[Federal Register Volume 69, Number 76 (Tuesday, April 20, 2004)]
[Notices]
[Pages 21082-21086]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8938]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-533-841, A-560-817,A-583-840, A-549-823]
Notice of Initiation of Antidumping Duty Investigations:Bottle-
Grade Polyethylene Terephthalate (PET) Resin from India,Indonesia,
Taiwan, and Thailand
AGENCY: Import Administration, International TradeAdministration,
Department of Commerce.
ACTION: Initiation of Antidumping DutyInvestigations.
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EFFECTIVE DATE: April 20, 2004.
FOR FURTHER INFORMATION CONTACT: Charles Riggle at (202) 482-0650 or
Amber Musser at (202) 482-1777, AD/CVD Enforcement Office 5, Group II,
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 March 24, 2004, the U.S. Department of Commerce (the Department)
received a petition filed in proper form by the United States PET Resin
Producers Coalition (the petitioner). The Department received
supplemental information from the petitioner on April 5, 2004.
In accordance with section 732(b)(1) of the Tariff Act of 1930, as
amended (the Act), the petitioner alleges that imports of polyethylene
terephthalate resin (bottle-grade PET resin) from India, Indonesia,
Taiwan, and Thailand 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, Indonesia, Taiwan, and Thailand are
materially injuring, or are threatening to materially injure, an
industry in the United States.
The Department finds that the petitioner filed the petition on
behalf of the domestic industry because it is an interested party as
defined in section 771(9)(C) of the Act and it has demonstrated
sufficient industry support with respect to each of the antidumping
investigations that it is requesting the Department to initiate. See
infra, ``Determination of Industry Support for the Petition.''
Periods of Investigation
The anticipated period of investigation (POI) for these
[[Page 21083]]
investigations is January 1, 2003, through December 31, 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 each of these investigations is bottle-
grade polyethylene terephthalate (PET) resin, defined as having an
intrinsic viscosity of at least 0.68 deciliters per gram but not more
than 0.86 deciliters per gram. The scope includes bottle-grade PET
resin that contains various additives introduced in the manufacturing
process. The scope does not include post-consumer recycle (PCR) or
post-industrial recycle (PIR) PET resin; however, included in the scope
is any bottle-grade PET resin blend of virgin PET bottle-grade resin
and recycled PET (RPET). Waste and scrap PET is outside the scope of
the investigations. Fiber-grade PET resin, which has an intrinsic
viscosity of less than 0.68 deciliters per gram, is also outside the
scope of the investigations.
The merchandise subject to these investigations is properly
classified under subheading 3907.60.0010 of the Harmonized Tariff
Schedule of the United States (HTSUS); however, merchandise classified
under HTSUS subheading 3907.60.0050 that otherwise meets the written
description of the scope is also subject to these investigations.
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
petitioner 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 investigations, 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 law.\1\
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\1\ 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).
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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 case, the petition covers a single class or kind of
merchandise, bottle-grade PET resin, as defined in the ``Scope of
Investigations'' section above. The petitioner does 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 petitioner, we have determined that
there is a single domestic like product, which is consistent with the
definition of the ``Scope of the Investigations'' section above, and
have analyzed industry support in terms of this domestic like product.
The Department has determined that the petitioner has established
industry support representing over 50 percent of total production of
the domestic like product. See Antidumping Duty Initiation Checklist:
Bottle-Grade Polyethylene Terephthalate (PET) Resin from India,
Indonesia, Taiwan, and Thailand (Initiation Checklist) (April 13,
2004), on file in the Central Records Unit, Room B-099 of the
Department of Commerce. Thus, no polling of the domestic industry by
the Department pursuant to section 732(c)(4)(D) of the Act is required.
In addition, the Department received no opposition to the petition from
domestic producers of the like product. Therefore, the petitioner and
domestic producers 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 petitioner and domestic producers 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 Initiation Checklist at Attachment II.
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.
[[Page 21084]]
The sources of data for the deductions and adjustments relating to
U.S. and home market prices, and constructed value (CV), are discussed
in greater detail in the Initiation Checklist. The petitioner stated it
was unable to obtain information regarding specific sales or offers for
sale of subject merchandise in Indonesia, Taiwan, and Thailand or in
any third country. Therefore for these three countries, the petitioner
based normal value (NV) on CV. See Petition at 17-18. 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.
