[Federal Register Volume 63, Number 179 (Wednesday, September 16, 1998)]
[Notices]
[Pages 49549-49551]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-24749]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[C-533-816]
Notice of Initiation of Countervailing Duty Investigation:
Elastic Rubber Tape from India
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: September 16, 1998.
FOR FURTHER INFORMATION CONTACT: Todd Hansen or Javier Barrientos at
(202) 482-1276 and (202) 482-4207, respectively, Import Administration,
U.S. Department of Commerce, Room 1870, 14th Street and Constitution
Avenue, NW., Washington, DC 20230.
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's regulations are to 19 CFR
Part 351 (1998).
The Petition
On August 18, 1998, the Department of Commerce (the Department)
received a petition filed in proper form by or on behalf of Fulflex,
Inc., Elastomer Technologies Group, Inc. (Elastomer), and RM Engineered
Products, Inc. (RM) (collectively referred to hereinafter as ``the
petitioners''). Elastomer and RM are both wholly owned subsidiaries of
M-Tec Corporation. A supplement to the petition was filed on September
1, 1998.
In accordance with section 702(b)(1) of the Act, the petitioners
allege that manufacturers, producers, or exporters of the subject
merchandise in India receive countervailable subsidies within the
meaning of section 701 of the Act, and that such imports are materially
injuring an industry in the United States. The petitioners estimate the
countervailing duty rate for Garware to be 50 percent. This figure is
based on the findings of the EU in its Imposition of Provisional
Countervailing Duty on Imports of Certain Broad Spectrum Antibiotics
Originating in India (OJ L 166/17, Commission Regulation (EC) No. 1204/
98, June 11, 1998) and the Department's determination in Certain Iron-
Metal Castings from India: Preliminary Results of Countervailing Duty
Administrative Review (63 FR 37534, July 13, 1998).
The petitioners state that they have standing to file the petition
because they are interested parties, as defined under sections
771(9)(C) and (D) of the Act, and they have demonstrated that they are
the only producers of ERT in the United States (see ``Determination of
Industry Support for the Petition'' section below).
Scope of the Investigation
For purposes of this investigation, the product covered is elastic
rubber tape. Elastic rubber tape is defined as vulcanized, non-cellular
rubber strips, of either natural or synthetic rubber, 0.006 inches to
0.100 inches (0.15 mm to 2.54 mm) in thickness, and \1/8\ inches to
1\5/8\ inches (3 mm to 42 mm) in width. Such product is generally used
in swimwear and underwear.
The merchandise subject to this investigation is classified in the
Harmonized Tariff Schedule of the United States (``HTSUS'') at
subheading 4008.21.00. 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 scope with the
petitioners to insure that the scope in the petitions accurately
reflects the product for which they are seeking relief. Moreover, as
discussed in the preamble to our regulations (62 FR 27323), we are
setting aside a period for parties to raise issues regarding product
coverage. The Department encourages all parties to submit such comments
by September 29, 1998. 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 us with
ample opportunity to consider all comments and consult with parties
prior to the issuance of our preliminary determinations.
Consultations
Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department
invited representatives of the Government of India (GOI) for
consultations with respect to the petition. On September 1, 1998, the
GOI submitted written comments regarding the programs alleged in the
petition. Consultations were held on September 4, 1998. See memorandum
to the file regarding the consultations with the GOI, dated September
4, 1998 (public document on file in the Central Records Unit of the
Department of Commerce, Room B-099).
Determination of Industry Support for the Petition
Section 702(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 702(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 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. While both the Department and
the ITC must apply the same statutory definition of 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
like product, such differences do not
[[Page 49550]]
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 Therefor 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 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 therefore adopted the domestic like product
definition set forth in the petition.
In this case, the Department has determined that the petition and
supplemental information contained adequate evidence of sufficient
industry support and, therefore, polling is unnecessary. See the
Initiation Checklist prepared for this case, dated September 8, 1998
(public documents on file in the Central Records Unit of the Department
of Commerce, Room B-099). The petitioners established industry support
representing 100 percent of total production of the domestic like
product.
Additionally, no person who would qualify as an interested party
pursuant to sections 771(9)(A)(B)(C)(D)(E) or (F) has expressed
opposition on the record to the petition. Therefore, to the best of the
Department's knowledge, the producers who support this petition account
for 100 percent of the production of the domestic like product produced
by the portion of the industry expressing an opinion regarding the
petition. Accordingly, the Department determines that this petition is
filed on behalf of the domestic industry within the meaning of section
702(b)(1) of the Act.
Injury Test
Because India is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Act, section 701(a)(2) applies to this
investigation. Accordingly, the U.S. International Trade Commission
(ITC) must determine whether imports of the subject merchandise from
India materially injure, or threaten material injury to, a U.S.
industry.
