[Federal Register: December 17, 2002 (Volume 67, Number 242)]
[Notices]
[Page 77223-77225]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17de02-28]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-882]
Notice of Initiation of Antidumping Duty Investigation: Refined
Brown Aluminum Oxide (Otherwise known as Refined Brown Artificial
Corundum or Brown Fused Alumina) from the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Initiation of Antidumping Duty Investigation
-----------------------------------------------------------------------
EFFECTIVE DATE: December 17, 2002.
FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Jim Mathews,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone (202) 482-4136 or (202) 482-2778,
respectively.
SUPPLEMENTARY INFORMATION:
Initiation Of Investigation
The Petition
On November 20, 2002, the Department received a petition filed in
proper form by Washington Mills Company, Inc. On November 27, 2002, the
petition was amended to include two additional petitioners, C-E
Minerals and Treibacher Schleifmittel Corporation (collectively, the
petitioners). The Department received information supplementing the
petition throughout the initiation period.
In accordance with section 732(b)(1) of the Tariff Act of 1930, as
amended (the Act), the petitioners allege that imports of refined brown
aluminum oxide from the People's Republic of China (PRC) are, 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 petitioners filed the petition on
behalf of the domestic industry because they are interested parties as
defined in section 771(9)(C) of the Act and they have demonstrated
sufficient industry support with respect to the antidumping
investigation that they are requesting the Department to initiate. See
infra, ``Determination of Industry Support for the Petition.''
Scope of Investigation
The merchandise covered by this investigation is ground, pulverized
or refined artificial corundum, also known as brown aluminum oxide or
brown fused alumina, in grit size of 3/8 inch or less. Excluded from
the scope of the investigation is crude artificial corundum in which
particles with a diameter greater than 3/8 inch constitute at least 50
percent of the total weight of the entire batch. The scope includes
brown artificial corundum in which particles with a diameter greater
than 3/8 inch constitute less than 50 percent of the total weight of
the batch. The merchandise under investigation is currently
classifiable under subheading 2818.10.20.00 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
petitioners to ensure that it accurately reflects the product for which
the domestic industry is seeking relief. Moreover, 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.
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 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 732(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 a
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
[[Page 77224]]
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 a 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
like product, such differences do not render the decision of either
agency contrary to the law.\1\
---------------------------------------------------------------------------
\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 from Japan: Final Determination;
Rescission of Investigation and Partial Dismissal of Petition, 56 FR
32376, 32380-81 (July 16, 1991).
---------------------------------------------------------------------------
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.
We reviewed the description of the domestic like product presented
in the petition. At this time, we have no basis on the record to find
the petition's definition of the domestic like product to be
inaccurate. Therefore, we have adopted the domestic like product set
forth in the petition, which is defined in the ``Scope of
Investigation'' section above.
Finally, the Department has determined that, pursuant to section
732(c)(4)(A) of the Act, the petition contains adequate evidence of
industry support and, therefore, polling is unnecessary. See the Import
Administration Antidumping Investigation Initiation Checklist, Industry
Support section, December 10, 2002 (Initiation Checklist), on file in
the Central Records Unit, Room B-099 of the main Department of Commerce
building. The Department has determined 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 732(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
732(c)(4)(A)(ii) are also met. Accordingly, we determine that this
petition is filed on behalf of the domestic industry within the meaning
of section 732(b)(1) of the Act.
Export Price and Normal Value
The following are descriptions of the allegation of sales at less
than fair value upon which the Department based its decision to
initiate this investigation. The sources of data for the deductions and
adjustments relating to the U.S. price and the factors of production
are discussed in greater detail in the Initiation Checklist. Should the
need arise to use any of this information as facts available under
section 776 of the Act in our preliminary or final determination, we
may re-examine the information and revise the margin calculation, if
appropriate.
