[Federal Register Volume 68, Number 234 (Friday, December 5, 2003)]
[Notices]
[Pages 68032-68034]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30261]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-489-813]


Notice of Initiation of Antidumping Investigation: Certain 
Processed Hazelnuts from Turkey

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

EFFECTIVE DATE:  December 5, 2003.

FOR FURTHER INFORMATION CONTACT: John Drury at (202) 482-0195, Michael 
Ferrier at (202) 482-1394, or Abdelali Elouaradia at (202) 482-1374, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The Petition

    On October 21, 2003, the Department of Commerce (``Department'') 
received an antidumping duty petition (``Petition'') filed in proper 
form by Westnut LLC, Northwest Hazelnut Company, Hazelnut Growers of 
Oregon, Willamette Filbert Growers, Evergreen Orchards, and Evonuk 
Orchards (``Petitioners''). Petitioners are domestic producers of 
certain processed hazelnuts (``hazelnuts''). On October 28, 2003, and 
October 29, 2003 inclusive, Petitioners submitted information to 
supplement the Petition (``First Petition Amendment''). Additionally, 
on October 30, 2003, counsel for the Petitioners met with Department 
officials, at which time Department officials notified Petitioners that 
the Petition to date was insufficient. See Memorandum to the File from 
John Drury, Case Analyst: Ex-parte meeting with Counsel for 
Petitioners, dated October 31, 2003. On November 4, 2003, Petitioners 
submitted further information to supplement the Petition (``Second 
Petition Amendment''). On November 24, 2003, Petitioners submitted 
additional information to supplement their Petition at the request of 
the Department (``Third Petition Amendment''). On November 10, 2003, 
and November 26, 2003, the Istanbul Hazelnut and Hazelnut Products 
Exporters Union and the Black Sea Hazelnut and Hazelnut Products 
Exporters Union filed comments regarding industry support. On November 
28, 2003, Petitioners filed additional comments regarding industry 
support. In accordance with section 732(b) of the Tariff Act of 1930, 
as amended (``the Act''), Petitioners allege imports of certain 
processed hazelnuts from Turkey 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 
threatening material injury to, the U.S. industry.
    The Department finds that Petitioners filed their 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 investigation they are 
presently seeking. See Determination of Industry Support for the 
Petition section below.

Scope of the Investigation

    The scope of this investigation covers certain processed hazelnuts, 
including kernels, and kernels that have been roasted, blanched, 
sliced, diced, chopped, or in the following other forms: paste, meal, 
flour, croquant, and butter. In-shell hazelnuts are excluded from the 
scope of the order.
    The merchandise subject to this investigation is classified in the 
Harmonized Tariff Schedule of the United States (``HTSUS'') at 
subheadings 0802.22 and 2008.19.2000. The tariff classifications are 
provided for convenience and Customs purposes; however, the written 
description of the scope of these investigations is dispositive.
    As discussed in the preamble to the Department's regulations, we 
are setting aside a period for parties to raise issues regarding the 
scope of the investigation. See Antidumping Duties; Countervailing 
Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997). The Department 
encourages all interested 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 NW., 
Washington, DC 20230. This 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: (i) at least 25 
percent of the total production of the domestic like product; and (ii) 
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: (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

[[Page 68033]]

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 law. 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).
    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.
    Moreover, the Petitioners do not offer a definition of domestic 
like product distinct from the scope of the investigation. The Petition 
covers certain processed hazelnuts as defined in the Scope of the 
Investigation section, above, and it constitutes a single class or kind 
of merchandise. The Department has no basis on the record to find the 
Petitioners' definition of the domestic like product to be inaccurate. 
The Department, therefore, has adopted the domestic like product 
definition set forth in the Petition. See Antidumping Duty 
Investigation Initiation Checklist (``Initiation Checklist'').
    Based on the Petition data, the share of total estimated U.S. 
production of the domestic like product from October 2002 to September 
2003 represented by Petitioners and the supporting domestic producers 
equal over 25 percent of total domestic production but less than 50 
percent of production of the domestic like product produced by that 
portion of the industry expressing support for, or opposition to, the 
Petition. See Memorandum to the File from Richard O. Weible, Office 
Director, Group III, Office 8: Antidumping Duty Petition on Certain 
Processed Hazelnuts from Turkey: Extension of Deadline for Determining 
Industry Support, dated November 10, 2003. Petitioners did not meet the 
50 percent threshold with their Third Petition Amendment for industry 
support because there are other hazelnut processors in the United 
States who are not subject to the U.S. Department of Agriculture's 
federal marketing order for hazelnuts and source some or all of their 
supply of hazelnuts from imports. Therefore, in accordance with Section 
732(c)(4)(D), we polled the industry. On November 12, 2003, the 
Department sent a letter to possible hazelnut processors requesting 
U.S. production data for the period October 2002 to September 2003. 
This letter is on file in the Central Records Unit in room B-099 of the 
main Department of Commerce building and on the Import Administration 
website. For a detailed summary of the Department's efforts to identify 
relevant companies, See Memorandum to the File regarding Procedures 
Used to Determine Industry Support, dated December 1, 2003. 
Additionally, the Department published a notice in the Federal Register 
extending the twenty-day initiation and requesting production 
information from hazelnut processors in the United States (See Notice 
of Request for Information and Extension of time for Initiation: 
Antidumping Duty Petition on Certain Processed Hazelnuts from Turkey, 
(68 FR 64589) November 14, 2003.) The Department has relied upon the 
responses to this letter and follow-up phone calls to clarify certain 
responses to determine industry support. For the analysis of the data, 
See Initiation Checklist. Our analysis of the data indicates that the 
domestic producers of processed hazelnuts 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. See Initiation Checklist.
    Therefore, we find that the industry support requirements of 
section 732(c)(4)(A) of the Act have been met.

