 505.200, butter
cookies are distinguishable from all other cookies in that ``all of the
shortening ingredient is butter.'' The butter cookies covered by these
investigations are only those in hard containers (``tins''), which
include, but are not limited to, those that are made of metal, and are
round, printed with colorful decorative logos and/or pictures, and
which have closeable lids.
The merchandise subject to these investigations is classifiable
under subheadings 1905.30.0041 and 1905.30.0049 of the Harmonized
Tariff Schedule of the United States (``HTS''). Although the HTS
subheadings are provided for convenience and Customs purposes, the
written description of the merchandise under investigation is
dispositive.
Consultations
On February 20, 1998, in accordance with section 702(b)(4)(A)(ii)
of the Act, the Department held consultations with representatives of
the European Union and the Government of Denmark about the
countervailing duty petition. The officials expressed concerns about
the definition of the like product. See Tab B of Antidumping and
Countervailing Duty Checklist (``Checklist''), dated February 26, 1998,
which is on file in public version form in the public file in room B-
099 of the main Commerce building. The officials also expressed
concerns about the subsidy allegations made in the countervailing duty
petition and, subsequently, submitted information regarding the alleged
subsidy programs. See ex parte memorandum to file dated February 26,
1998, Consultation with European Union and Government of Denmark
Representatives Regarding the Countervailing Duty Petition on Butter
Cookies in Tins from Denmark, which is on file in the public file in
room B-099 of the main Commerce building. We considered the concerns
expressed by the representatives of the European Union and the
Government of Denmark for purposes of this initiation.
Determination of Industry Support for the Petition
Sections 702(b)(1) and 732(b)(1) of the Act require that a petition
be filed on behalf of the domestic industry. Sections 702(c)(4)(A) and
732(c)(4)(A) of the Act provide 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 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 account for production
of the domestic like product. The 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 provision regarding the domestic like product
(section 771(10) of the Act), they do so for different purposes and
pursuant to separate and distinct statutory 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
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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 Therefor 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 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 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 the
petition's definition of the domestic like product to be inaccurate.
The Department has adopted the domestic like product definition set
forth in the petition, making only minor adjustments for clarification
purposes. In this case, the petitioner established industry support
above the statutory requirement. See Tab B of Checklist which is on
file in public version form in the public file in room B-099 of the
main Commerce building. Accordingly, the Department determines that the
petition is filed on behalf of the domestic industry within the meaning
of sections 702(b)(1) and 732(b)(1) of the Act.
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 the antidumping
duty investigation is based. Should the need arise to use any of this
information in our preliminary or final determinations 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 several exporters and producers of butter
cookies in tins from Denmark. Petitioner provided allegations of sales
at less than fair value based on export price (``EP'') and constructed
export price (``CEP''), within the meaning of sections 772(a) and
772(b) of the Act, and based on normal value (``NV''), within the
meaning of section 773 of the Act. The petitioner based EP on price
quotes U.S. buyers received from Danish companies. The petitioner
calculated a net U.S.
[[Page 10824]]
price by subtracting the freight costs in Denmark as provided in a
market research report (``Foreign Market Research Report'')
commissioned by petitioner. We discussed the information contained in
this report with the author of the report. See Tab C of Checklist which
is on file in public version form in the public file in room B-099 of
the main Commerce building. The petitioner subtracted the freight costs
to the United States to arrive at an ex-factory price. Petitioner
provided separate EP calculations using freight costs to the United
States based on U.S. Census Import Statistics, and freight costs to the
United States based on information contained in the Foreign Market
Research Report.
In deriving the CEP, the petitioner began with the price offered to
a U.S. buyer from a sales broker that was not related to the Danish
producer or its U.S. subsidiary. Next, the petitioner subtracted a
loyalty discount offered by Danish producers. Then, the petitioner
subtracted the freight cost inside Denmark. As mentioned above, this
freight cost was obtained from the Foreign Market Research Report.
Next, the petitioner subtracted the freight cost to the United States
using as sources both U.S. Census data as well as data contained in the
Foreign Market Research Report. Finally, the petitioner subtracted the
freight cost inside the United States as provided by a U.S. shipping
company, to arrive at the ex-factory price.
