[Federal Register Volume 68, Number 18 (Tuesday, January 28, 2003)]
[Notices]
[Pages 4169-4171]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-1899]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-862]


Notice of Initiation of Antidumping Duty Investigation: High and 
Ultra-High Voltage Ceramic Station Post Insulators from Japan

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

ACTION: Initiation of Antidumping Duty Investigation.

-----------------------------------------------------------------------

EFFECTIVE DATE: January 28, 2003.

FOR FURTHER INFORMATION CONTACT: Timothy Finn or Michele Mire at (202) 
482-0065 or (202) 482-4711, respectively; Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230.

Initiation of Investigation

The Petition

    On December 31, 2002, the Department of Commerce (the Department) 
received a petition filed in proper form by Lapp Insulator Company LLC 
(Lapp), Newell Porcelain Co., Inc. (Newell), Victor Insulators, Inc. 
(Victor), and the IUE Industrial Division of the Communications Workers 
of America, the union representing employees of Lapp (collectively, 
petitioners). The Department received information supplementing the 
petition on January 14, 2003.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the Act), the petitioners allege that imports of high and 
ultra-high voltage ceramic station post insulators from Japan 
(hereinafter referred to as subject merchandise or station post 
insulators) are being, or are likely to be, sold in the United States 
at less than fair value

[[Page 4170]]

within the meaning of section 731 of the Act, and that such imports are 
materially injuring, or are threatening to materially injure, an 
industry in the United States.
    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) and 771(9)(D) of the Act and have 
demonstrated sufficient industry support with respect to the 
antidumping duty investigation that they are requesting the Department 
initiate (see the ``Determination of Industry Support for the 
Petition'' section below).

Scope of Investigation

    The scope of this investigation covers station post insulators 
manufactured of porcelain, of standard strength,\1\ high strength, or 
extra-high strength, solid core or cavity core, single unit or stacked 
unit, assembled or unassembled, and with or without hardware attached, 
rated at 115 kilovolts (kV) voltage class and above (550 kilovolt Basic 
Impulse Insulation Level (BIL) and above), including, but not limited 
to, those manufactured to meet the following American National 
Standards Institute, Inc. (ANSI) standard class specifications: T.R.-
286, T.R.-287, T.R.-288, T.R.-289, T.R.-291, T.R.-295, T.R.-304, T.R.-
308, T.R.-312, T.R.-316, T.R.-362 and T.R.-391. Subject merchandise is 
classifiable under subheading 8546.20.0060 of the Harmonized Tariff 
Schedule of the United States (HTSUS) Annotated. While the HTSUS 
subheading is provided for convenience and U.S. Customs purposes, the 
written description above remains dispositive as to the scope of the 
investigation.\2\
---------------------------------------------------------------------------

    \1\ Station post insulators are manufactured in various styles 
and sizes, and are classified primarily according to the voltage 
they are designed to withstand. Under the governing industry 
standard issued by the Institute of Electrical and Electronic 
Engineers (IEEE), the voltage spectrum is divided into three broad 
classes: ``medium'' voltage (i.e., less than or equal to 69 
kilovolts), ``high'' voltage (i.e., from 115 to 230 kilovolts), and 
``extra-high'' or ``ultra-high'' voltage (i.e., greater than 230 
kilovolts).
    \2\ HTSUS subheading 8546.20.00 includes ceramic electrical 
insulators in general. Station post insulators are classified under 
HTSUS number 8546.20.0060 which also includes non-subject 
merchandise.
---------------------------------------------------------------------------

    During our review of the petition, we sought additional information 
from the petitioners concerning the scope of the investigation. As a 
result of this supplemental information, we modified the scope language 
proposed by the petitioners with regard to the voltage class of subject 
merchandise covered. The petitioners proposed that the scope cover 
subject merchandise rated at greater than 69 kV voltage class and above 
(350 kV BIL and above). However, the petitioners noted that they do not 
manufacture station post insulators with service class ratings between 
69 kV and 115 kV. Thus, for purposes of this proceeding, we changed the 
voltage class of covered merchandise to 115 kV and above.
    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 by February 10, 2003. Comments should be addressed 
to the 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. See the Import Administration AD Investigation 
Checklist, dated January 21, 2003 (Initiation Checklist) (public 
version on file in the Central Records Unit of the Department of 
Commerce, Room B-099).

