[Federal Register Volume 63, Number 179 (Wednesday, September 16, 1998)]
[Notices]
[Pages 49546-49548]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-24750]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-533-815]


Initiation of Antidumping 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: Craig Matney or Cynthia Thirumalai at 
(202) 482-1778 and (202) 482-4087, respectively, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 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 Fulflex, Inc., Elastomer 
Technologies Group, Inc., and RM Engineered Products, Inc., 
collectively referred to hereinafter as ``the petitioners.'' Elastomer 
and RM are both wholly owned subsidiaries of M-Tec Corporation. The 
petitioners filed supplemental information to the petition on September 
1, 1998.
    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of elastic rubber tape (ERT) from India 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 an industry in the United States.
    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 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 the scope with the 
petitioners to insure the petition accurately reflects the product for 
which they are seeking relief. Moreover, as discussed in the preamble 
to the new 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 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 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 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.

[[Page 49547]]

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 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 class or kind of merchandise 
to be investigated, which normally will be the scope as defined in the 
petition.
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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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    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 this 
definition of the domestic like product to be inaccurate. The 
Department, therefore, has adopted this domestic like product 
definition.
    In this case, the Department has determined that the petition and 
supplemental information contained adequate evidence of sufficient 
industry support; therefore, polling was not necessary. See Initiation 
Checklist, dated September 8, 1998 (public document on file in the 
Central Records Unit of the Department of Commerce, Room B-099). 
Additionally, no person who would qualify as an interested party 
pursuant to section 771(A), (C), (D), (E) or (F) has expressed 
opposition on the record to the petition. To the best of the 
Department's knowledge, the producers who support the petition account 
for 100 percent of the production of the domestic like product. 
Accordingly, the Department determines 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 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 Garware as the only Indian exporter to 
the United States of ERT. Because information obtained by the 
petitioners indicates that most of Garware's U.S. sales are through its 
affiliated importer in the United States, the petitioners have based 
U.S. price on constructed export price (CEP). For Garware's CEP prices, 
the petitioners used prices and offers for sale to unaffiliated 
purchasers in the United States in April and June of 1998. Because the 
terms of Garware's U.S. sales were delivered, the petitioners 
calculated a net U.S. price by subtracting estimated costs for shipment 
from Garware's factory in India to the port of export using publicly 
available information. In addition, the petitioners subtracted ocean 
freight expenses calculated from a Garware shipping document obtained 
by the petitioners. U.S. import duties were estimated by the 
petitioners using the HTSUS schedule and then subtracted from the 
prices. The petitioners also subtracted amounts for U.S. merchandise 
processing fees and U.S. harbor maintenance fees in accordance with 
section 772(c)(2)(A) of the Act. Based upon their own experience, the 
petitioners then subtracted estimated U.S. inland freight costs from 
the port of importation to customers' delivery locations. Finally, the 
petitioners calculated a selling expense rate based on an average of 
the selling costs in the domestic industry and subtracted this amount.
    With respect to normal value (NV), the petitioners stated that they 
believe the volume of Indian home market sales was sufficient to form a 
basis for NV, pursuant to section 773(a)(1)(C)(ii) of the Act. The 
petitioners obtained gross unit prices and offers for sale during the 
period contemporaneous with the U.S. sales and offers for sale for 
products which are either identical or similar to those sold to the 
United States. Since the home market prices and offers for sale were 
ex-factory, the petitioners made no adjustment to these prices. These 
home market prices were then converted to U.S. dollar prices using the 
official exchange rate in effect for the month of the comparison U.S. 
sale.
    While the petitioners believe that Garware's home market is viable, 
they have also made a dumping analysis based on constructed value (CV) 
in order to show dumping is occurring under either scenario. The 
petitioners' calculations are for the Garware ERT compound which was 
sold/offered for sale in the United States. To calculate CV, the 
petitioners relied on a chemical analysis of Garware's product to 
determine its composition. To value the components of Garware's 
product, the petitioners used Indian data, where possible. Where Indian 
data was not obtainable, the petitioners used their own costs, stating 
that the prices they pay are equivalent to world-market prices. We 
adjusted the petitioners' calculation to reflect that products of 
various dimensions but of identical chemical composition have the same 
material usage per unit of weight. To value overhead and SG&A, the 
petitioners used percentages from the Notice of Final Determination of 
Sales at Less Than Fair Value: Persulfates from the People's Republic 
of China, 62 FR 27222, 27229 (May 19, 1997) (Persulfates). In 
Persulfates the Department derived the overhead and SG&A percentages 
from the financial statement of an Indian producer of hydrogen 
peroxide. Because the information in the petition does not indicate 
that the production of hydrogen peroxide closely resembles that of ERT, 
we have not used the overhead and SG&A rates from Persulfates. Instead, 
we have relied on publicly available information from the Reserve Bank 
of India on the chemical industry, in general. To derive a profit rate, 
the petitioners compared Garware's home market prices to the cost of 
production of the product sold.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of ERT from India are being, or are likely to be, 
sold at less than fair value. Based on a comparison of CEP to home 
market prices, the petitioners calculated dumping margins range from 
49.43 to 66.51 percent. The estimated dumping margins based on a 
comparison between the CV of Garware's product and CEP range from 28.93 
to 43.66 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 
material injury, by reason of the imports of the subject merchandise 
sold at less than NV. The petitioners explained 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 determined that these allegations are 
supported by accurate

[[Page 49548]]

and adequate evidence and meet the statutory requirements for 
initiation. See Initiation Checklist, dated September 8, 1998 (public 
document on file in the Central Records Unit of the Department of 
Commerce, Room B-099).

Allegation of Critical Circumstances

    The petitioners have alleged that critical circumstances exist. To 
support their 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 
provided evidence suggesting the person by whom, or for whose account, 
ERT is imported knew or should have known that the merchandise was 
being sold at less than fair value and that there was likely to be 
material injury as a result. In taking into consideration the 
foregoing, we find that the petitioners have alleged the elements of 
critical circumstances and supported it with reasonably available 
information. We, therefore, will investigate this matter further.

Initiation of Antidumping Investigation

    Based upon 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 ERT from India 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 January 26, 
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 India. We will attempt to provide a copy of the 
public version of the petition to the exporter named in the petition.

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 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, this investigation will 
proceed according to statutory and regulatory time limits.
    This notice is published pursuant to sections 732(d) and 777(i) of 
the Act.

    Dated: September 8, 1998.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-24750 Filed 9-15-98; 8:45 am]
BILLING CODE 3510-DS-P