[Federal Register Volume 64, Number 54 (Monday, March 22, 1999)]
[Notices]
[Pages 13768-13771]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6934]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-588-848, A-580-838]
Initiation of Antidumping Duty Investigations: Certain Aperture
Masks From Japan and South Korea
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: March 22, 1999.
FOR FURTHER INFORMATION CONTACT: Mark Ross, at (202) 482-4794, or
Thomas Schauer, at (202) 482-4852; Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230.
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, as amended
(``the Act'') by the Uruguay Round Agreements Act (``URAA''). In
addition, unless otherwise indicated, all citations to Department of
Commerce (``Department'') regulations refer to the regulations codified
at 19 CFR Part 351 (1998).
The Petitions
On February 24, 1999, the Department received petitions filed in
proper form by BMC Industries, Inc. (``BMC,'' referred to hereafter as
``the petitioner''). The petitioner filed supplemental information to
the petitions on March 8, 12, and 16, 1999.
The petitioner alleges that imports of certain aperture masks from
Japan and South Korea 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, a U.S. industry.
The Department finds that the petitioner has standing to file the
petitions because it is an interested party as defined in section
771(9)(C) of the Act and it has demonstrated sufficient industry
support with respect to the antidumping investigations it is requesting
the Department to initiate. See ``Determination of Industry Support for
the Petitions'' below.
Scope of Investigations
For purposes of these investigations, the products covered consist
of all aperture masks (also known as ``shadow
[[Page 13769]]
masks'') made from aluminum-killed, open-coil annealed steel
(decarburized) (known generally as ``AK steel'') for color picture
tubes (``CPTs'') used in television sets. AK steel includes the
following types of steel: low carbon, AF (annealing-free) steel, AK
type A steel (commonly referred to as AKM steel), AK type B steel, and
general AK steel. The aperture masks covered by the scope generally
have a vertical pitch (distance between the centers of two apertures)
of greater than .28mm. Specifically excluded from the scope are the
following products: (1) aperture masks made from FeNi 36 alloy (whether
sold under the brand names Invar, Inovar or LLTE); (2) aperture masks
that have a vertical pitch of less than .28 mm that are generally used
for color display tubes (``CDTs'') used in computer monitors; and (3)
grille masks (a grille mask replaces the slots in an aperture mask with
an array of finely tensioned vertical wires).
The merchandise subject to these investigations is classifiable
under 8540.91.50 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 is
dispositive.
During our review of the petitions, we discussed the scope with the
petitioner to ensure that the scope accurately reflects the merchandise
for which the domestic industry is seeking relief. Moreover, as we
discussed in the preamble to the Department's regulations (62 FR at
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 April 5, 1999. Comments should be addressed to
Import Administration's Central Records Unit at Room 1870, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 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 the
preliminary determinations.
Determination of Industry Support for the Petitions
Section 732(c)(4)(A) of the Act requires that the Department
determine, prior to the initiation of an investigation, that a minimum
percentage of the domestic industry supports an antidumping petition. A
petition meets this minimum 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. Under section 732(c)(4)(D) of the Act, if the
petitioner(s) account for more than 50 percent of the total production
of the domestic like product, the Department is not required to poll
the industry to determine the extent of industry support.
To determine whether a 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. 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 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 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.
The domestic like product referred to in the petitions, and as
clarified by the March 8 and 12, 1999, supplements to the petitions, is
the single product defined in the ``Scope of Investigation'' section,
above. No party has commented on the petitions'' definition of domestic
like product, and there is nothing on the record to indicate that this
definition is inaccurate. The Department, therefore, has adopted this
definition of the domestic like product.
With respect to the above-cited industry-support requirements, the
Department has determined that the petitions and supplemental
information contained adequate evidence of sufficient industry support.
