[Federal Register Volume 67, Number 142 (Wednesday, July 24, 2002)]
[Notices]
[Pages 48437-48440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18731]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-552-801]


Initiation of Antidumping Duty Investigation: Certain Frozen Fish 
Fillets From the Socialist Republic of Vietnam

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

EFFECTIVE DATE: July 24, 2002.

FOR FURTHER INFORMATION CONTACT: Alex Villanueva or Lisa Shishido, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-3208, (202) 482-0413, 
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 regulations 
are to 19 CFR Part 351 (2002).

The Petition

    On June 28, 2002, the Department of Commerce (``Department'') 
received a petition on imports of certain frozen fish fillets from the 
Socialist Republic of Vietnam (``Vietnam'') filed in proper form by 
Catfish Farmers of America (``CFA'') and the individual U.S. catfish 
processors America's Catch Inc.; Consolidated Catfish Co., L.L.C.; 
Delta Pride Catfish, Inc.; Harvest Select Catfish, Inc.; Heartland 
Catfish Company; Pride of the Pond; Simmons Farm Raised Catfish, Inc.; 
and Southern Pride Catfish Co., Inc., hereinafter referred to 
collectively as ``the Petitioners.'' On July 3, 2002, the Department 
requested clarification of certain areas of the petition and received a 
response on July 10, 2002. A second request for clarification was sent 
on July 9, 2002, and the Department received a response on July 11, 
2002.
    In accordance with section 732(b) of the Act, the Petitioners 
allege that imports of certain frozen fish fillets from Vietnam 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 and threaten to injure an industry in 
the United States.
    The Petitioners are domestic farmers and processors of catfish and 
account for over fifty percent of domestic production of catfish 
fillets, as defined in the petition. Therefore, the Department finds 
that the Petitioners have standing to file the petition because they 
are interested parties as defined under section 771(9)(C) of the Act, 
with respect to the merchandise subject to this investigation. The 
Petitioners have demonstrated sufficient industry support with respect 
to the antidumping duty investigation they are requesting the 
Department to initiate (see ``Determination of Industry Support for the 
Petition'' below).

Scope of Investigation

    For purposes of this investigation, the product covered is frozen 
fish fillets, including regular, shank, and strip fillets, whether or 
not breaded or marinated, of the species Pangasius Bocourti, Pangasius 
Hypophthalmus (also known as Pangasius Pangasius), and Pangasius 
Micronemus. The subject merchandise will be hereinafter referred to as 
frozen ``basa'' and ``tra'' fillets, which are the Vietnamese common 
names for these species of fish. These products are classifiable under 
article codes 0304.20.60.30 (Frozen Catfish Fillets), 0304.20.60.96 
(Frozen Fish Fillets, NESOI), 0304.20.60.43 (Frozen Freshwater Fish 
Fillets) and 0304.20.60.57\1\ (Frozen Sole Fillets) of the Harmonized 
Tariff Schedule of the United States (``HTSUS''). This investigation 
covers all frozen fish fillets meeting the above specification, 
regardless of tariff classification. Although the HTSUS subheadings are 
provided for convenience and customs purposes, our written description 
of the scope of this proceeding is dispositive.
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    \1\The Petitioners have included this tariff classification code 
because they believe that the merchandise under investigation is 
entering the United States under this classification based on 
previous uses of the term `sole' to describe Vietnamese basa and 
tra.
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    During our review of the petition, we discussed the scope with the 
Petitioners 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 interested parties to raise issues regarding product coverage. See 
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27295, 
27323 (1997). The Department encourages all interested parties to 
submit such comments within 20 calendar 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

[[Page 48438]]

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 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 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 as a whole of a domestic like product. In investigations 
involving a processed agricultural product that is produced from a raw 
agricultural product, section 771(4)(E) of the Act provides that the 
producers or growers of the raw agricultural product may be considered 
part of the industry producing the processed product if (1) the 
processed agricultural product is produced from the raw agricultural 
product through a continuous line of production and (2) there is a 
substantial coincidence of economic interest between the producers or 
growers of the raw agricultural product and the processors of the 
processed agricultural product based upon relevant economic factors, 
which may include price, added market value, or other economic 
interrelationships.
    Thus, to determine whether the petition has the requisite industry 
support, the statute directs the Department to look to growers, 
processors, 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 the Department and the ITC must apply the 
same statutory definition regarding the domestic like product (see 
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 law.\2\
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    \2\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 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.
    In this case, the domestic like product referred to in the petition 
is the single domestic like product defined in the ``Scope of 
Investigation'' section, above. At this time, the Department has no 
basis on the record to find the petition's definition of the domestic 
like product to be inaccurate. The Department, therefore, has adopted 
the domestic like product definition set forth in the petition.
    Moreover, the Department has determined that the petition contains 
adequate evidence of industry support; therefore, polling was 
unnecessary (see Initiation Checklist Re: Industry Support, July 18, 
2002) (``Initiation Checklist''). To the best of the Department's 
knowledge, 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)(A), (C), (D), (E), or (F) 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 
732(b)(1) of the Act.

