[Federal Register Volume 65, Number 156 (Friday, August 11, 2000)]
[Notices]
[Pages 49224-49227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-20445]



[[Page 49224]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-861, A-580-845, A-412-819]


Initiation of Antidumping Duty Investigations: Desktop Note 
Counters and Scanners From the People's Republic of China, the Republic 
of Korea and the United Kingdom

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

EFFECTIVE DATE: August 11, 2000.

FOR FURTHER INFORMATION CONTACT: Craig Matney or Gregory Campbell, 
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) 482-2239, 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 (``Act'') by the 
Uruguay Round Agreements Act (``URAA''). In addition, unless otherwise 
indicated, all citations to the Department of Commerce's 
(``Department'') regulations are to 19 CFR Part 351 (1999).

The Petitions

    On July 17, 2000, the Department received petitions filed in proper 
form by Cummins-Allison Corporation, hereinafter referred to as ``the 
petitioner.'' The Department received information supplementing the 
petitions throughout the initiation period.
    In accordance with section 732(b) of the Act, the petitioner 
alleges that imports of desktop note counters and desktop note scanners 
from the People's Republic of China (``PRC''), the Republic of Korea 
(``Korea'') and the United Kingdom (``U.K.'') 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 these petitions 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 with 
respect to the antidumping investigations that it has requested the 
Department to initiate (see Determination of Industry Support for the 
Petitions section below).

Scope of Investigation

    The products covered by these investigations are commonly referred 
to as desktop note counters (``counters'') and desktop note scanners 
(``scanners''), whether assembled, partially assembled or unassembled, 
with or without operation-enabling software loaded. Counters and 
scanners are document handling machines that employ an electro-
mechanical processing mechanism to accurately count currency bills, 
bank notes, coupons, script, or other value-based paper documents and 
to stack them in an organized fashion. The processing mechanism 
typically encompasses a feeder assembly from which documents are 
separated and introduced into the machine, a paper path through which 
the documents are fed, a transport mechanism, a sensing device located 
along the paper path that counts the documents, and a stacking location 
(or locations) that accepts the documents after counting and/or 
arranging them. Counters and scanners also have an integrated keypad, 
or keyboard, and a display panel. Both counters and scanners can 
incorporate a sensor device for detecting suspect (i.e., counterfeit) 
documents. Scanners have additional sensors, or scanning devices, that 
enable the machines to distinguish documents by denomination. Scanners 
and counters may consist of one or more stacker assemblies to 
accommodate bill sorting. The counters and scanners subject to these 
investigations are portable; they typically weigh less than 100 pounds 
and may be easily moved by hand from one location to another.
    Specifically excluded from the scope of these investigations are 
counters and scanners that are too large to be considered portable, or 
desktop, which are typically designed for very high volume use in 
regional and headquarter vaults of commercial banks and central bank 
vaults. However, the simple attachment of weights, stands, wheels, or 
similar devices does not, by itself, remove an otherwise portable 
counter or scanner from the scope of these investigations. Other 
document and currency handling machines, such as currency wrappers, 
currency verifiers, bundle counters, coin-handling machines, bill-
accepting devices used in vending machines, and ATM machines, also are 
excluded from the scope of these investigations.
    Imports of counters and scanners are currently classifiable under 
subheading 8472.90.9520 of the Harmonized Tariff Schedule of the United 
States (``HTSUS''). Although HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the scope 
of these investigations is dispositive.
    During our review of the petitions, we discussed the scope with the 
petitioner to ensure that it 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 27323), we are setting 
aside a period for interested parties to raise issues regarding product 
coverage. The Department encourages all interested parties to submit 
such comments within 20 calender 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 interested 
parties prior to the issuance of the preliminary determinations.

