[Federal Register Volume 67, Number 242 (Tuesday, December 17, 2002)]
[Notices]
[Pages 77223-77225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-31628]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-882]


Notice of Initiation of Antidumping Duty Investigation: Refined 
Brown Aluminum Oxide (Otherwise known as Refined Brown Artificial 
Corundum or Brown Fused Alumina) from the People's Republic of China

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

ACTION: Initiation of Antidumping Duty Investigation

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EFFECTIVE DATE: December 17, 2002.

FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Jim Mathews, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone (202) 482-4136 or (202) 482-2778, 
respectively.

SUPPLEMENTARY INFORMATION:

Initiation Of Investigation

The Petition

    On November 20, 2002, the Department received a petition filed in 
proper form by Washington Mills Company, Inc. On November 27, 2002, the 
petition was amended to include two additional petitioners, C-E 
Minerals and Treibacher Schleifmittel Corporation (collectively, the 
petitioners). The Department received information supplementing the 
petition throughout the initiation period.
    In accordance with section 732(b)(1) of the Tariff Act of 1930, as 
amended (the Act), the petitioners allege that imports of refined brown 
aluminum oxide from the People's Republic of China (PRC) are, 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 the petition on 
behalf of the domestic industry because they are interested parties as 
defined in section 771(9)(C) of the Act and they have demonstrated 
sufficient industry support with respect to the antidumping 
investigation that they are requesting the Department to initiate. See 
infra, ``Determination of Industry Support for the Petition.''

Scope of Investigation

    The merchandise covered by this investigation is ground, pulverized 
or refined artificial corundum, also known as brown aluminum oxide or 
brown fused alumina, in grit size of 3/8 inch or less. Excluded from 
the scope of the investigation is crude artificial corundum in which 
particles with a diameter greater than 3/8 inch constitute at least 50 
percent of the total weight of the entire batch. The scope includes 
brown artificial corundum in which particles with a diameter greater 
than 3/8 inch constitute less than 50 percent of the total weight of 
the batch. The merchandise under investigation is currently 
classifiable under subheading 2818.10.20.00 of the Harmonized Tariff 
Schedule of the United States(HTSUS). Although the HTSUS subheading is 
provided for convenience and customs purposes, the written description 
of the merchandise under investigation is dispositive.
    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 (Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)), 
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 calendar days of publication of this notice. 
Comments should be addressed to Import Administration's Central Records 
Unit, 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 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 the Department's industry support determination, which is 
to be made before the initiation of the investigation, be based on 
whether a minimum percentage of the relevant industry supports the 
petition. 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. Moreover, 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 Department shall either 
poll the industry or rely on other information in order to determine if 
there is 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 a 
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

[[Page 77224]]

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 a 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 
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 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.
    We reviewed the description of the domestic like product presented 
in the petition. At this time, we have no basis on the record to find 
the petition's definition of the domestic like product to be 
inaccurate. Therefore, we have adopted the domestic like product set 
forth in the petition, which is defined in the ``Scope of 
Investigation'' section above.
    Finally, the Department has determined that, pursuant to section 
732(c)(4)(A) of the Act, the petition contains adequate evidence of 
industry support and, therefore, polling is unnecessary. See the Import 
Administration Antidumping Investigation Initiation Checklist, Industry 
Support section, December 10, 2002 (Initiation Checklist), on file in 
the Central Records Unit, Room B-099 of the main Department of Commerce 
building. The Department has determined that the petitioners have 
demonstrated industry support representing over 50 percent of total 
production of the domestic like product. Therefore, the domestic 
producers or workers who support the petition account for at least 25 
percent of the total production of the domestic like product, and the 
requirements of section 732(c)(4)(A)(i) of the Act are met. 
Furthermore, because the Department received no opposition to the 
petition, the domestic producers or workers who support the petition 
account for 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. Thus, the requirements of section 
732(c)(4)(A)(ii) are also met. Accordingly, we determine that this 
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 allegation of sales at less 
than fair value upon which the Department based its decision to 
initiate this investigation. The sources of data for the deductions and 
adjustments relating to the U.S. price and the factors of production 
are discussed in greater detail 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 re-examine the information and revise the margin calculation, if 
appropriate.
    Regarding the information involving non-market economies (NME), the 
Department presumes, based on the extent of central government control 
in an NME, that a single dumping margin, should there be one, is 
appropriate for all NME exporters in the given country. In the course 
of the investigation, all parties will have the opportunity to provide 
relevant information related to the issues of a country's NME status 
and the granting of separate rates to individual exporters. See, e.g., 
Final Determination of Sales at Less Than Fair Value: Silicon Carbide 
from the People's Republic of China, 59 FR 22585 (May 2, 1994).

