[Federal Register Volume 64, Number 144 (Wednesday, July 28, 1999)]
[Notices]
[Pages 40831-40833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19299]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-856]
Initiation of Antidumping Duty Investigation: Synthetic Indigo
From the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce
EFFECTIVE DATE: July 28, 1999.
FOR FURTHER INFORMATION CONTACT: Dinah McDougall or David J.
Goldberger, Import Administration, International Trade Administration,
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, DC 20230; telephone: (202) 482-3773 or (202) 482-4136,
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
[[Page 40832]]
(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 June 30, 1999, the Department received a petition filed in
proper form by Buffalo Color Corporation (``BCC'') and the United Steel
Workers of America, AFL-CIO/CLC, which represents BCC's production
workers, collectively referred to hereinafter as ``the petitioners.''
In accordance with section 732(b) of the Act, the petitioners allege
that imports of indigo 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 threatening to injure an industry in
the United States. The petitioners filed supplemental information to
the petition on July 9, 1999 and July 13, 1999.
The Department finds that the petitioners filed this petition on
behalf of the domestic industry because they are interested parties as
defined in section 771(9)(C) of the Act and they represent, at a
minimum, the required proportion of the United States industry (see
Determination of Industry Support for the Petition section below).
Scope of Investigation
The products subject to this investigation are the deep blue
synthetic vat dye known as synthetic indigo and those of its
derivatives designated commercially as ``Vat Blue 1.'' Included are Vat
Blue 1 (synthetic indigo), Color Index No. 73000, and its derivatives,
pre-reduced indigo or indigo white ( Color Index No. 73001) and
solubilized indigo (Color Index No. 73002). The subject merchandise may
be sold in any form (e.g., powder, granular, paste, liquid, or
solution) and in any strength. Synthetic indigo and its derivatives
subject to this investigation are currently classifiable under
subheadings 3204.15.10.00, 3204.15.40.00 or 3204.15.80.00 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 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 for 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 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
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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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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 merchandise to be investigated, which
normally will be the scope as defined in the petition. Moreover, the
petitioners do not offer a definition of domestic like product distinct
from the scope of investigation.
To the best of the Department's knowledge, the petitioner is the
sole U.S. producer of the domestic like product. See memorandum to file
dated July 13, 1999, ``Industry Support and Petitioner Buffalo Color
Corporation's Sole Producer Claim''. 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 to the petitioner on the
record. Thus, the petitioner accounts for more than 50 percent of the
production of the domestic like product. Therefore, in accordance with
section 732(c)(4) of the Act, 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 July 20, 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 petitioners identified eleven potential PRC exporters and
exporter/producers of indigo. The petitioners based export price on
offers for sale of the subject merchandise to U.S. purchasers by one of
the PRC exporters in November 1998 and May 1999. From these starting
prices, the petitioners deducted international freight, marine
insurance, and foreign brokerage and handling charges. The petitioners
based international freight on an actual ocean freight invoice from a
market economy shipping company for a shipment of indigo from the PRC.
Marine insurance fees were based on a quote from a market economy
supplier. The foreign brokerage and handling charges, which were based
on the Department's ``Index of Factor Values for Use in Antidumping
Duty Investigations
[[Page 40833]]
Involving Products From the PRC'' (``Index of Factor Values''), were
adjusted for inflation using the Wholesale Price Index (WPI) published
in the International Monetary Fund's International Financial
Statistics.
Because the PRC is considered a non-market economy (NME) country
under section 771(18) of the Act, the petitioners based normal value
(NV) on the factors of production valued in a surrogate country, in
accordance with section 773(c)(3) of the Act. For purposes of the
petition, the petitioners selected India as the most appropriate
surrogate market economy. The petitioners calculated NV using publicly
available Indian prices to value all unit costs associated with the
factors of production. The petitioners established estimates for per-
unit consumption based on BCC's production experience adjusted for
differences in the PRC production process according to information
reasonably available to the petitioners.
Materials were valued based on Indian prices obtained from publicly
available information and published price lists, principally chemical
prices in the Indian publications Chemical Weekly and Monthly
Statistics of the Foreign Trade of India, and adjusted using the WPI
published in the International Financial Statistics, where appropriate.
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, and adjusted
using the WPI published in the International Financial Statistics. The
fuel oil and natural gas values were based on the Department's Index of
Factor Values, and adjusted using the WPI published in the
International Financial Statistics. To determine factory overhead,
selling, general and administrative expenses, and profit, the
petitioners relied on data from an Indian producer of hydrogen
peroxide, which experiences similarly high fixed costs relative to
direct manufacturing costs, as those incurred by producers of synthetic
indigo. The valuation of packing factors was based on the Department's
Index of Factor Values and international publications containing the
prices applicable to India, and adjusted using the WPI published in the
International Financial Statistics, where appropriate.
Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to
believe that imports of indigo 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 petitioners' calculated dumping margins ranging from 124.69 percent
to 129.60 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
further 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 statistics, lost sales, trade and financial data, 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.
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 indigo 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 December 7,
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 August 16, 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 indigo 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: July 20, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-19299 Filed 7-27-99; 8:45 am]
BILLING CODE 3510-DS-P
