[Federal Register Volume 68, Number 103 (Thursday, May 29, 2003)]
[Notices]
[Pages 32013-32016]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13453]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-557-812, A-570-884]
Notice of Initiation of Antidumping Duty Investigations: Certain
Color Television Receivers From Malaysia and the People's Republic of
China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Initiation of antidumping duty investigations.
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EFFECTIVE DATE: May 29, 2003.
FOR FURTHER INFORMATION CONTACT: Irina Itkin at (202) 482-0656, or
Michael Strollo at (202) 482-0629, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230.
Initiation of Investigations
The Petitions
On May 2, 2003, the Department of Commerce (``the Department'')
received petitions filed in proper form by Five Rivers Electronic
Innovations, LLC (``Five Rivers''), the International Brotherhood of
Electrical Workers (``IBEW''), and the Industrial Division of the
Communications Workers of America (``IUE-CWA'') (collectively ``the
petitioners'').
In accordance with section 732(b)(1) of the Tariff Act of 1930
(``the Act''), the petitioners allege that imports of color television
receivers (``CTVs'') from Malaysia and the People's Republic of China
(``the 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 imports from Malaysia and the PRC, are materially injuring, or are
threatening to materially injure, 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 sections 771(9)(C) and 771(9)(D) of the Act and they have
demonstrated sufficient industry support with respect to each of the
antidumping investigations that they are requesting the Department to
initiate. See infra, ``Determination of Industry Support for the
Petitions.''
Scope of Investigations
For purposes of these investigations, the term ``certain color
television receivers'' includes complete and incomplete direct-view or
projection-type cathode-ray tube color television receivers, with a
video display diagonal exceeding 52 centimeters, whether or not
combined with video recording or reproducing apparatus, which are
capable of receiving a broadcast television signal and producing a
video image. Specifically excluded from these investigations are
computer monitors or other video display devices that are not capable
of receiving a broadcast television signal.
The color television receivers subject to these investigations are
currently classifiable under subheadings 8528.12.2800, 8528.12.3250,
8528.12.3290, 8528.12.4000, 8528.12.5600, 8528.12.3600, 8528.12.4400,
8528.12.4800, and 8528.12.5200 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
scope of the merchandise under investigation is dispositive.
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 determinations.
Determination of Industry Support for 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)(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
[[Page 32014]]
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: (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.
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
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 USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (Ct.
Int'l Trade 2001), citing Algoma Steel Corp. Ltd. v. United States,
688 F. Supp. 639, 642-44 (Ct. Int'l Trade 1988) (``the ITC does not
look behind ITA's determination, but accepts ITA's determination as
to which merchandise is in the class of merchandise sold at LTFV'').
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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 their initial petitions and subsequent submissions, the
petitioners state that they comprise well over 50 percent of U.S. CTV
production. The petitions identify three additional U.S. companies
engaged in the production of CTVs, none of which have taken a position
on (either for or against) the petitions. Through data provided by the
petitioners and our own independent research, we have determined that
the CTV production of these three companies is not high enough to place
the petitioners' industry support in jeopardy. Based on all available
information, we agree that the petitioners comprise over 50 percent of
all domestic CTV production.
Our review of the data provided in the petition and other
information readily available to the Department indicates that the
petitioners have established industry support representing over 50
percent of total production of the domestic like product, requiring no
further action by the Department pursuant to section 732(c)(4)(D) of
the Act. In addition, the Department received no opposition to the
petitions from domestic producers of the like product. 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, the domestic producers or workers who support the
petitions 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 petitions. Thus, the
requirements of section 732(c)(4)(A)(ii) of the Act also are met.
Accordingly, the Department determines that the petitions were filed on
behalf of the domestic industry within the meaning of section 732(b)(1)
of the Act.
With regard to the definition of domestic like product, the
petitioner does not offer a definition of domestic like product
distinct from the scope of the investigations. On May 19, 2003, Funai
Electric Malaysia Sdn., Bhd., and Funai Corporation, Inc., a Malaysian
producer of the subject merchandise and importer/reseller, respectively
(collectively known as ``Funai''), challenged industry support for the
petitions, in accordance with section 732(c)(4)(E) of the Act. In
addition, on May 20, 2003, Sichuan Changhong Electric Co., Ltd. also
challenged industry support for the petitions. On May 21, 2003, the
petitioners filed their reply to both of these challenges.
Based on our analysis of the information presented by the
petitioners, we have determined that there is a single domestic like
product, CTVs, which is defined in the ``Scope of Investigations''
section above, and we have analyzed industry support in terms of this
domestic like product. For more information on our analysis and the
data upon which we relied, see Import Administration Antidumping
Investigation Initiation Checklist (``Initiation Checklist''), Industry
Support section and Appendix 1, dated May 22, 2003, on file in the
Central Records Unit of the main Department of Commerce building.
