[Federal Register Volume 68, Number 61 (Monday, March 31, 2003)]
[Notices]
[Pages 15431-15433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7686]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-830]


Notice of Initiation of Antidumping Duty Investigation: Allura 
Red from India

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

EFFECTIVE DATE: March 31, 2003.

FOR FURTHER INFORMATION CONTACT: Scott Lindsay at (202) 482-0780, or 
Adina Teodorescu at (202) 482-4052; 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 March 4, 2003, the Department of Commerce (the Department) 
received a petition filed in proper form by Sensient Technologies 
Corporation (petitioner). See Allura Red from India: Petition for the 
Imposition of Antidumping and Countervailing Duties (Petition). The 
Department received information supplementing the petition on March 17, 
2003, and March 19, 2003. See Response to the Department's Supplemental 
Questions Regarding the Antidumping and Injury Portions of the Petition 
Regarding Allura Red from India (March 17, 2003) (AD/Injury 
Supplemental [xnum]1); Response to the Department's Supplemental 
Questions Regarding the Antidumping and Injury Portions of the Petition 
Regarding Allura Red from India (March 19, 2003) (AD/Injury 
Supplemental [xnum]2).
    In accordance with section 732(b) of the Act, petitioner alleges 
that imports of Allura Red from India 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, 
or are threatening material injury to, an industry in the United 
States.
    The Department finds that petitioner filed this petition on behalf 
of the domestic industry because it is an interested party as defined 
in section 771(9)(C) of the Act and has demonstrated sufficient 
industry support with respect to the antidumping and countervailing 
duty investigations that it is requesting the Department to initiate. 
See Determination of Industry Support for the Petition, below.

Period of Investigation

    In accordance with 19 CFR 351.204(b)(1), the anticipated period of 
investigation (POI) is January 1, 2002, through December 31, 2002.

Scope of Investigation

    This investigation covers Allura Red coloring, also known as Food, 
Drug and Cosmetic (FD&C) Red No. 40, defined as synthetic red coloring 
containing not less than 85 percent of the disodium salt of 6-hydroxy-
5-{(2-methoxy-5-methyl-4-sulfophenyl)azo{time} -2-naphthalenesulfonic 
acid, whether or not certified for human consumption at the time of 
entry into the United States. The product definition covers all forms 
and variations of Allura Red, such as powders, press cakes, extrudates, 
liquid, or granules, but excludes lake pigments formed from Allura Red. 
This investigation does not cover colors of animal, vegetable, or 
mineral origin, also known as ``natural colors.''
    Allura Red is currently classifiable in the Harmonized Tariff 
Schedule United States (HTSUS) under subheading 3204.12.5000, a basket 
category. The tariff classification is provided for convenience and 
Customs purposes. The written description of the scope of this 
proceeding is dispositive.
    As discussed in the preamble to the Department's regulations, we 
are setting aside a time period for parties to raise issues regarding 
product coverage. See Antidumping Duties; Countervailing Duties; Final 
Rule, 62 FR 27296, 27323 (May 19, 1997). The Department encourages all 
parties to submit such comments within 20 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, N.W., Washington, D.C. 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.

[[Page 15432]]

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. See section 732(c)(4)(A). 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 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.\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 Therefore 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 petition, petitioner does not offer a definition of 
domestic like product distinct from the scope of the investigation. 
Thus, based on our analysis of the information presented to the 
Department by petitioner, 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.
    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 
Antidumping Investigation Initiation Checklist: Allura Red from India, 
Industry Support section, March 24, 2003 (AD Initiation Checklist), on 
file in the Central Records Unit, Room B-099 of the main Department of 
Commerce building.
    We determine, based on information provided in the petition, that 
petitioner has demonstrated industry support representing over 50 
percent of total production of the domestic like product, consisting of 
petitioner and another U.S. producer of Allura Red, Noveon, Inc. 
Therefore, the domestic producers or workers who support the petitions 
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, 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 AD Initiation Checklist.

United States Price and Normal Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department has based its decision to 
initiate this investigation.

