[Federal Register Volume 66, Number 114 (Wednesday, June 13, 2001)]
[Notices]
[Pages 31892-31894]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-14914]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-533-825]


Notice of Initiation of Countervailing Duty Investigation: 
Polyethylene Terephthalate Film, Sheet, and Strip (PET film) from India

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

ACTION: Initiation of Countervailing Duty Investigation.

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EFFECTIVE DATE: June 13, 2001.

FOR FURTHER INFORMATION CONTACT: Alexander Amdur or Howard Smith, 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; (202) 482-
5346 or (202) 482-5193, 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 references to the provisions codified at 
19 CFR Part 351 (2000).

The Petition

    On May 17, 2001, the Department received a petition filed in proper 
form by the following parties: DuPont Teijin Films, Mitsubishi 
Polyester Film, and Toray Plastics (America) Inc. (collectively, the 
petitioners). The Department received from the petitioners information 
supplementing the petition throughout the 20-day initiation period.
    In accordance with section 702(b)(1) of the Act, the petitioners 
allege that manufacturers, producers, or exporters of polyethylene 
terephthalate film, sheet and strip (PET film) in India receive 
countervailable subsidies within the meaning of section 701 of the Act.
    The Department finds that the petitioners filed this petition on 
behalf of the domestic industry because they are interested parties as 
defined in sections 771(9)(C) of the Act and have demonstrated 
sufficient industry support with respect to the countervailing duty 
investigation that they are requesting the Department to initiate (see 
the Determination of Industry Support for the Petition section below).

Scope of Investigation

    For purposes of this investigation, the products covered are all 
gauges of raw, pretreated, or primed PET film, whether extruded or 
coextruded. Excluded are metalisized films and other finished films 
that have had at least one of their surfaces modified by the 
application of a performance-enhancing resinous or inorganic layer of 
more than 0.00001 inches thick. Imports of PET film are classifiable in 
the Harmonized Tariff Schedule of the United States (HTSUS) under item 
number 3920.62.00. HTSUS subheadings are provided for convenience and 
Customs purposes. The written description of the scope of this 
proceeding is dispositive.
    During our review of the petition, 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, we are setting aside a period 
for parties to raise issues regarding product coverage. See Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27295, 27323 (May 19, 
1997). The Department encourages all parties to submit such comments 
within 20 days from the 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 scope comment period 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.

Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department 
invited representatives of the Government of India (GOI) for 
consultations with respect to the petition. The GOI did not accept our 
invitation to hold consultations before the initiation.

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 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 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 Panel Displays and 
Display Glass from Japan: Final Determination; Recession of 
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).

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[[Page 31893]]

    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 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.
    The domestic like product referred to in the petition is all PET 
film, including equivalent PET film. In a prior antidumping 
investigation, the ITC adopted this definition of the domestic like 
product. See Polyethylene Terephthalate Film, Sheet, and Strip from 
Japan and the Republic of Korea, (ITC Pub. No. 2383) (May, 1991) (Final 
Determination). Because no party has commented on the petition's 
definition of the domestic like product, and there is nothing on the 
record to indicate that this definition is inaccurate, the Department 
has adopted the domestic like product definition set forth in the 
petition.
    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(c)(4) 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 702(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.
    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 ``other 
information'' it obtained through research and which is attached to the 
Initiation Checklist (See Import Administration Countervailing Duty 
Investigation Initiation Checklist (Initiation Checklist), Attachment 
I, Re: Industry Support, June 6, 2001, on file in the Central Records 
Unit (CRU) of the main Department of Commerce building). Based on 
information from these sources the Department determined that producers 
supporting the petition represent over 50 percent of total production 
of the domestic like product. Additionally, no person who would qualify 
as an interested party pursuant to section 771(9) of the Act has 
expressed opposition to the petition.
    Accordingly, the Department determines that this petition is filed 
on behalf of the domestic industry within the meaning of section 
702(b)(1) of the Act.

