[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]
BILLING CODE 3510-DS-P