[Federal Register Volume 66, Number 67 (Friday, April 6, 2001)]
[Notices]
[Pages 18227-18229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-8524]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-836]


Notice of Initiation of Antidumping Investigation: Live Processed 
Blue Mussels From Canada

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

ACTION: Initiation of Antidumping Investigation.

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EFFECTIVE DATE: April 6, 2001.

FOR FURTHER INFORMATION CONTACT: Ron Trentham, Zev Primor and Paige 
Rivas at (202) 482-6320, (202) 482-4114 and (202) 482-0651, 
respectively; AD/CVD Enforcement Office 4, Group II, 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 references 
to the provisions codified at 19 CFR Part 351 (2000).

The Petition

    On March 12, 2001, the Department of Commerce (the Department) 
received a petition filed in proper form by Great Eastern Mussel Farms 
Inc. (hereinafter, the petitioner). On March 20, 2001, the Department 
received a letter from the petitioner amending the petition. The 
petitioner is a mussel processor in the United States market.
    In accordance with section 732(b) of the Act, the petitioner 
alleges that imports of live processed blue mussels from Canada 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 has demonstrated sufficient 
industry support with respect to the antidumping investigation that it 
is requesting the Department to initiate (see below).

Period of Investigation

    The anticipated period of investigation (POI) is April 1, 2000 
through March 31, 2001.

Scope of Investigation

    Imports covered by the investigation are shipments of live 
processed blue mussels from Canada. Included in the scope are fresh, 
live processed blue mussels (mytilus edulis). Processing includes, but 
is not limited to, purging, grading, debearding, picking, inspecting 
and packing. The live processed blue mussels subject to this 
investigation are currently classifiable under subheadings 0307.31.00 
of the Harmonized Tariff Schedule of the United States (HTSUS). 
Although the HTSUS subheadings are provided for convenience and Customs 
purposes, the Department's written description of the scope of this 
investigation remains dispositive. See Initiation Checklist, Re: 
product description.
    During our review of the petition, we discussed the scope with the 
petitioner to ensure that it accurately reflected the product for which 
the domestic industry is seeking relief. The petitioner agreed that the 
scope of the petition should be expanded to include both farmed and 
non-farmed mussels. See Memorandum to File: Live Blue Processed Mussels 
from Canada--Scope Definition (March 20, 2001). Moreover, as discussed 
in the preamble to the Department's 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 
within 20 days from 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 the preliminary 
determination.

Determination of Industry Support for 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 produce the domestic 
like product. The U.S. International Trade Commission (ITC), which is 
responsible for determining

[[Page 18228]]

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 authorities. 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 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.
    In this case, we have adopted the definition of the domestic like 
product defined in the ``Scope of Investigation'' section, above. That 
definition was developed in consultation with the petitioner.
    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. Finally, section 732(c)(4)(D) of the Act 
provides that, if the petition does not establish support of domestic 
producers or workers accounting for more than 50 percent of the total 
production of the domestic like product, the administering agency 
shall: (i) Poll the industry or rely on other information in order to 
determine if there is support for the petition as required by 
subparagraph (A), or (ii) determine industry support using a 
statistically valid sampling method.
    On March 28, 2001, Confederation Cove Mussel Co. Ltd. (CCMC), a 
Canadian mussel producer, filed a submission stating that the 
petitioner does not constitute 100 percent of the U.S. domestic 
industry. See Letter from CCMC to the Secretary of Commerce, Re: 
Mussels from Canada, Comments on Standing, March 28, 2001. On March 29, 
2001, the petitioner submitted rebuttal comments to CCMC's comments. 
See Letter from the Petitioner to the Secretary in Response to CCMC, 
March 29, 2001. On March 30, 2001, the Government of Canada submitted 
comments reiterating some of the same arguments made by CCMC. See 
Diplomatic Note No. 0101 (March 30, 2001).
    In order to estimate production for the domestic industry as 
defined for purposes of this case, the Department has relied upon not 
only the petition and amendments thereto, but also upon ``other 
information'' it obtained through research. See Determination of 
Industry Support for the Petition for the Initiation of the Antidumping 
Duty Investigation of Live Processed Blue Mussels from Canada (Industry 
Support Memorandum), April 2, 2001, and Initiation Checklist Re: 
Industry Support.
    Based on a review of these sources of information and all submitted 
comments, we have determined that the petitioner accounts for at least 
50 percent of production by the domestic industry. Furthermore, no 
domestic interested party has expressed opposition to the petition. 
Thus, pursuant to section 734(c)(4)(A), there is adequate support for 
the petition.
    Accordingly, we determine that the 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 are descriptions of the allegations of sales at less 
than fair value upon which the Department based its decision to 
initiate these investigations. The sources of data for the deductions 
and adjustments relating to home market price, and U.S. price are 
detailed 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.