United States Price

    Petitioner established U.S. price based on constructed export price 
(CEP) and export price (EP). For its CEP allegations, petitioner used 
actual and estimated prices of Allura Red from an Indian producer, 
through its U.S. affiliate, to unaffiliated U.S. purchasers. In its 
March 17, 2003, and March 19, 2003, supplemental submissions, 
petitioner calculated CEP for three actual prices reflecting Free on 
Board (FOB) warehouse sales of the subject merchandise. See AD/Injury 
Supplemental [xnum]1 at 1-4 and Attachment B; AD/Injury Supplemental 
[xnum]2 at 4 and Attachment A. Petitioner also calculated CEP for 
several prices which were estimated based on the circumstances of lost 
sales known to petitioner. For each one of these prices, petitioner 
deducted movement expenses, FDA certification fees, duties, imputed 
credit, selling expenses, and inventory carrying cost. Since the actual 
sale prices are sufficient for calculating U.S. price for purposes of 
initiation, it is not necessary at this time to address whether it is 
appropriate to include margins based on estimated prices resulting from 
lost sales.
    For EP prices, petitioner calculated U.S. price based on Indian 
export statistics. Petitioners reported that the HTSUS for Allura Red 
is in a basket category. Based on our research, we requested 
clarification regarding the Indian export statistics and whether they 
are specific to Allura Red, but were unable to determine that the 
export statistics are specific to the merchandise for which petitioner 
is alleging dumping. See AD/Injury Supplemental [xnum]1 at 5; AD/Injury 
Supplemental [xnum]2 at 1-2. Further, petitioner has stated that all 
imports of the subject merchandise may have been CEP transactions, as 
it is not aware of any specific EP sales transactions. See AD/Injury 
Supplemental [xnum]2 at 2. Since questions remain with regard to the EP 
provided by petitioner and since the actual sale prices provided in the 
petition are sufficient for calculating U.S. price for purposes of 
initiation, it is not necessary at this time to address whether it is 
appropriate to include margins based on EP.

Normal Value

    With respect to normal value (NV), petitioner provided a home 
market price from a domestic price list from Roha Dyechem Pvt., Ltd., 
an Indian producer of Allura Red. To calculate the NV, petitioner 
deducted a quantity discount that is noted on the price list. In 
addition, petitioner adjusted the home

[[Page 15433]]

market price for imputed credit by deducting home market credit 
expenses. Petitioner also deducted home market indirect selling 
expenses as a CEP offset to NV. Finally, for comparison to CEP, 
petitioner converted the net home market price to U.S. dollars based on 
the average Federal Reserve exchange rate for the POI.
    We are initiating this investigation based on actual U.S. prices of 
Allura Red from India obtained by petitioners. Based on the comparison 
of actual U.S. prices to NV, the estimated dumping margins range from 
137.69 percent to 226.21 percent. To the extent necessary, we will 
consider the appropriateness of petitioner's alternative bases for 
determining U.S. price during the course of this proceeding. Should the 
need arise to use any of this information as facts available, under 
section 776 of the Act, in our preliminary or final determinations, we 
may re-examine the information and revise the margin calculations, if 
appropriate.

Fair Value Comparisons

    Based on the data provided by petitioner, there is reason to 
believe that imports of Allura Red from India are being, or are likely 
to be, sold at less than fair value. See Petition.

Allegations and Evidence of Material Injury and Causation

    Petitioner alleges that the U.S. industry producing the domestic 
like product is being materially injured, or threatened with material 
injury, by reason of imports from India of the subject merchandise sold 
at less than NV. Petitioner contends that the industry's injured 
condition is evident in the reduced levels of production and capacity 
utilization, decline in profits, decline in research and development, 
decreased U.S. market share, lost sales and revenue, and price 
suppression and depression. The allegations of injury and causation are 
supported by relevant evidence including lost sales 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 AD Initiation 
Checklist.

Initiation of Antidumping Investigation

    Based on our examination of the petition on Allura Red, and 
petitioner's responses to our requests for supplemental information 
clarifying the petition, we have found that the petition meets the 
requirements of section 732 of the Act. See AD Initiation Checklist. 
Therefore, we are initiating an antidumping duty investigation to 
determine whether imports of Allura Red from India are being, or are 
likely to be, sold in the United States at less than fair value. Unless 
the 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 India. We will attempt to provide a copy of the 
public version of the petition to each exporter named in the petition, 
as provided for under 19 CFR 351.203(c)(2).

International Trade Commission Notification

    Pursuant to section 732(d) of the Act, we have notified the ITC of 
our initiation.

Preliminary Determination by the ITC

    The ITC will determine, no later than April 18, 2003, whether there 
is a reasonable indication that imports of Allura Red from India are 
materially injuring, or threatening 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: March 24, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-7686 Filed 3-28-03; 8:45 am]
BILLING CODE 3510-DS-S