[Federal Register Volume 66, Number 114 (Wednesday, June 13, 2001)]
[Notices]
[Pages 31888-31892]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-14915]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-533-824, A-583-837]
Notice of Initiation of Antidumping Duty Investigations:
Polyethylene Terephthalate Film, Sheet, and Strip (PET Film) From India
and Taiwan
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Initiation of antidumping duty investigations.
-----------------------------------------------------------------------
EFFECTIVE DATE: June 13, 2001.
FOR FURTHER INFORMATION CONTACT: Ron Trentham or Jeffrey Pedersen at
(202) 482-6320 and (202) 482-4195, respectively; AD/CVD Enforcement,
Office 4, Group II, Import Administration, International Trade
[[Page 31889]]
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, DC 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 (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 Petitions
On May 17, 2001, the Department of Commerce (the Department)
received petitions 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 petitions
throughout the 20-day initiation period.
In accordance with section 732(b) of the Act, the petitioners
allege that imports of polyethylene terephthalate film, sheet and strip
(PET film) from India and Taiwan 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 petitioners filed these petitions on
behalf of the domestic industry because they are interested parties as
defined in section 771(9) (C) of the Act and have demonstrated
sufficient industry support with respect to each of the antidumping
investigations that they are requesting the Department to initiate (see
the Determination of Industry Support for the Petitions section below).
Scope of Investigations
For purposes of these investigations, the products covered are all
gauges of raw, pretreated, or primed PET film, whether extruded or
coextruded. Excluded are metallized 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 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, 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, N.W., Washington, D.C. 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 determinations.
Determination of Industry Support for the Petitions
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\
---------------------------------------------------------------------------
\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; Recission of
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).
---------------------------------------------------------------------------
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 petitions 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 petitions'
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
petitions.
Section 732(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 732(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 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.
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 Antidumping
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 with respect to each of the two countries
represent over 50 percent
[[Page 31890]]
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 these petitions are
filed on behalf of the domestic industry within the meaning of section
732(b)(1) of the Act.
Constructed Export Price, Export Price and Normal Value
India
The petitioners determined export prices (``EP'') and constructed
export prices (``CEP'') based on their own market research reports
tracking the selling activities of two Indian producers active in the
United States market, Garware Polyester Ltd. (``Garware'') and Polyplex
Corporation (``Polyplex''). According to the petitioners, neither
company sells directly to U.S. end users, but rather sell through the
companies' respective U.S. sales agent/distributor. The petitioners
state that Garware sells its products through its affiliated sales
agent/distributor, Global PET Films (``Global''), while Polyplex sells
through an unaffiliated sales agent/distributor. The petitioners based
their U.S. price calculations on the prices of the U.S. distributors to
U.S. end users. We do not believe it is appropriate, in this instance,
to use the submitted U.S. prices for Polyplex because these prices are
based on the prices of an unaffiliated U.S. distributor to a U.S. end
user, and not on Polyplex's prices to that unaffiliated U.S.
distributor. The petition also contains two other U.S. prices from
India (i.e., Garware's prices through its affiliated U.S. distributor,
Global, one for 48 gauge and one for thick industrial film) on which we
can calculate an estimated dumping margin. Therefore, we are basing the
U.S. price on Garware's CEP prices through its affiliated distributor,
Global.
To derive CEP for Garware, the petitioner deducted from the price
quote an affiliated party selling markup, ocean freight, U.S. brokerage
and handling, U.S. inland freight from port to warehouse, marine
insurance, U.S. customs duties, U.S. warehousing, U.S. inland freight
from warehouse to customer, slitting costs and material losses
associated with slitting. We recalculated the affiliated party selling
markup to more accurately reflect Global's indirect selling expenses
incurred in the United States. The petitioners made no adjustment for
CEP profit as Garware's fiscal year 1999 financial statement showed no
profit.
With respect to normal value (NV), the petitioners provided home
market prices that were based on their own market reports tracking the
selling activities of Garware and Polyplex in the Indian market for 48
gauge film and thick industrial film. Since we are not using the
submitted U.S. prices for Polyplex, we are not using any of the
submitted home market prices for Polyplex. Furthermore, we did not use
the submitted home market price for Garware for thick industrial film
because the petitioners could not substantiate this price with
documentation or other market reports that would support the veracity
of this price. Thus, the Department determined that Garware's home
market price for the 48 gauge film is the only price in the petition
that is directly comparable to the products exported to the U.S. which
serve as the basis for CEP.