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 United States 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 domestic 
like product (see section 771(10) of the Act), they do so for different 
purposes and pursuant to their 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.\2\
---------------------------------------------------------------------------

    \3\ 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 Therefore from Japan: Final Determination; 
Rescission 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.
    In this petition, the petitioners do not offer a definition of 
domestic like product distinct from the scope of this investigation. 
Thus, based on our analysis of the information presented to the 
Department by the petitioners, we have determined that there is a 
single domestic like product, which is defined in the ``Scope of 
Investigation'' section above, and have analyzed industry support in 
terms of this domestic like product.
    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. Information contained in the petition 
demonstrates that the domestic producers or workers who support the 
petition account for over 50 percent of the total production of the 
domestic like product. Therefore, the requirements of section 
732(c)(4)(A)(i) are met. See Initiation Checklist. Furthermore, because 
the Department received no opposition to the petition, and because the 
domestic producers or workers who support the petition account for more 
than 50 percent of the domestic industry, they also 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. See Initiation Checklist. Thus, the requirements of 
section 732(c)(4)(A)(ii) are met.
    Accordingly, the Department determines that the petition was filed 
on behalf of the domestic industry within the meaning of section 
732(b)(1) of the Act. See Initiation Checklist.

[[Page 4171]]

Period of Investigation

    The anticipated period of investigation (POI) is October 1, 2001 
through September 30, 2002.

Constructed Export Price and Normal Value

    The following is a description of the allegation of sales at less 
than fair value upon which the Department has based its decision to 
initiate this investigation.
Constructed Export Price
    The petitioners identified NGK Insulators, Ltd. (NGK) and its 
wholly-owned U.S. subsidiary, Locke Insulators, Inc. (Locke), as the 
primary producer/exporter and importer of subject merchandise.\4\ The 
petitioners believe that Locke acts as a purchaser and reseller of 
subject merchandise produced by NGK; therefore, the petitioners 
calculated a constructed export price (CEP). The starting price for CEP 
is a simple average of two price quotes for NGK merchandise during the 
POI. These price quotes, which are for a particular model of subject 
merchandise, are identified in affidavits filed by representatives of 
two of the petitioning companies (Lapp and Victor) and were obtained 
from a customer and sales agent.
---------------------------------------------------------------------------

    \4\ The petitioners also identified Daito Co., Ltd., and 
Koransha Co., Ltd. as Japanese producers of station post insulators 
but stated that they were not aware of any exports of such 
merchandise by these companies to the United States.
---------------------------------------------------------------------------

    The petitioners calculated net U.S. price by deducting from the 
starting price U.S. sales commissions, inventory carrying costs, U.S. 
warehousing expenses, U.S. imputed credit expenses, foreign inland 
freight, ocean freight, U.S. customs duty and fees, U.S. inland 
freight, U.S. indirect selling expenses, and an amount for CEP profit. 
See Initiation Checklist.
Normal Value
    The starting price for normal value (NV) is a weighted-average of 
four home market price quotes that were obtained through foreign market 
research. These price quotes, which were made during the POI, are for 
subject merchandise of the same grade as that of the merchandise for 
which U.S. price quotes were obtained. The petitioners made 
circumstance of sale adjustments to NV for imputed credit expenses, as 
well as adjustments for packaging costs and inland freight expenses.
    Based upon a comparison of CEP to NV, the petitioners calculated an 
estimated dumping margin of 105.8 percent.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of subject merchandise from Japan 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 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 the imports of the subject 
merchandise sold at less than NV. The volume of imports from Japan, 
using the latest available data, exceeded the statutory threshold of 
three percent for a negligibility exclusion. See section 771(24)(A)(i) 
of the Act. The petitioners contend that the industry's injured 
condition is evidenced in the declining trends in operating profits, 
decreased U.S. market share, and price suppression and depression. The 
allegations of injury and causation are supported by relevant evidence 
including U.S. Customs import data, domestic consumption, and pricing 
information. 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.

Initiation of Antidumping Investigation

    Based on our examination of the petition on station post insulators 
from Japan, and the petitioners' response to our supplemental 
questionnaire clarifying the petition, we find that the petition meets 
the requirements of section 732 of the Act. See Initiation Checklist. 
Therefore, we are initiating an antidumping duty investigation to 
determine whether imports of station post insulators from Japan 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 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 Japan. 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 determine, no later than February 14, 2003, whether 
there is a reasonable indication that imports of subject merchandise 
from Japan 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: January 21, 2003.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 03-1899 Filed 1-27-03; 8:45 am]
BILLING CODE 3510-DS-S