[Federal Register Volume 61, Number 246 (Friday, December 20, 1996)]
[Notices]
[Pages 67306-67308]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32406]


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DEPARTMENT OF COMMERCE

International Trade Administration
(A-570-850, A-580-827, and A-583-826)


Initiation of Antidumping Duty Investigations: Collated Roofing 
Nails From the People's Republic of China, the Republic of Korea, and 
Taiwan

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: December 20, 1996.

FOR FURTHER INFORMATION CONTACT: Dorothy Tomaszewski at (202) 482-0631 
or Everett Kelly at (202) 482-4194, Import Administration--Room B099, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, DC 20230.

Initiation of Investigations

The Applicable Statute

    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'').

The Petition

    On November 26, 1996, the Department of Commerce (``the 
Department'') received a petition filed in proper form by Paslode 
Division of Illinois Tool Works Inc. (``petitioner''). The Department 
received supplemental information to the petition on December 11, 1996, 
and December 16, 1996.
    In accordance with section 732(b) of the Act, petitioner alleges 
that imports of Collated Roofing Nails (``CR nails'') from the People's 
Republic of China (``PRC''), the Republic of Korea (``Korea''), and 
Taiwan 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 material 
injury to, an industry in the United States.
    The Department finds that petitioner has standing to file the 
petition because it is an interested party as defined in section 
771(9)(C) of the Act.

Scope of Investigations

    The products covered by these investigations are CR nails made of 
steel, having a length of \13/16\ inch to 1-\13/16\ inches (or 20.64 to 
46.04 millimeters), a head diameter of 0.330 inch to 0.415 inch (or 
8.38 to 10.54 millimeters), and a shank diameter of 0.100 inch to 0.125 
inch (or 2.54 to 3.18 millimeters), whether or not galvanized, that are 
collated with two wires.
    CR nails within the scope of these investigations are classifiable 
under the Harmonized Tariff Schedule of the United States (``HTSUS'') 
subheading 7317.00.55.05. Although the HTSUS subheading is provided for 
convenience and customs purposes, our written description of the scope 
of these investigations is dispositive.

Determination of Industry Support for the Petition

    Section 732(b)(1) of the Act requires that petitions be filed on 
behalf of the domestic industry. In this regard, section 732(c)(4)(A) 
of the Act requires the Department to determine, prior to the 
initiation of an investigation, that a minimum percentage of the 
domestic industry supports the antidumping petition. A petition meets 
the minimum requirements 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 statute 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 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. However, while 
both the Department and the ITC must apply the same statutory 
definition of domestic like product, 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 
like product, such

[[Page 67307]]

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 
Fed. Reg. 32376, 32380-81 (July 16, 1991) (``Flat Panel Displays'').
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    Section 771(10) of the Act defines 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 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.
    As noted earlier, the petition is limited to collated roofing 
nails. The Department has no basis on the record to find this 
definition clearly inaccurate. In this regard, we have found no basis 
on which to reject petitioner's representations that there are clear 
dividing lines, in terms of characteristics and uses, between the 
collated roofing nails under investigation on the one hand and, on the 
other hand, other collated nails and bulk roofing nails. (See December 
16, 1996, Memorandum to the File). The Department has, therefore, 
adopted the like product definition set forth in the petition.
    Our review of the production data provided in the petition and 
other production information obtained by the Department indicates that 
the petitioners and supporters of the petition account for more than 50 
percent of the total production of the domestic like product, thus 
meeting the standard of section 732(c)(4)(A) of the Act. The Department 
received no expressions of opposition to the petition from any domestic 
producers or workers. Accordingly, the Department determines that the 
petition is supported by the domestic industry.