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 subsidized imports of the subject
merchandise from India. The petitioners explain that the industry's
injured condition is evident in the declining trends in net operating
profits and income, net sales volumes and values, profit to sales
ratios, 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. The Department
assessed the allegations and supporting evidence regarding material
injury and causation, and it determined that these allegations are
sufficiently supported by accurate and adequate evidence and meet the
statutory requirements for initiation (see Attachment 2 to the
September 8, 1998, Initiation Checklist entitled ``Analysis of
Allegations and Evidence of Material Injury and Causation'').
Allegation of Critical Circumstances
The petitioners allege that critical circumstances exist with
respect to imports of ERT from India. To support this allegation, the
petitioners have provided evidence in the petition of a trend of
increasing imports recently and the potential for even greater
increases in the near future. The petitioners also have asserted that
the alleged subsidies are inconsistent with the Subsidies Agreement,
based on the fact that both the Department and the European Union have
determined several of the alleged subsidies to be countervailable
export or import substitution subsidies in other countervailing duty
proceedings. In taking into consideration the foregoing, we find that
petitioners have alleged the elements of critical circumstances and
supported it with reasonably available information. We, therefore, will
investigate this matter further.
Initiation of Countervailing Duty Investigation
Section 702(b) of the Act requires the Department to initiate a
countervailing duty proceeding whenever an interested party files a
petition, on behalf of an industry, that (1) alleges the elements
necessary for an imposition of a duty under section 701(a), and (2) is
accompanied by information reasonably available to the petitioners
supporting the allegations.
The Department has examined the petition on elastic rubber tape
(ERT) from India and found that it complies with the requirements of
section 702(b) of the Act. Therefore, in accordance with section 702(b)
of the Act, we are initiating a countervailing duty investigation to
determine whether manufacturers, producers, or exporters of ERT from
India receive subsidies. See the September 8, 1998, Initiation
Checklist regarding the initiation of this investigation. We will make
our preliminary determination by November 12, 1998, unless this
deadline is extended.
We are including in our investigation the following programs
alleged in the petition to have provided subsidies to producers and
exporters of the subject merchandise in India:
1. Passbook/Duty Entitlement Passbook Schemes.
2. Export Promotion Capital Goods Scheme.
3. Export Processing Zones/Export Oriented Units Programs.
4. Income Tax Exemption Scheme.
5. Pre-Shipment Export Financing.
6. Post-Shipment Export Financing.
7. Import Mechanism (Sale of Import Licenses).
8. Exemption of the Interest Tax on Export Credits.
9. Rediscounting of Export Bills Abroad.
10. Programs Operated by the Small Industries Development Bank of
India.
11. Special Imprest Licenses.
12. Market Development Assistance.
13. Special Benefits to Export and Trading Houses and Super Star
Trading Houses.
14. Duty Drawback on Excise Taxes.
15. Pre-Shipment Export Financing in Foreign Currency.
We are not including in our investigation the following program
alleged to be benefitting producers and exporters of the subject
merchandise in India:
Location Grants
The petitioners alleged that Garware may have received grants
during the POI for having located its facilities in the ``Maharashtra
Industrial Zone.'' The petitioners did not provide any additional
information such as the name of a particular program, the government
agency administering the program, the eligibility requirements, or the
specific manner in which benefits are provided.
We are not including this alleged subsidy in our investigation
because the petitioners have not provided sufficient information. While
the petitioners have
[[Page 49551]]
asserted that Garware received government grants due to its location in
an industrial zone, they have provided no factual information regarding
a specific program under which these alleged grants may have been
provided. Furthermore, the petitioners have not provided evidence that
companies located in ``industrial zones'' are eligible for certain
benefits. (We note that we are including in our investigation Export
Processing Zones, Falta Free Trade Zones and Other Free Trade Zones.)
Given the lack of information regarding this allegation, we are not
including it in our investigation.
Distribution of Copies of the Petition
In accordance with section 702(b)(4)(A)(i) of the Act, copies of
the public version of the petition have been provided to the
representatives of the Government of India. We will attempt to provide
copies of the public version of the petition to all the exporters named
in the petition, as provided for under section 351.203(c)(2) of our
regulations.
ITC Notification
Pursuant to section 702(d) of the Act, we have notified the ITC of
this initiation.
Preliminary Determination by the ITC
The ITC will determine by October 2, 1998, 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 ERT from India. A negative ITC determination will result in
the investigation being terminated; otherwise, the investigation will
proceed according to statutory and regulatory time limits.
This notice is published pursuant to sections 702(c) and 777(i) of
the Act.
Dated: September 8, 1998.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-24749 Filed 9-15-98; 8:45 am]
BILLING CODE 3510-DS-P