Determination of Industry Support for the Petitions

    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 
petitions have the requisite industry support, the statute directs the 
Department to look to producers and workers who produce 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

[[Page 49225]]

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\
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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 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 the 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 subtitle.'' 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 petitions is the 
single domestic like product defined in the ``Scope of Investigations'' 
section above. No party has commented on the petitions' definition of 
the domestic like product, and there is nothing on the record to 
indicate that this definition is inaccurate. The Department, therefore, 
has adopted the domestic like product definition set forth in the 
petitions.
    Moreover, the Department has determined that the petitions contain 
adequate evidence of industry support; therefore, polling is 
unnecessary (see Initiation Checklist, dated August 7, 2000 
(``Initiation Checklist''), at Industry Support). The petitioner 
indicated that there may be one additional U.S. producer accounting for 
a ``very small volume of subject merchandise.'' We attempted to contact 
the potential producer identified by the petitioner, but our attempts 
were unsuccessful. We have no knowledge of other domestic producers. 
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.

Normal Value and Export Price

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department based its decision to 
initiate these investigations. The petitioner, in determining normal 
value (``NV'') for Korea and the U.K., relied upon price data contained 
in confidential foreign market research reports filed with the 
Department. At the Department's request, the petitioner arranged for 
the Department to contact the author of each report to verify the 
accuracy of the data, the methodology used to collect the data, and the 
credentials of those gathering the market research.
    The Department's discussions with the author of each market 
research report are summarized in separate memoranda entitled 
``Memorandum to Case File'' RE: Market Research Report, dated August 7, 
2000. The sources of data for the deductions and adjustments relating 
to home market (``HM'') price, U.S. price, and factors of production 
are also discussed in the Initiation Checklist. Should the need arise 
to use any of this information as facts available under section 776 of 
the Act in our preliminary or final determinations, we may re-examine 
the information and revise the margin calculations, if appropriate.

PRC

Normal Value

    The petitioner asserts that the Department considers the PRC to be 
a non-market economy country (``NME'') and, therefore, constructed NV 
based on the factors of production (``FOP'') methodology pursuant to 
section 773(c) of the Act. In previous cases, the Department has 
determined that the PRC is an NME. See, e.g., Heavy Forged Hand Tools, 
Finished or Unfinished, With or Without Handles, From the People's 
Republic of China, 64 FR 5770, 5773 (February 5, 1999). In accordance 
with section 771(18)(C)(i) of the Act, the NME status remains in effect 
until revoked by the Department. The NME status of the PRC has not been 
revoked by the Department and, therefore, remains in effect for 
purposes of the initiation of this investigation. Accordingly, the NV 
of the product appropriately is based on FOP valued in a surrogate 
market economy country in accordance with section 773(c) of the Act. In 
the course of this investigation, all parties will have the opportunity 
to provide relevant information related to the issues of the PRC's NME 
status and the granting of separate rates to individual exporters.
    In accordance with section 773(c)(4) of the Act, the petitioner 
valued FOP for counters, where possible, on reasonably available, 
public surrogate country data. Citing past Department practice, the 
petitioner used India as the surrogate country. Direct materials values 
were based on price quotes obtained from a market research firm. For 
those direct materials for which prices in India were unavailable, the 
petitioner based the surrogate value on its own costs. See Initiation 
Checklist and Memorandum to Case File: Initiation Margin Calculations 
(``PRC calculation memorandum'') dated August 7, 2000. Labor was valued 
using the regression-based wage rate for the PRC, in accordance with 19 
CFR 351.408(c)(3). Electricity was valued using the petitioner's own 
experience regarding the energy required to produce one unit. For 
overhead, SG&A and profit, the petitioner applied rates derived from 
the publicly available annual report of an Indian producer of 
comparable merchandise, Methodex Systems Limited. Packing costs were 
calculated using the petitioner's own experience regarding packing 
materials and packing labor hours. The petitioner added U.S. direct 
selling expenses to NV. However, in accordance with the Department's 
normal NME methodology, we did not include this circumstance of sale 
adjustment in the margin calculations. See Titanium Sponge from the 
Russian Federation, Notice of Final Results of Antidumping Duty 
Administrative Review, 62 FR 48605 (September 16, 1997). The Department 
made several additional changes to the petitioner's calculation of NV, 
as discussed in the PRC calculation memorandum.

