[Federal Register Volume 64, Number 120 (Wednesday, June 23, 1999)]
[Notices]
[Pages 33463-33465]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16000]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-853]
Initiation of Antidumping Duty Investigation: Bulk Aspirin From
the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: June 23, 1999.
FOR FURTHER INFORMATION CONTACT: Craig W. Matney or Alysia Wilson,
Office 1, AD/CVD Enforcement, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1778 or (202) 482-0108, 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 May 28, 1999, the Department received a petition filed in proper
form by Rhodia, Inc., referred to hereinafter as ``the petitioner.''
The petitioner filed supplemental information to the petition on June
14, 1999.
In accordance with section 732(b) of the Act, the petitioner
alleges that imports of bulk aspirin 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 or threaten to injure 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 bulk
acetylsalicylic acid, commonly referred to as bulk aspirin, whether or
not in pharmaceutical or compound form, not put up in dosage form
(tablet, capsule, powders or similar form for direct human
consumption). Bulk aspirin may be imported in two forms, as pure ortho-
acetylsalicylic acid or as mixed ortho-acetylsalicylic acid. Pure
ortho-acetylsalicylic acid can be either in crystal form or granulated
into a fine powder (pharmaceutical form). This product has the chemical
formula C9H8O4. It is defined by the
official monograph of the United States Pharmacopoeia (USP) 23. It is
classified under the Harmonized Tariff Schedule of the United States
(HTSUS) subheading 2918.22.1000.
Mixed ortho-acetylsalicylic acid consists of ortho-acetylsalicylic
acid combined with other inactive substances such as starch, lactose,
cellulose, or coloring materials and/or other active substances. The
presence of other active substances must be in concentrations less than
that specified for particular nonprescription drug combinations of
aspirin and active substances as published in the Handbook of
Nonprescription Drugs, eighth edition, American Pharmaceutical
Association. This product is classified under HTSUS subheading
3003.90.0000. 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 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
[[Page 33464]]
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 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.
To the best of the Department's knowledge, the petitioner is the
sole U.S. producer of the domestic like product. Additionally, no
person who would qualify as an interested party pursuant to sections
771(9) (C), (D), (E) or (F) of the Act has expressed opposition on the
record to the petition. Thus, the petitioner accounts for more than 50
percent of the production of the domestic like product. Accordingly, in
accordance with section 732(c)(4) of the Act, we determine that the
petition has been filed on behalf of the domestic industry. See
Initiation Checklist dated May 17, 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 four potential PRC exporters and
producers of bulk aspirin. The petitioner based export price (EP) on
(1) an offer for sale of the subject merchandise to a U.S. purchaser by
a PRC exporter during the first quarter of 1999; (2) the market prices
of the subject merchandise paid by a U.S. purchaser; (3) U.S. import
statistics for 1998; (4) U.S. import statistics for the first quarter
of 1999; and (5) export statistics from the PRC. From these starting
prices, the petitioner deducted international freight and marine
insurance, when the terms of the sale were delivered, and import
duties, where appropriate. The petitioner based international freight
and marine insurance fees on the difference between the FAS and the CIF
values stated in the U.S. Bureau of the Census import statistics for
1998 imports of subject merchandise from China. Additionally, the
petitioner deducted U.S. import duties of 8.7 percent from the dutiable
value to obtain the net export price.
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 processes that the petitioner uses in its plant which is
most comparable in level of technology to production processes utilized
by several of the major PRC producers of bulk aspirin. The petitioner
presented two alternative methods for calculating NV: The first assumes
that the primary material input is purchased, and the second assumes
that this input is produced in-house.
Materials, utilities, and recovered by-products were valued based
on Indian prices obtained from public information contained in an
affidavit supplied by the petitioner on Indian domestic market prices,
international publications containing the prices applicable to India,
Indian import statistics, and U.S. export statistics. 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 petitioner
reduced the total cost of production (COP) by the value of by-products
recovered. For factory overhead; selling, general and administrative
expenses; and profit, the petitioner applied rates derived from
information gathered from the financial statements of a publicly-traded
Indian producer of aspirin. The petitioner added one percent of COP to
account for packing factor costs, consistent with Department practice
in certain previous cases. (For further information on the EP and NV
calculation methodology, see Initiation Checklist and Calculation
Adjustments Memorandum, both dated June 17, 1999.)
Fair Value Comparisons
Based on the data provided by the petitioner, there is reason to
believe that imports of bulk aspirin 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 8.28
percent to 144.02 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 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.
[[Page 33465]]
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 bulk aspirin 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
November 4, 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 July 12, 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 bulk aspirin 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: June 17, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-16000 Filed 6-22-99; 8:45 am]
BILLING CODE 3510-DS-P