Petitioner calculated NV based on information contained in the
Foreign Market Research Report. Based on a sales receipt and personal
observations provided by the foreign market researcher, petitioner
obtained a range of retail prices in Denmark. Then, the petitioner
derived the price to the retailer by subtracting a mark-up provided by
the researcher from the retail price. Next, the petitioner calculated
the price to the wholesaler by subtracting from the price to the
retailer the administrative cost at the wholesale level as provided by
the researcher. Finally, by subtracting value-add tax and the
transportation cost provided by the researcher, the petitioner arrived
at NV.
Fair Value Comparisons
Based on the data provided by the petitioner, there is reason to
believe that imports of butter cookies in tins from Denmark are being,
or are likely to be, sold in the United States at less than fair value.
Subsidy Programs
We are including in our investigation the following programs
alleged in the petition to have provided subsidies to producers and/or
exporters of the subject merchandise in Denmark:
European Union Program
Export Restitution Payments on Butter, Sugar and Wheat Flour
Government of Denmark Programs
1. Export Credit and Insurance Program
2. Export Training Program
3. Assistance for Export Groups
We are not including in our investigation the following program
alleged to be benefitting producers and exporters of the subject
merchandise in Denmark:
International Tender Program
Information provided in the petition (see Exhibit 22) indicates
that this program provides assistance to Danish companies bidding on
deliveries abroad of projects, consulting, services or equipment.
Because the merchandise subject to this investigation does not fall
within the type of items enumerated (i.e., deliveries abroad of
projects, consulting, services or equipment), this program does not
apply to producers of butter cookies. Therefore, we are not initiating
an investigation of this program.
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, or is threatened with
material injury, by reason of imports of the subject merchandise being
sold at less than fair value and benefitting from the bestowal of
countervailable subsidies. The allegations of injury and causation are
supported by relevant evidence including business proprietary data from
the petitioner and the Danish export statistics provided in the
petition. The Department assessed the allegations and supporting
evidence regarding material injury and causation and determined that
these allegations are sufficiently supported by accurate and adequate
evidence and meet the statutory requirements for initiation. See Tab E
of the Checklist which is on file in public version form in the public
file in room B-099 of the main Commerce building.
Initiation of Antidumping and Countervailing Duty Investigations
We have examined the petition on butter cookies in tins and have
found that it meets the requirements of sections 702 and 732 of the
Act. Therefore, we are initiating antidumping and countervailing duty
investigations to determine whether imports of butter cookies in tins
from Denmark are being, or are likely to be, sold in the United States
at less than fair value and whether producers and/or exporters of
butter cookies in tins from Denmark received subsidies. Unless
extended, we will make our preliminary determinations for the
countervailing duty investigation no later than May 4, 1998 and for the
antidumping duty investigation no later than July 16, 1998.
Distribution of Copies of the Petitions
In accordance with sections 702(b)(4)(A)(i) and 732(b)(3)(A) of the
Act, and Sec. 351.203(c)(2) of the Department's regulations, copies of
the public version of the petition have been provided to the
representatives of the Government of Denmark and to representatives of
the European Union. We will attempt to provide a copy of the public
version of the petition to each exporter named in the petition.
ITC Notification
We have notified the ITC of our initiations, as required by
sections 702(d) and 732(d) of the Act, and Sec. 351.203(c)(1) of the
Department's regulations.
Preliminary Determinations by the ITC
The ITC will determine by March 23, 1998, whether there is a
reasonable indication that imports of butter cookies in tins from
Denmark are materially injuring, or threatening material injury, to a
U.S. industry. Negative ITC determinations will result in the
particular investigations being terminated; otherwise, the
investigations will proceed according to statutory and regulatory time
limits.
This notice is published pursuant to sections 702(c)(2) and
732(c)(2) of the Act and Sec. 351.203(c)(1) of the Department's
Regulations.
Dated: February 26, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-5741 Filed 3-4-98; 8:45 am]
BILLING CODE 3510-DS-P