Export Price

    The following is a description of the allegation of sales at less 
than fair value (``LTFV'') upon which the Department based its decision 
to initiate this investigation. The sources of data for the deductions 
and adjustments relating to 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 determination, we may reexamine the 
information and revise the margin calculations, if appropriate.
    The Petitioners identified approximately fifty-three Vietnamese 
companies as major producers and exporters of frozen fish fillets in 
Vietnam. See Initiation Checklist at Attachment I.
    The Petitioners submitted LTFV analyses for Vietnam as a non-market 
economy and a market economy. Consequently, the Petitioners calculated 
an export price using a non-market economy and a market economy 
analysis.
    In both the non-market economy and the market economy analysis, the 
Petitioners based export price (``EP'') on quantities and free on board 
(''FOB'') values from Bureau of Census'' import statistics, using the 
weighted average unit values of the merchandise subject to this 
investigation classifiable under HTSUS category 0304.20.60.30. To 
obtain ex-factory prices, in both instances, the Petitioners adjusted 
the average unit value for brokerage and handling and inland freight 
costs. See Initiation Checklist for further information.

Normal Value: Nonmarket Economy

    The Petitioners provided a dumping margin calculation using the 
Department's NME methodology as required by 19 CFR 351.202(b)(7)(i)(C). 
For the normal value (``NV'') calculation, petitioners based the 
factors of production, as defined by section 773(c)(3) of the Act (raw 
materials, labor and energy), for certain frozen fish fillets on 
information from a U.S. catfish producer. The Petitioners asserted that 
they did not have specific, reliable information on frozen basa and tra 
fillet production factors in Vietnam. However, according to the 
Petitioners, all catfish processors, whether they are located in the 
United States or Vietnam, perform the same basic steps in producing 
frozen fish fillets. Therefore, the Petitioners relied upon U.S. 
production factors for the NV calculation, after adjusting for known 
differences in Vietnam. See Initiation Checklist.
    The Petitioners selected India as their surrogate country. The 
Petitioners argued that pursuant to section 773(c)(4) of the Act, India 
is an appropriate surrogate because it is a market-economy country that 
is at a comparable level of economic development to the NME and is a 
significant producer of comparable merchandise. Based on the 
information provided by the Petitioners, we believe that the 
Petitioners' use of India as a surrogate country is appropriate for 
purposes of initiation of

[[Page 48439]]

this investigation. See Initiation Checklist.
    In accordance with section 773(c)(4) of the Act, the Petitioners 
valued factors of production, where possible, on reasonably available, 
public surrogate country data. To value certain raw materials, the 
Petitioners used import statistics from India, as reported in Indian 
Monthly Statistics of Foreign Trade of India, Vol. II-Imports, 
Directorate General of Commercial Intelligence & Statistics, Ministry 
of Commerce, Government of India, Calcutta, excluding those values from 
countries previously determined by the Department to be NME countries. 
For inputs valued in Indian Rupiah and not contemporaneous with the 
period of investigation (``POI'') (i.e., October 2001--March 2002), the 
Petitioners used information from the wholesale price indices (``WPI'') 
in India as published by the Office of the Economic Adviser in the 
Indian Ministry of Commerce and Industry, March 2002, to determine the 
inflation adjustment.
    To value live fish, the major input, the Petitioners stated that 
since Indian Monthly Statistics of Foreign Trade of India were not 
specific to the merchandise subject to this investigation, the 
surrogate value was based on the average price of catfish in India from 
the United Nations Food and Aquaculture Organization (``FAO'') FishStat 
Plus Database. The Petitioners explained their efforts in obtaining 
alternative surrogate values and the reliability of the FAO data in 
Exhibit 22 of the Petition. The Petitioners noted that because the FAO 
price is reported in dollars, they deflated the price to the October 
2001 to March 2002 period by using the United States purchase price 
index (``PPI''), as published by the United States Bureau of Labor 
Statistics. See Initiation Checklist.
    The Petitioners explained that the production of frozen catfish 
fillets generates waste, as the head, tail, skin and viscera are all 
discarded. According to the Petitioners, in the United States, 
processors recover the waste and sell it to rendering plants where it 
may be used for further processing into products such as fish meal or 
fish oil. Furthermore, according to the Petitioners, the Vietnamese 
processors require 3.51 pounds of live fish to produce one pound of 
fillets, and therefore, the waste quantity would be 2.51 pounds for 
every pound of fish fillet. Because the Petitioners could not obtain 
any information on the recovery of offal by Vietnamese processors, they 
deducted from the total material cost an amount for waste recovery 
based on their own experience. The Petitioners were also unable to 
obtain a value for fish offal in India. Therefore, pursuant to 19 CFR 
351.202(b)(7)(i)(B), the value of offal is based on the experience of a 
U.S producer's average for year 2000 and 2001. See Initiation 
Checklist.
    For water, the Petitioners calculated a surrogate value based on 
price data in India as reported by the Second Water Utilities Data 
Book, Asian and Pacific Region, published the Asian Development Bank. 
The Petitioners applied the WPI to inflate the water price to the POI. 
See Initiation Checklist. Data from the Asian Development Bank has 
previously been used by the Department. See Notice of Preliminary 
Results of Antidumping Duty Administrative Review and New Shipper 
Reviews, Partial Rescission of the Antidumping Duty Administrative 
Review, and Rescission of a New Shipper Review, Fresh Water Crawfish 
Tail Meat from the People's Republic of China (''Crawfish'') 65 FR 
60399, 60404 (October 11, 2000).
    To value electricity in India, the Petitioners relied upon the 
Organization for Economic Cooperation and Development's (``OECD'') 
Energy Prices and Taxes data. The Petitioners applied the Indian WPI to 
inflate the electricity price to the POI. See Initiation Checklist.
    Pursuant to 19 CFR 351.408(c)(3), the Department calculates and 
publishes the surrogate values for labor to be used in non-market 
economy cases. The Petitioners explained that because the Department 
has not yet published a labor rate for Vietnam, they have applied the 
regression formula published on the Department's website to derive the 
Vietnamese labor rate that would be calculated using the Department's 
methodology. See Initiation Checklist.
    The Petitioners calculated a simple average for factory overhead, 
selling, general and administrative expenses (SG&A), interest, and 
profit, which were derived from the 2000-2001 financial statements of 
NCC Blue Water Products, Ltd., Integrated Rubian Exports, Ltd. and 
Uniroyal Marine Exports, Ltd., Indian producers of frozen fish fillets.
    We made adjustments to NV for sodium tripolyphosphate, propane and 
the packing materials. For further information, see the Initiation 
Checklist.
    Based on comparisons of EP to NV, calculated in accordance with 
section 773(c) of the Act, the estimated recalculated dumping margin 
for certain frozen fish fillets from Vietnam applying the non-market 
economy methodology is 190.20 percent.