The petitioners calculated an NV by making deductions from the
quoted home market price for 48 gauge film for Garware's credit
expenses, packing costs, slitting costs, material loss, and advertising
expenses. We adjusted the petitioners' NV calculations by adding the
petitioners' reported U.S. packing costs to NV. For NV compared to CEP,
the petitioners deducted a CEP offset.
Although the petitioners provided a margin based on a price-to-
price comparison, they also made a country-wide cost allegation and
provided information demonstrating reasonable grounds to believe or
suspect that sales of PET film in the home market were made at prices
below the fully absorbed cost of production (COP), within the meaning
of section 773(b)(3) of the Act. As a result, they requested that the
Department initiate sales-below-cost investigations on a country-wide
basis.
Pursuant to section 773(b)(3) of the Act, COP consists of the cost
of manufacture (COM), selling, general, and administrative (SG&A)
expenses, and packing costs. The petitioners calculated COM based on
the average consumption rates of a U.S. PET film producer. The
petitioner adjusted COM for known differences in costs between the
United States and India. To calculate SG&A and interest expense, the
petitioner relied upon Garware's 1999 financial statements.\2\ Based
upon the comparison of the adjusted prices of the foreign like product
in the home market to the calculated COP of the product, we find
reasonable grounds to believe or suspect that sales of the foreign like
product were made below the COP, within the meaning of section
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a
country-wide cost investigation. See the Initiation of Cost
Investigations section below.
---------------------------------------------------------------------------
\2\ The petitioners also calculated a producer-specific COP for
Polyplex in the same manner, but since we did not use the submitted
prices for Polyplex, we also did not use the submitted costs for
Polyplex in our calculations.
\2\ The
---------------------------------------------------------------------------
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioners also based NV for sales in India on constructed value (CV).
The petitioners calculated CV using the same COM, depreciation, SG&A
and interest expense figures used to compute Indian home market
costs.\3\ The petitioners did not include profit in calculating CV. As
this approach is conservative, the Department accepted such
methodology.
---------------------------------------------------------------------------
\3\ The petitioners also calculated a producer-specific CV for
Polyplex in the same manner, but since we did not see the submitted
prices for Polyplex, we also did not use the submitted costs for
Polyplex in our calculations.
---------------------------------------------------------------------------
Based on a comparison of CEP to NV, we calculated a margin of 77.52
percent. Based on comparisons of CEP to CV, we calculated margins of
128.33 percent and 142.21 percent.\4\
---------------------------------------------------------------------------
\4\ Since we did not use the submitted home market thick
industrial film price for Garware, we compared Garware's CEP for
this product exclusively to CV.
---------------------------------------------------------------------------
Taiwan
The petitioners determined EP based on their own market research
tracking the activity of the largest Taiwanese exporter of PET film to
the United States, Nan Ya Plastics Industry Co., Ltd. (Nan Ya).
The petitioners submitted Nan Ya's prices for 48 gauge film and DFR
base (industrial) film. For DFR base film, the petitioners submitted a
price from a direct sale from Nan Ya to an unrelated U.S. purchaser.
For this sale, the petitioners calculated a net U.S. price by deducting
ocean freight, U.S. brokerage and handling, U.S. inland freight from
port to warehouse, marine insurance, U.S. customs duties, U.S.
warehousing, U.S. inland freight from warehouse to customer, slitting
costs and material losses associated with slitting.
For 48 gauge film, the petitioners' cited price was a price from an
unaffiliated U.S. distributor to a U.S. end user. We do not believe it
is appropriate, in this instance, to use the submitted 48 gauge film
U.S. price for Nan Ya because this is the price from an unaffiliated
U.S. distributor to a U.S. end user, and not Nan Ya's price to that
unaffiliated U.S. distributor. However, the petition also contains one
other U.S. price from Taiwan on which we can calculate an estimated
dumping margin, i.e., the EP price on a direct sale from Nan Ya to an
unrelated U.S. customer the DFR base film price discussed above.
Therefore, we based U.S. price on this EP sale information.
