[Federal Register Volume 68, Number 244 (Friday, December 19, 2003)]
[Notices]
[Pages 70761-70764]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E3-00596]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-892, A-533-838]


Notice of Initiation of Antidumping Duty Investigations: 
Carbazole Violet Pigment 23 from India and the People's Republic of 
China

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

ACTION:  Initiation of Antidumping Duty Investigations.

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

EFFECTIVE DATE: December 19, 2003.

FOR FURTHER INFORMATION CONTACT:  David Layton at (202) 482-0371 or 
Chris Welty at (202) 482-0186, AD/CVD Enforcement Office 5, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230.

SUPPLEMENTARY INFORMATION:

INITIATION OF INVESTIGATIONS:

The Petition

    On November 21, 2003, the U.S. Department of Commerce (the 
Department) received a petition filed in proper form by Sun Chemical 
Corporation (Sun) and Nation Ford Chemical Company (collectively, the 
petitioners). The Department received supplemental information from the 
petitioners on December 4, 2003.
    In accordance with section 732(b)(1) of the Tariff Act of 1930, as 
amended (the Act), the petitioners allege that imports of carbazole 
violet pigment 23 (CVP-23) from India and the People's Republic of 
China (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 India 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 the 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 each of the antidumping 
investigations that they are requesting the Department to initiate. See 
infra, ``Determination of Industry Support for the Petition.''

Periods of Investigation

    The anticipated period of investigation (POI) for India is October 
1, 2002, through September 30, 2003, and for the PRC it is April 1, 
2003, through September 30, 2003. See section 351.204(b)(1) of the 
Department's regulations (Antidumping Duties; Countervailing Duties; 
Final Rule, 62 FR 27296, 27385 (May 19, 1997)).

Scope of Investigations

    The merchandise covered by these investigations is carbazole violet 
23 identified as Color Index No. 51319 and Chemical Abstract No. 6358-
30-1, with the chemical name of diindolo [3,2-b:3',2'-
m]triphenodioxazine, 8,18-

[[Page 70762]]

dichloro-5, 15 5,15-diethy-5,15- dihydro-, and molecular formula of 
C[bdi3][bdi4]H[bdi2][bdi2]Cl[bdi2]N[bdi4]O[bdi2].\1\ The subject 
merchandise includes the crude pigment in any form (e.g., dry powder, 
paste, wet cake) and finished pigment in the form of presscake and dry 
color. Pigment dispersions in any form (e.g. pigments dispersed in 
oleoresins, flammable solvents, water) are not included within the 
scope of the investigations.
---------------------------------------------------------------------------

    \1\ Please note that the bracketed section of the product 
description, [3,2-b:3',2'-m], is not business proprietary 
information. In this case, the brackets are simply part of the 
chemical nomenclature. See December 4, 2003, amendment to petition 
at 8.
---------------------------------------------------------------------------

    The merchandise subject to these investigations is classifiable 
under subheading 3204.17.9040 of the Harmonized Tariff Schedule of the 
United States (HTSUS). Although the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the 
merchandise under investigation is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioners to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. 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 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 satisfies 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. 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 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 U.S. 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 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\
---------------------------------------------------------------------------

    \2\ See USEC, Inc., v. United States, 132 F. Supp. 2d 1,8 (CIT 
2001), citing Algoma Steel Corp. Ltd., v. United States, 688 F. 
Supp. 639, 642-44 (CIT 1988). See also High Information Content Flat 
Panel Displays and Display Glass 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 case, the petition covers a single class or kind of 
merchandise, CVP-23, as defined in the ``Scope of Investigations'' 
section, above. The petitioners do not offer a definition of domestic 
like product distinct from the scope of the investigations. Further, 
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 consistent with the definition of the ``Scope of 
the Investigation'' section above and have analyzed industry support in 
terms of this domestic like product.
    The Department has determined 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 petition from domestic 
producers of the like product. Therefore, the domestic producers or 
workers who support the petition 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 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) of the Act 
also are met.
    Accordingly, we determine that the petition is filed on behalf of 
the domestic industry within the meaning of section 732(b)(1) of the 
Act. See Office 5 AD/CVD Enforcement, Initiation Checklist: Carbazole 
Violet Pigment 23 (CVP-23) from India and the People's Republic of 
China (December 11, 2003) (Initiation Checklist) at Attachment II, on 
file in the Central Records Unit, Room B-099 of the Department of 
Commerce.

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 home market prices 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.