Export Price and Constructed Export Price

    The petitioner identified two companies, Dong Bo and Toyocom, that 
produce subject merchandise in the PRC. According to the petitioner, 
Dong Bo sells subject merchandise directly to unaffiliated customers in 
the United States, whereas Toyocom sells subject merchandise through an 
affiliated reseller. For Dong Bo, the petitioner based export price 
(``EP'') on price quotes for Dong Bo counters obtained from a U.S. 
distributor. To calculate EP, the petitioner deducted from the price 
quote a distributor's gross margin (i.e., distributor mark-up) and 
movement expenses (ocean freight, FOB charges, delivery charges, 
document and handling charges, clearance charges, insurance costs, and 
U.S. Customs duty). For Toyocom, the petitioner based constructed 
export price (``CEP'') on seven price quotes for Toyocom counters 
obtained from unaffiliated U.S. distributors. To calculate CEP, the 
petitioner deducted from the price quotes, in addition to the expenses 
listed above for the calculation of EP for Dong Bo, direct and indirect 
selling expenses, and CEP profit. The Department recalculated the 
distributor's gross margin, indirect selling expenses and imputed 
credit expenses using more contemporaneous and product-specific data 
from the financial statements of the three U.S. office equipment 
distributors. See Initiation Checklist and PRC calculation memorandum.

[[Page 49226]]

    Based on comparisons of EP, or CEP, to NV, calculated in accordance 
with section 773(c) of the Act, the estimated dumping margins for 
counters and scanners from the PRC range from 66.44 percent to 354.34 
percent.

Korea

Normal Value

    The petitioner identified five producers of counters in Korea, two 
of which were found to export subject merchandise to the United States. 
The petitioner obtained home market pricing data for Plus Banking 
Machine Company (``Plus'') and Shinsung Electronics Company, Ltd. 
(``Shinsung''), two producers/exporters of counters in Korea. However, 
because the petitioner was unable to obtain U.S. price quotes for 
Shinsung, it based NV on the HM price quotes from Plus for models 
identical to those offered for sale in the United States. To calculate 
NV, the petitioner made the following adjustments to the price quotes: 
(1) deducted HM imputed credit expenses and HM packing expenses; and 
(2) added U.S. imputed credit expenses and U.S. packing expenses.
    The Department adjusted the petitioner's calculation of the U.S. 
imputed credit expense based on more contemporaneous and product-
specific information (see Initiation Checklist). Additionally, although 
Plus sells counters directly to end users in the home market while 
selling to distributors in the U.S. market, the petitioner was unable 
to quantify any adjustment for the differences in the level of trade 
between the two markets.

Export Price

    The petitioner based EP on price quotes for two models of Plus 
counters obtained from several unaffiliated U.S. distributors. To 
calculate EP, the petitioner deducted distributor's gross margin and 
movement expenses (specifically, ocean freight, FOB charges, delivery 
charges, document and handling charges, clearance charges, insurance 
charges, and customs duties). The Department recalculated distributor's 
gross margin, indirect selling expenses and imputed credit expenses 
using more contemporaneous and product-specific data contained in the 
financial statements of the three U.S. office equipment distributors. 
See Initiation Checklist and Memorandum to Case File: Initiation Margin 
Calculations (``Korea calculation memorandum'').
    Based on comparisons of EP to NV, calculated in accordance with 
section 773(a) of the Act, the estimated dumping margins for counters 
and scanners from Korea range from 0 percent to 66.43 percent.

United Kingdom

Normal Value

    The petitioner identified De La Rue Cash Systems (``De La Rue'') as 
the sole producer of counters and scanners in the U.K. Therefore, the 
petitioner based NV on HM price quotes for sales of counters and 
scanners obtained directly from De La Rue. To calculate NV, the 
petitioner deducted from the price quotes foreign inland freight 
expenses, imputed credit expenses, HM packing expenses, and indirect 
selling expenses. The petitioner then made an adjustment for the 
difference in merchandise to account for certain features of the U.K. 
model that were absent from the U.S. comparison model, where 
applicable. Finally, the petitioner added U.S. packing expenses to the 
price quote. Because De La Rue sells subject merchandise in the home 
market directly to end users, the petitioner did not make any 
adjustments for distributor mark-up.