[[Page 31891]]
With respect to NV, the petitioners provided home market prices
that were obtained from an independent marketing consultant for 48
gauge and DFR base film. The petitioner also made a country-wide cost
allegation and provided information to support its claim that sales of
PET film in the home market were made at prices below the fully
absorbed COP, within the meaning of section 773(b)(3) of the Act. As a
result, they requested that the Department initiate a sales-below-cost
investigation on a country-wide basis. However, since the submitted
home market prices were from outside of the anticipated POI and we are
able to calculate a margin based on constructed value, we did not use
these prices in our analysis and therefore have not conducted an
analysis for sales below cost.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioners also based NV on constructed value (CV), consisting of COM,
depreciation, SG&A expenses, interest expense, profit and packing. The
petitioner calculated COM based on the average consumption rates of a
U.S. PET film producer. The petitioner adjusted COM for known
differences in costs between the United States and Taiwan. To calculate
SG&A, interest expense, and profit, the petitioner relied upon the 1999
financial statements of Nan Ya. We recalculated profit to more
accurately reflect the profits attributable to plastic products (which
predominantly consist of PET film products).
Based on a comparison of EP to CV, calculated in accordance with
section 773(c) of the Act, the estimated dumping margin for PET film
from Taiwan is 15.65 percent.
Initiation of Cost Investigations
India
As noted above, pursuant to section 773(b) of the Act, the
petitioners provided information demonstrating reasonable grounds to
believe or suspect that sales in India were made at prices below the
fully absorbed COP and, accordingly, requested that the Department
conduct country-wide sales-below-COP investigations in connection with
the requested antidumping investigation for India. The Statement of
Administrative Action (SAA), submitted to the U.S. Congress in
connection with the interpretation and application of the URAA, states
that an allegation of sales below COP need not be specific to
individual exporters or producers. See SAA, H. Doc. 103-316, Vol. 1, at
833 (1994). The SAA, at 833, states that ``Commerce will consider
allegations of below-cost sales in the aggregate for a foreign country,
just as Commerce currently considers allegations of sales at less than
fair value on a country-wide basis for purposes of initiating an
antidumping investigation. ``Reasonable grounds' * * * exist when an
interested party provides specific factual information on costs and
prices, observed or constructed, indicating that sales in the foreign
market in question are at below-cost prices.'' Id. Based upon the
comparison of the adjusted prices from the petition for the
representative foreign like products to their COPs, we find the
existence of ``reasonable grounds to believe or suspect'' that sales of
these foreign like products in India were made at prices below their
respective COPs within the meaning of section 773(b)(2)(A)(i) of the
Act. Accordingly, the Department is initiating the requested country-
wide cost investigation with respect to India.
Taiwan
As also noted above, the petitioners alleged that sales in Taiwan
were made at prices below the fully absorbed COP and, accordingly,
requested that the Department conduct country-wide sales-below-COP
investigations in connection with the requested antidumping
investigation for Taiwan. However, since we could not determine whether
sales in Taiwan were made at prices below COP, we are not initiating a
sales-below-COP investigation at this time in the Taiwan investigation.
Critical Circumstances
Section 733(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
under paragraph (A) ``there is a history of dumping and material injury
by reason of dumped imports in the United States or elsewhere of the
subject merchandise, or . . . the person by whom, or for whose account,
the merchandise was imported know or should have known that the
exporter was selling the subject merchandise at less than fair value
and that there was likely to be material injury by reason of such
sales, 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 by 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 733(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
733(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.
Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to
believe that imports of PET film from India and Taiwan are being, or
are likely to be, sold 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 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.
Initiation of Antidumping Investigations
Based upon our examination of the petitions on PET film, and the
petitioners' responses to our supplemental questionnaire clarifying the
petitions, we 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 PET film from India and
Taiwan are being, or are likely to be, sold in the United States at
less than fair value. Unless this deadline
[[Page 31892]]
is extended, 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 governments of India and Taiwan. We will attempt
to provide a copy of the public version of each petition to each
exporter named in the petition, as appropriate.
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 determine, no later than July 2, 2001, whether there
is a reasonable indication that imports of PET film from India and
Taiwan 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 issued and published pursuant to section 777(i) of
the Act.
Dated: June 6, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-14915 Filed 6-12-01; 8:45 am]
BILLING CODE 3510-DS-P