[[Page 70763]]

India

Export Price
    The petitioners based export price (EP) on average unit values of 
CVP-23 imports from India for the POI. The petitioners derived such 
values from import statistics under the HTSUS subheading 3204.17.9040.
Normal Value
    With respect to normal value (NV), the petitioners provided a home 
market price for CVP-23 based on a price list obtained during the POI. 
The price was quoted in Indian rupees per kilogram on an ex-warehouse 
basis with the Central Excise and Sales Tax included. The petitioners 
adjusted this price by deducting the Central Excise and Sales Tax and 
converting the Indian value to U.S. dollars per pound using the 
exchange rates from the Department's website.
    The estimated dumping margin for subject merchandise from India, 
based on a comparison of EP and NV based on a home market price quote, 
is 147.59 percent.

PRC

Export Price
    The petitioner based EP on average unit values of CVP-23 imports 
from the PRC during the POI. The petitioner derived such values from 
import statistics under the HTSUS subheading 3204.17.9040.
Normal Value
    The petitioner alleges that the PRC is a NME country, and notes 
that in all previous investigations the Department has determined that 
the PRC is a NME. See, e.g., Notice of Final Determination in the Less 
Than Fair Value Investigation of Barium Carbonate From the People's 
Republic of China, 68 FR 46577, 46577-46578 (August 6, 2003). In 
accordance with section 771(18)(C) of the Act, any determination that a 
foreign country has at one time been considered a NME shall remain in 
effect until revoked. Therefore, the PRC will continue to be treated as 
a NME country unless and until its NME status is revoked. Pursuant to 
section 771(18)(C)(i) of the Act, because the PRC's status as a NME 
remains in effect, the petitioner determined the dumping margin using a 
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) 
at a level of economic development comparable to the PRC in terms of 
per-capita gross national income; and (3) a commercial producer of the 
subject merchandise. 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.
    With respect to NV, the petitioners calculated a NV based on the 
constructed values for crude and finished CVP-23, which were then 
weight-averaged based on the relative quantity of crude and finished 
color pigment imported during the POI. The petitioners provided 
constructed values based on Indian surrogate values and factors of 
production from the production processes of Indian and U.S. producers 
of CVP-23. Most of the Indian material inputs for the production of 
CVP-23 are taken from a schedule published by the Government of India 
and used to calculate import credits in a program called the Duty 
Entitlement Passbook Scheme. The import credits are based on the 
quantity of physical inputs used to produce crude CVP-23 and other 
products covered by the program. For those inputs not reported by the 
Indian government, the petitioners relied on their own experience in 
producing crude and finished CVP-23, and they adjusted for any known 
differences between their production process, the Indian production 
process, and the Chinese CVP-23 production process. Petitioners were 
unable to obtain publicly available prices for two material inputs, 
chloranil and para toluene sulphonyl chloride, in India or any other 
surrogate country and, therefore, submitted price quotes from Indian 
suppliers. We determined these prices were sufficient for initiation 
purposes.
    Where applicable, the petitioners adjusted values to be exclusive 
of excise and sales taxes. Indian values were converted to U.S. dollars 
using the exchange rates from the Department's website. Where surrogate 
values were not contemporaneous with the POI, the petitioners adjusted 
such values using wholesale price indices for all commodities from 
India.
    For selling, general and administrative expenses, profit and 
packaging, the petitioners relied upon amounts reported in the 2001-
2002 financial reports of Pidilite Industries Ltd., which according to 
its website is the largest producer of CVP-23 in India.
    The estimated dumping margin for the PRC, based on a comparison of 
EP and NV based on a weight-averaged constructed value, is 370.06 
percent.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of CVP-23 from India and the PRC are being, or are 
likely to be, sold 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 cumulated imports from India and 
the PRC 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, domestic prices, revenue, profit-to-sales ratios, production 
employment, capacity utilization, and domestic market share. The 
allegations of injury and causation are supported by relevant evidence 
including U.S. import data, lost sales, and pricing information.
    The Department has assessed the allegations and supporting evidence 
regarding material injury and causation and 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 petition, we have found that it 
meets the requirements of section 732 of the Act. See the Initiation 
Checklist. Therefore, we are initiating antidumping duty investigations 
to determine whether imports of CVP-23 from India 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, we will make our preliminary 
determinations no later than 140 days after the date of these 
initiations.

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 governments of India and the PRC. 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).

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 determine no later than January 5, 2004, whether there 
is a reasonable indication that imports of

[[Page 70764]]

CVP-23 from India and the PRC are causing material injury, or 
threatening to cause material injury, to a U.S. industry. A negative 
ITC determination for any 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: December 11, 2003.
James Jochum,
Assistant Secretary for Import Administration.
[FR Doc. E3-00596 Filed 12-18-03; 8:45 am]
BILLING CODE 3510-DS-S