See Initiation Checklist, dated March 16, 1999 (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 sections 771(A), (C), (D), (E), or (F) of the Act has
expressed on the record opposition to the petitions. Information
currently on the record indicates that the producer who supports the
petitions accounts for 100 percent of the production of the domestic
like product. Accordingly, the Department determines that these
petitions are filed on behalf of the domestic industry within the
meaning of section 732(b)(1) of the Act.
Export Price and Normal Value
The petitioner identified three Japanese producers and one South
Korean producer in its less-than-fair-value allegations. The Japanese
producers are Dai Nippon Printing Co., Ltd. (``DNP''), Dainippon Screen
Manufacturing Company, Ltd. (``DNS''), and Toppan Printing Co., Ltd.
(``Toppan''). The South Korean producer is LG Micron Ltd. (``LGM'').
The petitioner determined export prices for each of these producers
based on price quotes obtained by the petitioner's sales personnel in
the ordinary course of business. These price quotes are for various
sizes of the aperture masks covered by the scope of the petitions. The
petitioner provided trip reports and an affidavit from a BMC sales
representative to support the validity of the price quotes. All U.S.
price quotes were denominated in U.S. dollars and, where appropriate,
the petitioner made adjustments for movement expenses. Our review of
the petitioner's calculation of export prices did not indicate the need
to make changes to those prices.
With respect to normal value for Japan, the petitioner could not
find data regarding Japanese home market prices. Moreover, the
petitioner alleges that the volume of Japanese domestic sales of in-
scope merchandise is insufficient to form a basis for normal value. In
support of its claims that pricing information is unavailable and that
the Japanese domestic market is not viable, the petitioner provided an
affidavit from a responsible BMC sales representative. The affidavit
documents the employee's efforts to uncover pricing information and
indicates that most of the aperture
[[Page 13770]]
masks sold in Japan are types specifically excluded from the scope of
the petitions (e.g., aperture masks made from Invar). Lacking pricing
information for sales of the foreign like product in the Japanese
market, the petitioner turned to third-country sales as the basis for
normal value in accordance with section 773(a)(1)(C) of the Act.
However, as described in more detail below, the petitioner provided
information in the petitions demonstrating reasonable grounds to
believe or suspect that sales of certain aperture masks from Japan to
third-country markets were made at prices below the cost of production
(i.e., the sum of the cost of materials and fabrication (i.e., COM),
selling, general and administrative (``SG&A'') expenses, and packing),
within the meaning of section 773(b) of the Act. The petitioner
therefore concluded that sales from Japan to third countries cannot
serve as the basis for normal value. Furthermore, the petitioner
requested that the Department conduct a countrywide investigation of
sales below cost for third-country market sales from Japan.
With respect to normal value for South Korea, the petitioner stated
that it believes that the volume of South Korean home market sales is
sufficient to form a basis for normal value. The petitioner also
provided information in the petitions demonstrating reasonable grounds
to believe or suspect that sales of certain aperture masks in South
Korea were made at prices below the cost of production, within the
meaning of section 773(b) of the Act. The petitioner therefore
concluded that sales in the South Korean home market cannot serve as
the basis for normal value. Furthermore, the petitioner requested that
the Department conduct a countrywide investigation of sales below cost
for home market sales in South Korea.
To support its allegations that prices from Japan to third-country
markets and prices in the South Korean home market are below the cost
of production, the petitioner compared price quotes for each of the
identified producers to each company's cost of production. The
petitioner calculated the COM and packing components of the cost of
production based on its own production experience with adjustments for
known differences in costs incurred in the United States and costs
incurred in Japan and South Korea. It derived company-specific SG&A
expenses for the Japanese producers using each company's financial
statements. For LGM, the South Korean producer of certain aperture
masks, the petitioner said it was not able to obtain a financial
statement for the calculation of SG&A expenses. However, since the
petitioner could obtain the financial statements of LGM's parent
company, LG Electronics, it calculated SG&A based on the financial
statements of LG Electronics. We reviewed the cost-of-production
calculations and accepted the underlying cost data contained in the
petitions, as revised and/or supplemented by the March 8, 12, and 16,
1999, submissions.