Constructed Export Price

    The petitioner used CEP as the basis for U.S. price because De La 
Rue sells counters and scanners in the U.S. to unaffiliated customers 
through a U.S.-based affiliated reseller (i.e., De La Rue Cash 
Systems). To establish CEP, the petitioner obtained five price quotes 
for subject merchandise produced by De La Rue-- three offers for sale 
from De La Rue Cash Systems to unaffiliated U.S. end-users and two 
offers for sale from an unaffiliated U.S. distributor to an 
unaffiliated U.S. end-user. The petitioner calculated CEP by deducting 
from the price quotes the unaffiliated distributor's gross margin 
(where applicable), movement-related expenses (specifically, ocean 
freight, FOB charges, delivery charges, document and handling charges, 
clearance charges, insurance charges, and customs duties), imputed 
credit expenses, indirect selling expenses, and CEP profit.
    The Department recalculated distributor's gross margin, indirect 
selling expenses and imputed credit expenses using more contemporaneous 
and product-specific data contained in financial statements of the 
three U.S. office equipment distributors. See Initiation Checklist and 
Memorandum to Case File: Initiation Margin Calculations (``U.K. 
calculation memorandum'').
    Based on comparisons of CEP to NV, calculated in accordance with 
section 773(a) of the Act, the estimated dumping margins for counters 
and scanners from the U.K. range from 35.93 percent to 173.14 percent.

Fair Value Comparisons

    Based on the data provided by the petitioner, there is reason to 
believe that imports of desktop note counters and desktop note scanners 
from the PRC, Korea, and the U.K. are being, or are likely to be, sold 
in the United States at less than fair value

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, or is threatened with 
material injury, by reason of the individual and cumulated imports of 
the subject merchandise sold at less than NV. The petitioner contends 
that the industry's injured condition is evident in the declining 
trends in operating profit, sales volumes, market share, prices, and 
availability of research and development resources. The allegations of 
injury and causation are supported by relevant evidence including U.S. 
Customs import data, lost sales, and pricing information. We have 
assessed the allegations and supporting evidence regarding material 
injury and causation, and have determined that these allegations are 
properly supported by accurate and adequate evidence and meet the 
statutory requirements for initiation (see, Initiation Checklist E.).

Initiation of Antidumping Investigations

    Based upon our examination of the petitions on counters and 
scanners, we have found that the petitions meet the requirements of 
section 732 of the Act. Therefore, we are initiating antidumping duty 
investigations to determine whether imports of counters and scanners 
from the PRC, Korea, and the U.K. are being, or are likely to be, sold 
in the United States at less than fair value. Unless postponed, we will 
make our preliminary determinations no later than 140 days after the 
date of this initiation.

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of each petition has been provided to the 
representatives of the PRC, Korea and the U.K. We will attempt to 
provide a copy of the public version of each petition to each exporter 
named in the petitions, as appropriate.

[[Page 49227]]

International Trade Commission Notification

    We have notified the ITC of our initiations, as required by section 
732(d) of the Act.

Preliminary Determinations by the ITC

    The ITC will preliminarily determine, no later than August 31, 
2000, whether there is a reasonable indication that imports of counters 
and scanners from the PRC, Korea, and the U.K. are causing material 
injury, or threatening to cause material injury, to a U.S. industry. A 
negative ITC determination for any country will result in the 
investigation being terminated with respect to that country; otherwise, 
these investigations will proceed according to statutory and regulatory 
time limits.
    This notice is published pursuant to section 777(i) of the Act.

    Dated: August 7, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-20445 Filed 8-10-00; 8:45 am]
BILLING CODE 3510-DS-P