[Federal Register Volume 64, Number 46 (Wednesday, March 10, 1999)]
[Notices]
[Pages 11834-11836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5943]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-852]
Initiation of Antidumping Duty Investigation: Creatine From the
People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: March 10, 1999.
FOR FURTHER INFORMATION CONTACT: Marian Wells, Blanche Ziv or Rosa
Jeong, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, DC 20230; telephone: (202) 482-6309, (202) 482-4207, or
(202) 482-3853, respectively.
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 of Commerce's (the
Department's) regulations are to 19 CFR Part 351 (1998).
The Petition
On February 12, 1999, the Department received a petition filed in
proper form by Pfanstiehl Laboratories, Inc., referred to hereinafter
as ``the petitioner.'' The petitioner filed supplemental information to
the petition on March 1, 1999.
In accordance with section 732(b) of the Act, the petitioner
alleges that imports of creatine from the People's Republic of China
(PRC) 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 petitioner filed this 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 represents, at a
minimum, the required proportion of the United States industry (see
Determination of Industry Support for the Petition section below).
Scope of Investigation
For purposes of this investigation, the product covered is commonly
referred to as creatine monohydrate or creatine. The chemical name for
creatine covered under this investigation is N-(aminoiminomethyl)-N-
methylglycine monohydrate. The Chemical Abstracts Service (CAS)
registry numbers for this product are 57-00-1 and 6020-87-7. Pure
creatine is a white, tasteless, odorless powder, that is a naturally
occurring metabolite found in muscle tissue. The merchandise subject to
this investigation is classifiable under subheading 2925.20.90 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
petitioner to ensure the petition accurately reflects the product for
which the domestic industry is seeking relief. Moreover, as discussed
in the preamble to the Department's regulations (62 FR 27296, 27323),
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 days of publication of this notice. 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
[[Page 11835]]
domestic like product. Thus, to determine whether the petition has the
requisite industry support, the Act 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. 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 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.
On February 19, 1999, the ITC presented us with information
indicating that there are three additional producers of the domestic
like product that were not included in the petition. Subsequently, our
research also revealed one additional producer of the domestic like
product not included in the petition. To determine whether the
petitioner met the statutory requirement cited above, we contacted all
companies identified by the ITC and the Department as well as the two
companies included in the petition. Based on production data supplied
by the petitioner and collected by the Department and now on the
record, we determine that the petition has been filed on behalf of the
domestic industry within the meaning of section 732(b)(1) of the Act.
See Initiation Checklist dated March 4, 1999 (public version on file
in the Central Records Unit of the Department of Commerce, Room B-099)
(``Initiation Checklist'').
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 petitioner identified five potential PRC exporters and
producers of creatine. The petitioner based export price on offers for
sale of the subject merchandise to U.S. purchasers by PRC exporters in
November 1998 and January 1999. From these starting prices, the
petitioner deducted international freight, marine insurance, and
foreign brokerage and handling. The petitioner based international
freight and marine insurance fees on current quotations from a U.S.
freight forwarding company. In order to calculate foreign brokerage and
handling, the petitioner used the value of Indian brokerage and
handling charges, claiming that the petitioner does not have
information on the costs associated with brokerage and handling
incurred in the PRC prior to export to the United States. The foreign
brokerage and handling charges, which were based on the Department's
``Index of Factor Values for Use in Antidumping Duty Investigations
Involving Products From the PRC,'' dated June 1996 (``Index of Factor
Values''), were adjusted for inflation using the Indian Wholesale Price
Index (WPI).
Because the PRC is considered a nonmarket economy (NME) country
under section 771(18) of the Act, the petitioner based normal value
(NV) on the factors of production valued in a surrogate country, in
accordance with section 773(c)(3) of the Act. The petitioner selected
India as the most appropriate surrogate market economy. For the factors
of production, the petitioner used its own factor inputs and
consumption data for materials, labor and energy, based on the
production process that the petitioner employed in 1993 and 1994. The
petitioner did not include an amount for representative capital costs,
including depreciation, as provided in subsection 773(c)(3)(D) of the
Act. Thus, petitioner potentially understated costs, thereby providing
a conservative calculation of the alleged dumping. According to
information presented by the petitioner, the operation of the PRC
producers of the subject merchandise has not reached the level of
technology and efficiency represented by the petitioner's present
manufacturing process. As such, the petitioner alleged that its
production process of 1993 and 1994 most closely approximates that
currently being utilized by the PRC producers of the subject
merchandise. Where the 1993 and 1994 consumption data were unavailable
(i.e., electricity and water), the petitioner used its current data.
Materials were valued based on Indian prices obtained from the
petitioner's market research of publicly available information and
published price lists. Labor was valued using the regression-based wage
rate for the PRC provided by the Department, in accordance with 19 CFR
351.408(c)(3). The values for water and electricity were obtained from
international publications containing the prices applicable to India.
The natural gas value was based on the Department's Index of Factor
Values. The petitioner also valued the cost of disposing the waste
generated in the production process using its own cost information. The
petitioner used its own cost of waste disposal as facts available
because it has no direct knowledge of the actual means of disposing of
waste by the PRC producers. For factory overhead, selling, general and
administrative expenses, and profit, the petitioner applied rates
derived from information gathered from the Reserve Bank of India
Bulletin. Packing factors were based on the Department's Index of
Factor Values.
Fair Value Comparisons
Based on the data provided by the petitioner, there is reason to
believe that imports of creatine from the PRC are being, or are likely
to be, sold at less than fair value. Based on a comparison of EP to NV,
the petitioner's calculated dumping margins range from 120.9 percent to
153.7 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 allegations of injury and causation are
supported by relevant evidence including U.S. Customs import data, lost
sales, and pricing information. The
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Department assessed the allegations and supporting evidence regarding
material injury and causation and determined that these allegations are
supported by accurate and adequate evidence and meet the statutory
requirements for initiation. See Initiation Checklist.
Allegation of Critical Circumstances
The petitioner has alleged that critical circumstances exist and
has asked the Department to make an expedited finding. To support its
allegation, the petitioner has provided evidence in the petition in the
form of PIERS data showing, among other things, a trend of increased
imports of the subject merchandise from the third to the fourth quarter
of 1998. Specifically, petitioner contends that creatine imports from
the PRC surged more than 150 percent from the third to the fourth
quarter. The petitioner also provided evidence suggesting the person by
whom, or for whose account, the merchandise 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. Petitioner
argues that its January 25, 1999 press release regarding alleged
dumping of creatine in the United States provides the basis for this
knowledge, and that the Department has accepted similar evidence of
knowledge in other cases. See Preliminary Determination of Critical
Circumstances: Certain Flat-Rolled Carbon Quality Steel Products from
Japan and the Russian Federation, 63 FR 65750, 65751 (November 30,
1998). We find that the petitioner has alleged the elements of critical
circumstances and supported them with reasonably available information.
For these reasons, we will investigate this matter further and will
make a preliminary determination based on available information at the
appropriate time in accordance with 19 CFR 351.206. See Initiation
Checklist.
Initiation of Antidumping Investigation
Based on 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 creatine 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, we will make our preliminary determination by
July 22, 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 the PRC.
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 March 29, 1999, 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 creatine from the PRC. 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 in accordance with section 777(i) of the
Act.
Dated: March 4, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-5943 Filed 3-9-99; 8:45 am]
BILLING CODE 3510-DS-P