[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