Injury Test

    Because India is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, section 701(a)(2) applies to this 
investigation. Accordingly, the ITC must determine whether imports of 
the subject merchandise from India materially injure, or threaten 
material injury to, a U.S. industry.

Allegations and Evidence of Material Injury and Causation

    The petitioners allege that the U.S. industry producing the 
domestic like product is being materially injured, or is threatened 
with material injury, by reason of subsidized and, as noted below, 
dumped imports of the subject merchandise. The petitioners contend that 
the industry's injured condition is evident in declining trends in U.S. 
selling prices, sales, revenue and market share.
    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 determined 
that these allegations are supported by accurate and adequate evidence 
and meet the statutory requirements for initiation. See Attachment II 
to the Initiation Checklist-Analysis of Allegations and Evidence of 
Material Injury and Causation.

Period of Investigation (POI)

    The petitioners contend that the POI is April 1, 2000 through March 
31, 2001, which is the last completed fiscal year for each of the 
alleged producers/exporters of the subject merchandise. If these 
companies do not have the same fiscal year then the POI would be 
calendar year 2000.

Allegations of Subsidies

    Section 702(b) of the Act requires the Department to initiate a 
countervailing duty proceeding whenever an interested party files a 
petition, on behalf of an industry, that (1) alleges the elements 
necessary for an imposition of a duty under section 701(a), and (2) is 
accompanied by information reasonably available to petitioners 
supporting the allegations.
    We are initiating an investigation of the following programs 
alleged in the petition to have provided countervailable subsidies to 
manufacturers, producers and exporters of the subject merchandise in 
India (a full description of each program is provided in the Initiation 
Checklist): 
A. GOI Programs:
    1. The Duty Entitlement Passbook Scheme (DEPBS)--Pre-and Post-
Export Credits
    2. Advanced License Scheme
    3. Special Import Licenses (SILs)
    4. Export Promotion Capital Goods Scheme (EPCGS)
    5. Pre-and Post-shipment Export Financing
    6. Exemption of Export Credit from Interest Taxes
    7. Income Tax Exemption Scheme (ITES) (Sections 10A, 10B and 80 
HHC)
    8. Loan Guarantees from the GOI
    9. Benefits for Export Processing Zones/Export Oriented Units
B. State of Maharashtra Programs:
    1. Octroi Refund Scheme
    2. Sales Tax Incentive Scheme
    3. Capital Incentive Scheme
    4. Electricity Duty Exemption Scheme
C. State of Utter Pradesh Programs:
    1. Sales Tax Incentive Scheme
    2. Capital Incentive Scheme

    We are not initiating an investigation of the following programs 
alleged in the petition to have provided countervailable subsidies to 
manufacturers, producers and exporters of the subject merchandise in 
India:

1. State of Utter Pradesh (SUP) Transport Subsidy Scheme

    The petitioners claim that the SUP provides a state transport 
subsidy at the rate of 25 percent of the cost of transport. However, 
the petition does not provide any information on whether this program 
is specific under section 771(5A) of the Act.

2. State of Gujarat (SOG) Infrastructure Assistance Schemes

    The petitioners, citing to a document entitled ``Gujarat Industrial 
Policy--2000,'' allege that the SOG provides three types of 
infrastructure assistance: (1) Assistance for creating infrastructure 
facilities and research to specific industries, including ``plastic 
processing industries;'' (2) assistance for

