[Federal Register Volume 64, Number 120 (Wednesday, June 23, 1999)]
[Notices]
[Pages 33463-33465]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16000]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-853]


Initiation of Antidumping Duty Investigation: Bulk Aspirin From 
the People's Republic of China

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: June 23, 1999.

FOR FURTHER INFORMATION CONTACT: Craig W. Matney or Alysia Wilson, 
Office 1, AD/CVD Enforcement, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1778 or (202) 482-0108, 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 May 28, 1999, the Department received a petition filed in proper 
form by Rhodia, Inc., referred to hereinafter as ``the petitioner.'' 
The petitioner filed supplemental information to the petition on June 
14, 1999.
    In accordance with section 732(b) of the Act, the petitioner 
alleges that imports of bulk aspirin 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 or threaten to injure 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 bulk 
acetylsalicylic acid, commonly referred to as bulk aspirin, whether or 
not in pharmaceutical or compound form, not put up in dosage form 
(tablet, capsule, powders or similar form for direct human 
consumption). Bulk aspirin may be imported in two forms, as pure ortho-
acetylsalicylic acid or as mixed ortho-acetylsalicylic acid. Pure 
ortho-acetylsalicylic acid can be either in crystal form or granulated 
into a fine powder (pharmaceutical form). This product has the chemical 
formula C9H8O4. It is defined by the 
official monograph of the United States Pharmacopoeia (USP) 23. It is 
classified under the Harmonized Tariff Schedule of the United States 
(HTSUS) subheading 2918.22.1000.
    Mixed ortho-acetylsalicylic acid consists of ortho-acetylsalicylic 
acid combined with other inactive substances such as starch, lactose, 
cellulose, or coloring materials and/or other active substances. The 
presence of other active substances must be in concentrations less than 
that specified for particular nonprescription drug combinations of 
aspirin and active substances as published in the Handbook of 
Nonprescription Drugs, eighth edition, American Pharmaceutical 
Association. This product is classified under HTSUS subheading 
3003.90.0000. Although the HTSUS subheadings are 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

[[Page 33464]]

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 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.
    To the best of the Department's knowledge, the petitioner is the 
sole U.S. producer of the domestic like product. Additionally, no 
person who would qualify as an interested party pursuant to sections 
771(9) (C), (D), (E) or (F) of the Act has expressed opposition on the 
record to the petition. Thus, the petitioner accounts for more than 50 
percent of the production of the domestic like product. Accordingly, in 
accordance with section 732(c)(4) of the Act, we determine that the 
petition has been filed on behalf of the domestic industry. See 
Initiation Checklist dated May 17, 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 four potential PRC exporters and 
producers of bulk aspirin. The petitioner based export price (EP) on 
(1) an offer for sale of the subject merchandise to a U.S. purchaser by 
a PRC exporter during the first quarter of 1999; (2) the market prices 
of the subject merchandise paid by a U.S. purchaser; (3) U.S. import 
statistics for 1998; (4) U.S. import statistics for the first quarter 
of 1999; and (5) export statistics from the PRC. From these starting 
prices, the petitioner deducted international freight and marine 
insurance, when the terms of the sale were delivered, and import 
duties, where appropriate. The petitioner based international freight 
and marine insurance fees on the difference between the FAS and the CIF 
values stated in the U.S. Bureau of the Census import statistics for 
1998 imports of subject merchandise from China. Additionally, the 
petitioner deducted U.S. import duties of 8.7 percent from the dutiable 
value to obtain the net export price.
    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 processes that the petitioner uses in its plant which is 
most comparable in level of technology to production processes utilized 
by several of the major PRC producers of bulk aspirin. The petitioner 
presented two alternative methods for calculating NV: The first assumes 
that the primary material input is purchased, and the second assumes 
that this input is produced in-house.
    Materials, utilities, and recovered by-products were valued based 
on Indian prices obtained from public information contained in an 
affidavit supplied by the petitioner on Indian domestic market prices, 
international publications containing the prices applicable to India, 
Indian import statistics, and U.S. export statistics. 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 petitioner 
reduced the total cost of production (COP) by the value of by-products 
recovered. For factory overhead; selling, general and administrative 
expenses; and profit, the petitioner applied rates derived from 
information gathered from the financial statements of a publicly-traded 
Indian producer of aspirin. The petitioner added one percent of COP to 
account for packing factor costs, consistent with Department practice 
in certain previous cases. (For further information on the EP and NV 
calculation methodology, see Initiation Checklist and Calculation 
Adjustments Memorandum, both dated June 17, 1999.)

Fair Value Comparisons

    Based on the data provided by the petitioner, there is reason to 
believe that imports of bulk aspirin 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 8.28 
percent to 144.02 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 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.

[[Page 33465]]

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 bulk aspirin 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 
November 4, 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 July 12, 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 bulk aspirin 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: June 17, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-16000 Filed 6-22-99; 8:45 am]
BILLING CODE 3510-DS-P