Regarding the information involving non-market economies (NME), the
Department presumes, based on the extent of central government control
in an NME, that a single dumping margin, should there be one, is
appropriate for all NME exporters in the given country. In the course
of the investigation, all parties will have the opportunity to provide
relevant information related to the issues of a country's NME status
and the granting of separate rates to individual exporters. See, e.g.,
Final Determination of Sales at Less Than Fair Value: Silicon Carbide
from the People's Republic of China, 59 FR 22585 (May 2, 1994).
Export Price
The petitioners based export price (EP) on the FOB PRC price of the
subject merchandise as invoiced to one of the petitioners. No
adjustments were made to this FOB price.
Normal Value
The petitioners allege that the PRC is an NME country, and that in
all previous investigations the Department has determined that the PRC
is an NME. See, e.g., Notice of Final Determination in the Less Than
Fair Value Investigation of Steel Wire Rope From the People's Republic
of China, 66 FR 12759, 12761 (Feb. 28, 2001). In accordance with
section 771(18)(c) of the Act, any determination that a foreign country
has at one time been considered an NME shall remain in effect until
revoked. Therefore, the PRC will continue to be treated as an NME
unless and until its NME status is revoked. Pursuant to section
771(18)(C)(i) of the Act, because the PRC's status as a NME remains in
effect, the petitioners determined the dumping margin using an NME
analysis.
The petitioners assert that India is the most appropriate surrogate
country for the PRC, claiming that India is: (1) a market economy; (2)
a significant producer of comparable merchandise; and (3) at a level of
economic development comparable to that of the PRC in terms of per-
capita gross national income. Based on the information provided by the
petitioners, we believe that the petitioners' use of India as a
surrogate country is appropriate for purposes of initiation of this
investigation.
The petitioners valued the factors of production using the
quantities of inputs to produce refined brown aluminum oxide as
reported by one of the petitioners because the petitioners stated that
current reliable information about PRC factor quantities was not
reasonably available. The factors of production and usage amounts were
derived from the petitioners' average actual production experience for
various sizes of refined brown aluminum oxide during the period April
through September 2002.
The surrogate values for bauxite and coke were based on the 2000-
2001 annual report of Carborundum Universal Limited (CUMI), an Indian
producer of refined aluminum oxide. The surrogate values for borings
and electrodes were based on the values reported in the Monthly
Statistics of the Foreign Trade of India. Labor was valued using the
regression-based wage rate for the PRC provided by Import
Administration's website and in accordance with 19 CFR 351.408(c)(3).
The petitioners valued electricity using the 2000 price for India
quoted in Energy Prices & Taxes, Quarterly Statistics, published by the
International Energy Agency of the OECD. The petitioners made an
adjustment to the sum of these values to account for a small amount of
ferrosilicon produced and sold as a by-product.
To determine factory overhead, SG&A, and financial expenses, the
petitioners relied on ratios derived from the financial statements of
CUMI. The petitioners valued the by-product, ferrosilicon, by using
their own sales value. Based on the information provided by the
petitioners, we believe that the surrogate values represent information
reasonably available to the
[[Page 77225]]
petitioners and are acceptable for purposes of initiation of this
investigation.
Based upon a comparison of EP to normal value (NV), the petitioners
estimate a margin of 131.38 percent.
Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to
believe that imports of refined brown aluminum oxide from the PRC are
being, or are likely to be, sold at less than fair value.
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 imports of the subject merchandise
sold at less than NV.
The petitioners contend that the industry's injured condition is
evident in the declining trends in net operating profits, net sales
volumes, production employment, and capacity utilization. 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 Initiation
Checklist.
Initiation of Antidumping Investigation
Based upon our examination of the petition on refined brown
aluminum oxide, we have found that it meets the requirements of section
732 of the Act. Therefore, we are initiating an antidumping duty
investigation to determine whether imports of refined brown aluminum
oxide 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
pursuant to section 733(b)(1)(A) of the Act, we will make our
preliminary determination no later than 140 days after the date of this
initiation.
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.
ITC 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 no later than January 6, 2003, whether there
is a reasonable indication that imports of refined brown aluminum oxide
from the PRC 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: December 10, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-31628 Filed 12-16-02; 8:45 am]