Period of Investigation

    The anticipated period of investigation (``POI'') will be October 
1, 2002 through September 30, 2003.

Export Price and Constructed Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department based its decision to 
initiate this investigation. The source or sources of data for the 
deductions and adjustments relating to U.S. and foreign market prices 
and cost of production (``COP'') and constructed value (``CV'') have 
been accorded treatment as business proprietary information. 
Petitioner's sources and methodology are discussed in greater detail in 
the business proprietary version of the Petition and in our 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 this information and revise the 
margin calculations, if appropriate.

Export Price

    In calculating the U.S. price, the Petitioner relied upon actual 
sales during the POI of Turkish processed hazelnuts to the United 
States. Petitioners provided sales invoices as support for their U.S. 
starting price. To calculate a net price, Petitioners deducted the 
Turkish export tax on processed hazelnuts and movement expenses, which 
include ocean freight, marine insurance, and brokerage. Petitioners 
calculated the export tax and the movement expenses from publically 
available data.

Constructed Value

    Petitioners attempted to locate home market and third country 
prices of processed hazelnuts and outlined their efforts in the Third 
Petition Amendment. Petitioners were unable to locate home market 
prices that occurred within the POI or prices of subject merchandise 
(i.e., shelled hazelnuts). Petitioners located prices of Turkish 
processed hazelnuts to Germany and provided information demonstrating 
reasonable grounds to believe or suspect that sales of processed 
hazelnuts in the German third county market were made at prices below 
the fully absorbed cost of production (COP), within the meaning of 
section 773(b) of the Act, and requested that the Department initiate a 
country-wide sales-below-cost investigation. See Memorandum to the File 
from Steve Williams, Import Analyst, Office of Policy: Telephone call 
with Pete Koenig regarding antidumping duty petition of Certain 
Processed Hazelnuts from Turkey, dated December 01, 2003. Therefore, 
pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
Petitioners based normal value for sales in Turkey on CV. The 
Petitioners calculated CV using the cost of manufacturing, 
depreciation, selling, general and administrative expenses, and 
interest expense figures. Consistent with section 773(e)(2) of the Act, 
the Petitioners included in CV an amount for profit. For profit, the 
Petitioners relied upon amounts reported in a publicly available 
document.

[[Page 68034]]

    Pursuant to section 773(b)(3) of the Act, COP consists of cost of 
manufacturing, selling, general and administrative expenses, and 
packing. The Petitioners calculated COM based on publicly available 
information and their own production experience, adjusted for known 
differences between costs incurred to produce processed hazelnuts in 
the United States and Turkey using publicly available data. To 
calculate SG&A and interest expense, the Petitioners were unable to 
obtain the financial statements of a Turkish hazelnut processor and 
therefore relied upon publicly available information for marketing and 
financing costs and their experience during the POI for general and 
administrative costs. Based upon a comparison of the price of the 
foreign like product in the third-country market, Germany, to the 
calculated COP of the product, we find reasonable grounds to believe or 
suspect that sales of the foreign like product were made below the 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 Germany. We note, however, that if we 
determine that the home market (i.e., Turkey) is viable, our initiation 
of a country-wide cost investigation with respect to sales to Germany 
will be rendered moot.
    Based upon the comparison of CV to EP, the Petitioners' calculated 
estimated dumping margin is 31.80 percent (See Initiation Checklist).

Fair Value Comparisons

    Based on the data provided by Petitioners, there is reason to 
believe imports of certain processed hazelnuts from Turkey are being, 
or are likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    Petitioners allege that the U.S. industry producing the domestic 
like product is being materially injured, or threatened with material 
injury, by reason of the individual and cumulated imports of the 
subject merchandise sold at less than NV.
    Petitioners contend that the industry's injured condition is 
evident in examining reduced production, shipments and net income, 
decreased employment, declining kernel prices, and lost sales and 
revenue. See Petition at pages 23-31. Petitioners assert its share of 
the market has declined from 2000 to 2002. See Petition at page 26. For 
a full discussion of the allegations and evidence of material injury, 
See Initiation Checklist at Attachment II.

Initiation of Antidumping Investigation

    Based on our examination of the Petition covering certain processed 
hazelnuts, we find it meets the requirements of section 732 of the Act. 
Therefore, we are initiating an antidumping duty investigation to 
determine whether imports of certain processed hazelnuts from Turkey 
are being, or are likely to be, sold in the United States at less than 
normal 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, or April 19, 
2004.

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 representatives of 
the government of Turkey.

International Trade Commission Notification

    The ITC will preliminarily determine on December 10, 2003, whether 
there is reasonable indication that imports of certain processed 
hazelnuts from Turkey are causing, 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.

    Date: December 1, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-30261 Filed 12-4-03; 8:45 am]
BILLING CODE 3510-DS-S