Normal Value: Market Economy

    The price and cost data provided by the Petitioners was examined 
for reasonableness and accuracy. The Petitioners stated that they were 
unable to obtain information on home market or third country prices of 
Vietnamese frozen fish fillets, despite extensive research using the 
Internet and data sources published by organizations such as the World 
Bank, International Monetary Fund, Asian Development Bank, and Bureau 
of Labor Statistics.
    Pursuant to 19 CFR 351.202(b)(7)(i)(B), the Petitioners calculated 
the NV based on constructed value (``CV''), using U.S. production costs 
and factors that have been adjusted for known differences in production 
in Vietnam. See Initiation Checklist. The Petitioners calculated the 
production costs and factors provided by a domestic U.S. producer of 
frozen fish fillets where the Petitioners were unable to obtain 
Vietnamese pricing information. Specifically, the Petitioners were only 
able to obtain published Vietnamese input prices for live fish, labor, 
electricity, and water. To value the fish waste offset, sodium 
tripolyphosphate, propane, and packing materials, the Petitioners used 
U.S. producer input costs. To value factory overhead, SG&A and Profit, 
the Petitioners used a U.S. producer's financial statement 
information\3\. See Initiation Checklist. The values submitted by the 
Petitioners to calculate the CV consist of information reasonably 
available, and are therefore acceptable for purposes of initiation.
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    \3\For purposes of initiation we are accepting the Petitioners' 
use of a U.S. catfish processor's financial statement information to 
derive the financial and profit ratios, but note that in the event 
that we rely on Petition information as facts available, we may re-
examine the appropriateness of the U.S. producers' information as 
the basis for calculating the financial and profit ratios.
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    Based on comparisons of EP to NV, calculated in accordance with 
section 773(a)(c) of the Act, the estimated recalculated dumping margin 
for certain frozen fish fillets from Vietnam applying the market 
economy methodology is 143.7 percent.

Fair Value Comparisons

    Based on the data provided by the Petitioners, there is reason to 
believe that imports of frozen fish fillets from Vietnam 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 petition alleges that the U.S. industry producing the domestic 
like

[[Page 48440]]

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 Petitioners contend that the industry's injured 
condition is evident in (1) reduced shipments; (2) reduced prices; (3) 
declining employment; (4) declining production and capacity 
utilization; (5) growing inventories; and (6) significant financial 
losses.
    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.

Initiation of Antidumping Investigation

    Based upon our examination of the Petition on frozen fish fillets 
from Vietnam, we find 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 frozen fish fillets 
from Vietnam are being, or are likely to be, sold in the United States 
at less than fair value. Unless postponed, we will make our preliminary 
determination no later than 140 days after the date of this initiation.

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 government 
representatives of Vietnam. 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

    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 preliminarily determine, no later than August 12, 
2002, whether there is a reasonable indication that imports of frozen 
fish fillets from Vietnam are causing material injury, or threatening 
to cause material injury, to a U.S. industry. A negative ITC 
determination will result in this investigation being terminated; 
otherwise, this investigation will proceed according to statutory and 
regulatory time limits.
    This notice is published pursuant to section 777(i) of the Act.

    Dated: July 18, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-18731 Filed 7-23-02; 8:45 am]
BILLING CODE 3510-DS-P