We compared the cost-of-production data supplied in the petitions
to the corresponding Japanese producers' third-country prices and the
South Korean producer's home market prices. We found that the prices in
every instance were below the cost of production. Thus, for both Japan
and South Korea, these findings constitute ``reasonable grounds to
believe or suspect'' that sales of the foreign like product were made
below their respective cost of production within the meaning of section
773(b)(2)(A)(i) of the Act. See ``Initiation of Cost Investigation,''
below.
Since the petitioner found that the third-country prices of the
Japanese producers and the home market prices of the South Korean
producer were below the cost of production, the petitioner based normal
value on constructed value. The petitioner calculated constructed value
by adding profit to the figures that it used to compute the cost of
production. It based profit on the same financial statements it used
for the calculation of SG&A expenses. We reviewed the calculation of
constructed value and accepted the underlying cost data contained in
the petitions, as revised and/or supplemented by the March 8, 12, and
16, 1999, submissions.
Fair Value Comparison
Based on the data provided by the petitioner, we find that there is
reason to believe that imports of certain aperture masks from Japan and
South Korea are being, or are likely to be, sold at less than fair
value.
The margin calculations in the petitions, as revised in the March
16, 1999, supplement to the petitions, indicate dumping margins ranging
from 3.77 to 85.34 percent for certain aperture masks from Japan and a
dumping margin of 10.61 percent for certain aperture masks from South
Korea.
If it becomes necessary at a later date to consider the petitions
as a source of facts available under section 776 of the Act, we may
review and, if necessary, revise the margin calculations.
Allegations and Evidence of Material Injury and Causation
The petitions allege that the U.S. industry producing the domestic
like product is being materially injured, and is threatened with
material injury, by reason of imports of the subject merchandise sold
at less than normal value. The petitioner explained that the industry's
injured condition is evident in declining trends in capacity
utilization, income growth, and profits. The allegations of injury and
causation are supported by relevant evidence including lost sales and
pricing information. 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 they meet the statutory requirements
for initiation. See Initiation Checklist, dated March 16, 1999.
Initiation of Antidumping Investigations
We have examined the petitions on certain aperture masks from Japan
and South Korea and have found that they meet the requirements of
section 732 of the Act. Therefore, we are initiating antidumping duty
investigations to determine whether imports of certain aperture masks
from Japan and South Korea are being, or are likely to be, sold in the
United States at less than fair value.
Our preliminary determinations will be issued by August 3, 1999,
unless the deadline for the determinations is extended.
Initiation of Cost Investigation
As explained above, the Department has found that there are
``reasonable grounds to believe or suspect'' that sales of certain
aperture masks in the comparison markets for Japan and South Korea were
made below their respective cost of production within the meaning of
section 773(b)(2)(A)(i) of the Act. Therefore, we are initiating
countrywide sales-below-cost investigations with respect to certain
aperture masks from Japan and South Korea.
Distribution of Copies of the Petitions
In accordance with section 732(b)(3)(A) of the Act, copies of
public versions of the petitions have been provided to the
representatives of the Governments of Japan and South Korea.
International Trade Commission Notification
We have notified the ITC of our initiation of these investigations,
as required by section 732(d) of the Act.
[[Page 13771]]
Preliminary Determination by the ITC
The ITC will determine by April 12, 1999, whether there is a
reasonable indication that imports of certain aperture masks from Japan
and South Korea are causing material injury, or threatening to cause
material injury, to a U.S. industry. A negative ITC determination will
result in termination of the investigations; otherwise, the
investigations will proceed according to statutory and regulatory time
limits.
This notice is published in accordance with section 777(i) of the
Act.
Dated: March 16, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-6934 Filed 3-19-99; 8:45 am]
BILLING CODE 3510-DS-P