[[Page 31894]]

infrastructure for medium and large industrial projects in rural areas; 
and (3) additional incentives ``at the rate of 25 percent under all of 
the schemes'' for industrial units ``coming up'' in identified 
``backward talukas.'' The petitioners also state that the document on 
Gujarat Industrial Policy provides ``direct evidence'' of the planned 
existence of these programs during the POI. However, the information 
provided by the petitioners regarding the Infrastructure Assistance 
Scheme only provides information on the intentions of the SOG to 
provide assistance under this scheme in 2000. For example, the document 
entitled ``Gujarat Industrial Policy--2000'' uses such phrases as a ``a 
scheme will be introduced,'' ``assistance will be provided,'' and 
``intends to introduce.'' The petition thus provides no information 
that the Infrastructure Assistance Scheme in fact existed during the 
POI. Since the petitioners have not provided information on whether 
this scheme in fact existed during the POI, they have therefore not 
provided sufficient information supporting their allegations that this 
program provides a financial contribution under section 771(5)(D) of 
the Act, that this program provides a benefit under section 771(5)(E) 
of the Act, or that this program is specific under section 771(5A) of 
the Act.

3. State of Madhya Pradesh (SMP) Sales Tax Incentive Scheme

    The petitioners based their allegations concerning this program on 
a SMP state profile. The SMP state profile includes one sentence on 
this program under ``Industrial Incentive Schemes,'' stating ``sales 
tax exemption/deferment for 4 to 9 years.'' This information does not 
support the petitioners' allegation that this program is specific under 
section 771(5A) of the Act.

4. SMP Capital Incentive Scheme

    The petitioners based their allegations concerning this program on 
a SMP state profile. The SMP state profile includes one sentence on 
this program under ``Industrial Incentive Schemes,'' stating ``capital 
investment subsidy at the rate of 5 percent to 15 percent.'' This 
information does not support the petitioners' allegation that this 
program is specific under section 771(5A) of the Act.

Critical Circumstances

    The petitioners request that the Department initiate a critical 
circumstances investigation of Indian PET film because the petitioners 
believe that these imports are likely to ``undermine seriously the 
remedial effect of any * * * countervailing duty order.''
    Section 703(e)(1) of the Act states that the Department will find 
that critical circumstances exist, at any time after the date of 
initiation, when there is a reasonable basis to believe or suspect that 
(A) the alleged countervailable subsidies are inconsistent with the 
Subsidies Agreement and (B) there have been massive imports of the 
subject merchandise over a relatively short period of time. Section 
351.206(h) of our regulations defines ``massive imports'' as imports 
that have increased by at least 15 percent over the imports during an 
immediately preceding period of comparable duration. Section 351.206(i) 
of the regulations states that ``relatively short period'' will 
normally be defined as the period beginning on the date the proceeding 
begins and ending at least three months later.
    At this time, the petitioners have not supported their allegation 
under section 703(e)(1) of the Act and section 351.206 of the 
Department's regulations. Although the petitioners provided data 
indicating significant increases in imports over a three-year period, 
we do not consider this to be sufficient evidence of massive imports 
over a relatively short period of time within the meaning of section 
703(e)(1)(B) of the Act and section 351.206 of the Department's 
regulations. If, at a later date, the petitioners adequately allege the 
elements of critical circumstances, based on reasonably available 
information, the Department will investigate this matter further.

Initiation of Countervailing Duty Investigation

    The Department has examined the countervailing duty petition on PET 
film from India, and found that it complies with the requirements of 
section 702(b) of the Act. Therefore, in accordance with section 702(b) 
of the Act, we are initiating a countervailing duty investigation to 
determine whether manufacturers, producers, or exporters of PET film 
from India receive countervailable subsidies.

Distribution of Copies of the Petition

    In accordance with section 702(b)(4)(A)(i) of the Act, a copy of 
the public version of the petition has been provided to the 
representatives of the GOI. We will attempt to provide a copy of the 
public version of the petition to each exporter named in the petition, 
as appropriate.

International Trade Commission Notification

    Pursuant to section 702(d) of the Act, we have notified the ITC of 
our initiation.

Preliminary Determination by the ITC

    The ITC will determine, no later than July 2, 2001, whether there 
is a reasonable indication that imports of PET film from India 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.

    Dated: June 6, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-14914 Filed 6-12-01; 8:45 am]
BILLING CODE 3510-DS-P