Export Price and Normal Value
The following are descriptions of the allegations of sales at less
than fair value upon which the Department based its decision to
initiate these investigations. The sources of data for the deductions
and adjustments relating to U.S. and foreign market prices, constructed
value (``CV''), and 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 determinations, we may re-examine the information
and revise the margin calculations, if appropriate.
Regarding an investigation involving a non-market economy (``NME'')
country, 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 these investigations, 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., Notice of Final Determination of Sales
at Less Than Fair Value: Silicon Carbide from the People's Republic of
China, 59 FR 22585, 22586-87 (May 2, 1994).
Malaysia
Export Price
The anticipated POI for Malaysia is April 1, 2002, through March
31, 2003.
The petitioners based export price (``EP'') on a U.S. port price
quote within the period of investigation (``POI'') for the direct sale
of 27-inch CTVs produced in Malaysia by Funai to an unaffiliated
customer in the United States. The petitioners calculated a net U.S.
price by deducting foreign inland freight. See the Initiation
Checklist.
Because the petitioners provided price quotes for actual products
and we determine that these price quotes are sufficient for initiation
purposes, we did not use the average unit values calculated from U.S.
import statistics that the petitioners provided because they are based
on a broad basket HTSUS category. To the extent necessary, we will
consider the appropriateness of the petitioners' alternative
methodology during the course of this proceeding.
[[Page 32015]]
For our complete analysis of EP, see the Initiation Checklist
Normal Value
The petitioners based normal value (``NV'') on third-country price
quotes and offers for sale by Funai because they were unable to obtain
price information for any Malaysian producer in the home market. During
the course of our initiation, we obtained information which indicated
that there is no viable home market for CTVs in Malaysia because all
Malaysian-produced CTVs are exported. See the May 16, 2003, memorandum
to the File from Irina Itkin, Elizabeth Eastwood, and Jim Nunno
entitled ``Telephone Conversation with Foreign Market Researcher.'' The
petitioners focused on Funai when seeking a price quote for NV because
this company is the largest CTV producer in Malaysia and a price quote
from this company forms the basis for U.S. price.
In selecting the third-country market, the petitioners chose Japan
because it is the largest third-country market for CTVs produced by
Funai. Moreover, the product subject to the Japan price quote is
comparable to the product exported to the United States which served as
the basis for EP. After examining this evidence, we found the
petitioners' selection of Japan as the comparison market to be
reasonable.
The petitioners made adjustments for consumption tax, movement
expenses, and third-country and U.S. credit expenses. The petitioners
based the amounts for third country and U.S. interest rates on lending
rates contained in International Financial Statistics published by the
International Monetary Fund. The petitioners converted NV into U.S.
dollars using the annual average 2002 yen/U.S. dollar exchange rate
calculated based on the exchange rates posted on the Department's Web
site. We revised the petitioners' calculation of NV to correct an error
in the consumption tax and the calculation of the average exchange
rate. See the Initiation Checklist.
Pursuant to section 773(b) of the Act, the petitioners provided
information demonstrating reasonable grounds to believe or suspect that
sales by Malaysian producers in the relevant foreign market were made
at prices below the cost of production (``COP'') and, accordingly,
requested that the Department conduct a country-wide sales-below-COP
investigation in connection with this investigation. The Statement of
Administrative Action (``SAA''), submitted to the 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. SAA, H.R. Doc. No. 103-316 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.''
Further, the SAA provides that section 773(b)(2)(A) of the Act
retains the requirement that the Department have ``reasonable grounds
to believe or suspect'' that below-cost sales have occurred before
initiating such an 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.
Pursuant to section 773(b)(3) of the Act, COP consists of the cost
of manufacturing (``COM''); selling, general, and administrative
expenses (``SG&A''); financial expenses; and packing expenses. The
petitioners stated that they were unable to obtain information
concerning Funai's actual CTV COP data. Therefore, the petitioners
calculated COM based on the costs incurred by an Indian producer of
CTVs with a production process similar to Funai's, adjusted for known
differences between costs incurred to produce CTVs in India and
Malaysia. To calculate SG&A and financial expenses, the petitioners
relied upon amounts reported in the 2002 consolidated financial
statements of Funai. The petitioners based packing costs on the Indian
producer's experience.
Based on a comparison of the Japanese market prices for CTVs to the
COP calculated in the petition, we find reasonable grounds to believe
or suspect that sales of the foreign like product were made at prices
below COP within the meaning of section 773(b)(2)(A)(i) of the Act.
Accordingly, the Department is initiating a country-wide cost
investigation relating to third-country sales to Japan. We note,
however, that if we determine that the home market (i.e., Malaysia) is
viable, our initiation of a country-wide cost investigation with
respect to sales to Japan will be rendered moot.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioners also based NV for sales in the United States on CV. The
petitioners calculated CV using the same COM, SG&A, and financial
expense figures used to compute the Japanese third-country market
costs. Consistent with 773(e)(2) of the Act, the petitioners included
in CV an amount for profit. For profit, the petitioners relied upon
amounts reported in Funai's 2002 consolidated financial statements. The
petitioners adjusted CV to make a circumstance-of-sale adjustment for
credit expenses, in accordance with the Department's statutory EP
calculation methodology. We revised the petitioners' calculation of CV
to correct an error in the average exchange rate, as noted above. For
our complete analysis of NV, see the Initiation Checklist.