Export Price

    The petitioner identified the following Canadian companies as 
processors of blue mussels in its petition: Atlantic Mussels Growers, 
Atlantic Shellfish, PEI Mussel King, Prince Edward Aqua Farms, and 
CCMC. The petitioner based export prices (EPs) on actual prices between 
the Canadian processors and U.S. wholesalers. The prices were obtained 
from U.S. wholesalers by the petitioner. Where appropriate, the 
petitioner made adjustments for movement and packing expenses. The 
movement expenses figures were based on an invoice from a Canadian 
mussels producer to an unaffiliated U.S. customer and a price quote 
from an independent freight company delivering subject merchandise to 
both U.S. and Canadian markets. Further, the petitioner stated that it 
based packing expenses on its own cost experience because the packing 
materials are virtually identical in both markets. To support the 
accuracy of this information the petitioner provided an affidavit from 
the company official that was responsible for collecting the 
information.
    Additionally, the Department conducted its own research in order to 
determine the average entered value of live blue mussels from Canada. 
Based on U.S. Customs data, we determined that the average entered 
value of blue mussels from Canada during the POI was 0.73 dollar per 
pound of mussels (unadjusted for freight and packing). This figure was 
within the range of petitioner's alleged U.S. prices. We also confirmed 
that figure through a publication, SeafoodReport, which tracks U.S. 
imports for a variety of shellfish. See Memorandum to File: Live 
Processed Mussels from Canad--Average Price of Imported Mussels from 
Canada (March 29, 2001).

Normal Value

    The petitioner based normal value (NV) on actual prices from the 
five major processors named above to unaffiliated Canadian wholesalers. 
The NVs were obtained by the petitioner from Canadian wholesalers and 
adjusted for domestic freight and packing charges. The freight expenses 
were based on a price quote provided by an independent freight company 
which provides freight services to both U.S. and Canadian markets. 
Packing expenses were based on the petitioner's own cost experience. To 
support the accuracy of this information, the petitioner provided an 
affidavit from the company official that was responsible for collecting 
the information.

Fair Value Comparisons

    Based upon the comparison of NV to EP, the petitioner calculated 
estimated dumping margins ranging from 15 to 67 percent. Thus, based on 
the data provided by the petitioner, there is reason to believe that 
imports of live

[[Page 18229]]

processed blue mussels from Canada are being, or are likely to be, sold 
at less than fair value.

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, 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 net operating profits, net sales volumes, profit to sales 
ratios, and capacity utilization. The allegations of injury and 
causation are supported by relevant evidence including the U.S. 
Customs' import statistics and the SeafoodReport which indicate that 
imports of blue mussels from Canada in 2000 grew by at least 30 percent 
compared to the prior year. See Seafood Report, at vol. 5, numbers 9 
and 12 (attached to the petition). According to the petitioner, the 
trend of Canadian imports registered similar growth rates in the past 
four years, while during the same period petitioner's sales have been 
declining. 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 at Attachment Re: Material Injury).

Initiation of Antidumping Investigation

    Based upon our examination of the petition on live processed blue 
mussels, and the petitioner's response to our supplemental 
questionnaire clarifying the petition, as well as our conversations 
with industry experts who provided information concerning various 
aspects of the petition, we have found that they meet the requirements 
of section 732 of the Act. See Industry Support Memorandum. Therefore, 
we are initiating an antidumping duty investigation to determine 
whether imports of live processed blue mussels from Canada 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 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 this petition has been provided to the 
representatives of the Government of Canada. We will attempt to provide 
a copy of the public version to each exporter named in the petition, as 
appropriate.

International Trade Commission Notification

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

Preliminary Determinations by the ITC

    The ITC will determine, no later than April 26, 2001, whether there 
is a reasonable indication that imports of live processed blue mussels 
from Canada are causing material injury, or threatening to cause 
material injury, to a U.S. industry. 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 issued and published pursuant to section 777(i) of 
the Act. Effective January 20, 2001, Bernard T. Carreau is fulfilling 
the duties of the Assistant Secretary for Import Administration.

    Dated: April 2, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-8524 Filed 4-5-01; 8:45 am]
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