Export Price

    The petitioners based export price (EP) on the FOB PRC price of the 
subject merchandise as invoiced to one of the petitioners. No 
adjustments were made to this FOB price.

Normal Value

    The petitioners allege that the PRC is an NME country, and that in 
all previous investigations the Department has determined that the PRC 
is an NME. See, e.g., Notice of Final Determination in the Less Than 
Fair Value Investigation of Steel Wire Rope From the People's Republic 
of China, 66 FR 12759, 12761 (Feb. 28, 2001). In accordance with 
section 771(18)(c) of the Act, any determination that a foreign country 
has at one time been considered an NME shall remain in effect until 
revoked. Therefore, the PRC will continue to be treated as an NME 
unless and until its NME status is revoked. Pursuant to section 
771(18)(C)(i) of the Act, because the PRC's status as a NME remains in 
effect, the petitioners determined the dumping margin using an NME 
analysis.
    The petitioners assert that India is the most appropriate surrogate 
country for the PRC, claiming that India is: (1) a market economy; (2) 
a significant producer of comparable merchandise; and (3) at a level of 
economic development comparable to that of the PRC in terms of per-
capita gross national income. 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 this 
investigation.
    The petitioners valued the factors of production using the 
quantities of inputs to produce refined brown aluminum oxide as 
reported by one of the petitioners because the petitioners stated that 
current reliable information about PRC factor quantities was not 
reasonably available. The factors of production and usage amounts were 
derived from the petitioners' average actual production experience for 
various sizes of refined brown aluminum oxide during the period April 
through September 2002.
    The surrogate values for bauxite and coke were based on the 2000-
2001 annual report of Carborundum Universal Limited (CUMI), an Indian 
producer of refined aluminum oxide. The surrogate values for borings 
and electrodes were based on the values reported in the Monthly 
Statistics of the Foreign Trade of India. Labor was valued using the 
regression-based wage rate for the PRC provided by Import 
Administration's website and in accordance with 19 CFR 351.408(c)(3). 
The petitioners valued electricity using the 2000 price for India 
quoted in Energy Prices & Taxes, Quarterly Statistics, published by the 
International Energy Agency of the OECD. The petitioners made an 
adjustment to the sum of these values to account for a small amount of 
ferrosilicon produced and sold as a by-product.
    To determine factory overhead, SG&A, and financial expenses, the 
petitioners relied on ratios derived from the financial statements of 
CUMI. The petitioners valued the by-product, ferrosilicon, by using 
their own sales value. Based on the information provided by the 
petitioners, we believe that the surrogate values represent information 
reasonably available to the

[[Page 77225]]

petitioners and are acceptable for purposes of initiation of this 
investigation.
    Based upon a comparison of EP to normal value (NV), the petitioners 
estimate a margin of 131.38 percent.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of refined brown aluminum oxide from the PRC are 
being, or are likely to be, sold at less than fair value.

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 imports of the subject merchandise 
sold at less than NV.
    The petitioners contend that the industry's injured condition is 
evident in the declining trends in net operating profits, net sales 
volumes, production employment, and capacity utilization. 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 we have determined that 
these allegations are properly supported by adequate evidence and meet 
the statutory requirements for initiation. See the Initiation 
Checklist.

Initiation of Antidumping Investigation

    Based upon our examination of the petition on refined brown 
aluminum oxide, we have found that it meets the requirements of section 
732 of the Act. Therefore, we are initiating an antidumping duty 
investigation to determine whether imports of refined brown aluminum 
oxide from the PRC are being, or are likely to be, sold in the United 
States at less than fair value. Unless this deadline is extended 
pursuant to section 733(b)(1)(A) of the Act, 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 representatives 
of the Government of the PRC.

ITC 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 determine no later than January 6, 2003, whether there 
is a reasonable indication that imports of refined brown aluminum oxide 
from the PRC 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: December 10, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-31628 Filed 12-16-02; 8:45 am]
BILLING CODE 3510-DS-S