The estimated dumping margin in the petition for Malaysia based on
a comparison between EP and the third-country price is 30.89 percent.
Our recalculation, as described above, resulted in a margin of 30.88
percent. The estimated price-to-CV margin in the petition is 47.76
percent. The adjusted price-to-CV comparison resulted in an estimated
dumping margin of 47.02 percent.
The PRC
Export Price
The anticipated POI for the PRC is October 1, 2002, through March
31, 2003.
The petitioners based EP on price quotes within the POI for the
sale of 27-inch curved and flat-screen CTVs produced in the PRC to an
unaffiliated customer in the United States. The petitioners calculated
net U.S. prices by deducting foreign brokerage and handling expenses,
international freight expenses, U.S. customs duties, and U.S. inland
freight expenses.
Because the petitioners provided price quotes for actual products
and we determine that these price quotes are sufficient for initiation
purposes, we did not use the average unit values calculated from U.S.
import statistics that the petitioners provided as a second basis to
estimate dumping margins. To the extent necessary, we will consider the
appropriateness of the petitioners' alternative methodology during the
course of this proceeding. For our complete analysis of EP, see the
Initiation Checklist.
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 of Sales at Less
Than Fair Value: Saccharin from the People's Republic of China, 68 FR
27530 (May 20, 2003). In accordance with section 771(18)(C) of the Act,
any determination that a foreign
[[Page 32016]]
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 an 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 reported by an Indian CTV producer, because public
information about PRC factor quantities for production of 27-inch
curved-screen and 27-inch flat-screen CTVs was not reasonably
available. The factors of production and usage amounts were derived
from the actual production records of the Indian surrogate generated
for both 27-inch curved-screen and 27-inch flat-screen CTVs during the
period October 2002 through March 2003.
Values for color picture tubes, chassis, cabinets, remote controls
with tuners, assorted components, and packing materials were based on
the actual costs incurred by the Indian CTV manufacturer relied upon
for the usage amounts discussed above. Labor was valued using the
Department's regression-based wage rate for the PRC, in accordance with
19 CFR 351.408(c)(3). Electricity was valued based upon the 2001-2002
annual report of BPL Display Devices, Ltd., a publicly traded Indian
color picture tube producer. All surrogate values that fell outside the
anticipated period of investigation, which in the PRC case is October
1, 2002, through March 31, 2003, were adjusted for inflation.
The petitioners based their calculations of factory overhead, SG&A
expenses, and profit on the average of the rates reported in the 2001-
2002 annual reports of BPL Ltd. (``BPL'') and Onida Saka (``Onida''),
Indian producers of CTVs, and the 2000-2001 annual report of Videocon
International, Ltd. (``Videocon''), a third Indian producer of CTVs. As
the annual report of Videocon was less contemporaneous with the POI
than those of BPL and Onida, we revised the calculation of factory
overhead, SG&A expenses, and profit to exclude Videocon's data.
Based on the information provided by the petitioners, we believe
that the surrogate values represent information reasonably available to
the petitioners and are acceptable for purposes of initiation of this
investigation. For our complete analysis of NV, see the Initiation
Checklist.
The estimated dumping margins in the petition for the PRC based on
a comparison of EP to NV are as follows: for 27-inch curved screen
CTVs, 50.94 percent; and for 27-inch flat screen CTVs, 80.16 percent.
However, based upon comparisons of EP to the adjusted NV, the revised
estimated dumping margins are as follows: for 27-inch curved screen
CTVs, 49.50 percent; and for 27-inch flat screen CTVs, 78.45 percent.
Fair Value Comparisons
Based on the data provided by the petitioners, there is reason to
believe that imports of CTVs from Malaysia and the PRC are being, or
are likely to be, sold at less than fair value.
Allegations and Evidence of Material Injury and Causation
With regard to both Malaysia and the PRC, 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 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 the declining trends in net operating profits, net sales
volumes, profit-to-sales ratios, production employment, and capacity
utilization. The allegations of injury and causation are supported by
relevant evidence including U.S. Bureau of Customs and Border
Protection 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 Investigations
Based upon our examination of the petitions on CTVs, 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 CTVs from Malaysia and 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 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 Malaysia and the PRC. We will
attempt to provide a copy of the public version of each petition to
each exporter named in the petitions, as provided for under 19 CFR
351.203(c)(2).
ITC 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 preliminarily determine no later than June 16, 2003,
whether there is a reasonable indication that imports of CTV's from
Malaysia and the PRC are causing material injury, or threatening to
cause material injury, to a U.S. industry. A negative ITC determination
for either 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: May 22, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-13453 Filed 5-28-03; 8:45 am]
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