Export Price and Normal Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which our decisions to initiate are based. Should 
the need arise to use any of this information in our preliminary or 
final determinations, we will re-examine the information and may revise 
the margin calculations, if appropriate.
PRC
    Petitioner based export price on FOB and CIF price quotations 
during August and September 1996 from PRC CR nails manufacturers for 
the sale of 1'' and 1\1/4\'' CR nails. Absent more specific 
international freight and marine insurance data, CIF prices were 
reduced for insurance and freight based on the percentage difference 
between Customs and CIF values reported for U.S. imports of collated 
nails from PRC to Los Angeles using August 1996 IM-145 Import 
Statistics for collated nails entered under HTSUS subheading 
7317.00.55.05.
    With respect to normal value, petitioner asserts that the PRC is a 
non-market economy (``NME'') within the meaning of section 771(18) of 
the Act. In previous investigations, the Department has determined that 
the PRC is an NME and, in accordance with section 771(18)(c)(I) of the 
Act, the presumption of NME status continues for the initiation of this 
investigation. See, e.g., Final Determination of Sales at Less than 
Fair Value: Bicycles from the PRC, 61 FR 19026 (April 30, 1996). 
Accordingly, the normal value of the product should be based on the 
producer's factors of production, valued in a surrogate market economy 
country in accordance with section 773(c) of the Act.
    In the course of this investigation, all parties will have the 
opportunity to provide relevant information related to the issues of 
the PRC'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 PRC, 59 FR 22585 (May 2, 1994).
    It is the Department's practice in NME cases to calculate NV based 
on the factors of production of the factories that produced CR nails 
sold to the United States during the period of investigation.
    Petitioner based the PRC producers' factors of production as 
defined by section 773(c)(3) of the Act (i.e., raw materials, labor, 
energy, and packing) for CR nails on petitioner's own usage amounts, 
adjusted for known differences in production processes. In accordance 
with section 773(c)(4) of the Act, petitioner valued these factors, 
where possible, on publicly available published Indian data. Where this 
data was unavailable, petitioner used other acceptable sources of 
information.
    Petitioner stated that because (1) the per-capita gross national 
product of India and the PRC are relatively close, and (2) the 
Department considered India and the PRC to be economically comparable 
in past investigations, the two countries may be considered 
economically comparable for purposes of this investigation. Further, 
petitioner stated that India is a producer of comparable merchandise.
    Petitioner based surrogate values of material factors on Indian 
import statistics data and prices published in the Indian chemical 
trade publication, Chemical Weekly. Surrogate labor values were 
calculated from information on the public record of a previous 
antidumping duty investigation, Final Determination of Sales at Less 
Than Fair Value: Heavy Forged Hand Tools, Finished or Un-Finished, With 
or Without Handles from the PRC, 56 FR 241, 245 (January 3, 1991).The 
surrogate value of electricity was based on an average rate for Indian 
industries reported in the Confederation of Indian Industry 
publication, Handbook of Statistics 1995. Petitioner based the 
surrogate value of water on the Asian Development Bank's Water 
Utilities Data Book for the Asian and Pacific Region.
    Petitioner based factory overhead, general expenses, and profit on 
data contained in the ``Reserve Bank of India Bulletin,'' April 1995.
    Based on comparisons of export price to normal value, the 
calculated dumping margins for CR nails from the PRC, after certain 
corrections deemed appropriate by the Department, range from 106.08 to 
118.41 percent ad valorem.
Korea
    Petitioner based export price on CNF price quotations from a CR 
nails manufacturer in Korea for sale of 1-inch and 1\1/4\-inch CR 
nails. Petitioner adjusted the CNF price quotations by subtracting 
estimated freight charges based on a quotation that petitioner obtained 
from an international freight carrier.
    With respect to normal value, petitioner provided information 
showing that the Korean market was not viable. Petitioner also provided 
evidence that Germany was the largest third country market. Therefore, 
petitioner based normal value on CNF price quotations for the sale of 
CR nails in Germany.
    Based on comparisons of export price to normal value, the 
calculated dumping margin, revised by the Department to include an 
additional U.S. price quotation not originally used in the margin 
calculation in the petition, for CR nails from Korea range from 75.17 
to 103.45 percent ad valorem.
Taiwan
    Petitioner based export price on CIF price quotations for June 1996 
from two Taiwan CR nail manufacturers for the sale of 1-inch and 1\1/
4\-inch CR nails to the United States. Absent more specific 
international freight and marine insurance data, petitioner adjusted 
the

[[Page 67308]]

CIF price quotations based on the percentage difference between the 
Customs value and CIF value reported for U.S. imports of collated nails 
from Taiwan to Los Angeles using June 1996 IM-145 Import Statistics for 
collated nails entered under HTSUS subheading 7317.00.55.05.
    With respect to normal value, petitioner provided information 
showing that the Taiwanese market was not viable. Additionally, 
although petitioner obtained a third country price for CR nails, 
petitioner provided evidence that no third country market is viable. 
Therefore, petitioner based normal value on CV.
    Petitioner's calculation of CV included the cost of manufacturing 
(``COM''), selling, general and administrative (``SG&A'') expenses, and 
U.S. packing expenses. The manufacturing costs contained in the 
petition were based on petitioner's own experience and publicly 
available industry data, adjusted for known differences between 
production costs incurred in the United States and production costs 
incurred in Taiwan. For SG&A expenses, petitioner used its own 1995 
audited financial statements because it could not obtain financial 
statements for a Taiwan CR nail producer. Petitioner did not include an 
amount for CV profit.
    Based on the Department's modifications to petitioner's 
methodology, the estimated dumping margins for Taiwan range from 30.52 
to 40.28 percent ad valorem.

Fair Value Comparisons

    Based on the data provided by petitioner, there is reason to 
believe that imports of CR nails from the PRC, Korea, and Taiwan are 
being, or are likely to be, sold at less than fair value.

Initiation of Investigations

    We have examined the petition on CR nails and have found that it 
meets the requirements of section 732 of the Act, including the 
requirements concerning allegations of the material injury or threat of 
material injury to the domestic producers of a domestic like product by 
reason of the complained-of imports, allegedly sold at less than fair 
value. Therefore, we are initiating antidumping duty investigations to 
determine whether imports of CR nails from the PRC, Korea, and Taiwan 
are being, or are likely to be, sold in the United States at less than 
fair value. Unless extended, we will make our preliminary 
determinations by May 5, 1997.

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of each petition has been provided to the 
representatives of the governments of Korea and PRC, as well as to the 
authorities of Taiwan. We will attempt to provide a copy of the public 
version of each petition to each exporter named in the petition (as 
appropriate).

ITC Notification

    We have notified the ITC of our initiations, as required by section 
732(d) of the Act.

Preliminary Determination by the ITC

    The ITC will determine by January 6, 1997, whether there is a 
reasonable indication that imports of CR nails from the PRC, Korea, and 
Taiwan are causing material injury, or threatening to cause material 
injury, to a U.S. industry. A negative ITC determination in any of the 
investigations will result in that investigation being terminated; 
otherwise, the investigations will proceed according to statutory and 
regulatory time limits.

    Dated: December 16, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-32406 Filed 12-19-96; 8:45 am]
BILLING CODE 3510-DS-P