India
Export Price
The petitioner based export price (EP) on average unit values
(AUVs) of bottle-grade PET resin imports from India for the POI. The
petitioner derived such values from import statistics under the HTSUS
subheading 3907.60.0010. The petitioner did not make any adjustments to
the AUVs.
Normal Value
With respect to NV, the petitioner calculated an average home
market price for bottle-grade PET resin based on information obtained
from Reliance Industries' website. Reliance Industries' price
information was considered a reasonable surrogate for all Indian
producers as it is India's largest bottle-grade PET resin producer.
The petitioner calculated NV using a home market price quoted in
Indian Rupees per kilogram and converted to U.S. cents per pound. NV
was adjusted for export packing costs based on the assumption that
export shipments to the United States were made in bulk containers. NV
was not adjusted for home market packing costs, as it was assumed that
home market shipments were made in bulk in an unpacked condition. In
addition, NV was not adjusted for home market freight costs, as it was
assumed that the published selling prices on Reliance Industries web
page are ex-factory. See Initiation Checklist for details.
The estimated dumping margin for subject merchandise from India,
based on a comparison of EP and NV based on the average home market
price described above, is 35.51 percent.
Indonesia
Export Price
The petitioner based EP on AUVs of bottle-grade PET resin imports
from Indonesia for the POI. The petitioner derived such values from
import statistics under the HTSUS subheading 3907.60.0010. The
petitioner did not make any adjustments to the AUVs.
Normal Value
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioner based NV for sales in Indonesia on CV. The petitioner
calculated CV using the same cost of manufacture (COM), selling,
general and administrative (SG&A) and interest expense figures used to
compute the cost of production (COP).
According to section 773(b)(3) of the Act, COP consists of COM,
SG&A expenses, financial expenses, and packing expenses. The petitioner
calculated COM based on its own production experience, adjusted for
known differences between costs incurred to produce bottle-grade PET
resin in the United States and Indonesia using publicly available data.
To calculate SG&A and interest, the petitioner relied upon amounts
reported by an Indonesian PET resin producer in its 2001 financial
statements, which were the most recent available. The petitioner did
not include packing costs, as it was assumed that most home market
shipments are made in bulk in an unpacked condition.
Consistent with section 773(e)(2) of the Act, the petitioner
included in CV an amount for profit. For profit, the petitioner relied
upon amounts reported by the same Indonesian bottle-grade PET resin
producer in its 2001 financial statements. In addition, the petitioner
added export packing costs to CV.
The estimated dumping margin for subject merchandise from
Indonesia, based on a comparison of EP and NV based on CV, is 27.61
percent.
Taiwan
Export Price
The petitioner based EP on AUVs of bottle-grade PET resin imports
from Taiwan for the POI. The petitioner derived such values from import
statistics under the HTSUS subheading 3907.60.0010. The petitioner did
not make any adjustments to the AUVs.
Normal Value
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioner based NV for sales in Taiwan on CV. The petitioner
calculated CV using the same COM, SG&A and interest expense figures
used to compute the COP.
According to section 773(b)(3) of the Act, COP consists of COM,
SG&A expenses, financial expenses, and packing expenses. The petitioner
calculated COM based on its own production experience, adjusted for
known differences between costs incurred to produce bottle-grade PET
resin in the United States and Taiwan using publicly available data. To
calculate SG&A and interest, the petitioner relied upon amounts
reported by a Taiwanese PET resin producer in its 2002 financial
statements. The petitioner did not include packing costs, as it was
assumed that most home market shipments are made in bulk in an unpacked
condition.
Consistent with section 773(e)(2) of the Act, the petitioner
included in CV an amount for profit. For profit, the petitioner relied
upon amounts reported by the same Taiwanese PET resin producer in its
2002 financial statements. In addition, the petitioner added export
packing costs to CV.
The estimated dumping margin for subject merchandise from Taiwan,
based on a comparison of EP and NV based on CV, is 37.35 percent.
Thailand
Export Price
The petitioner based EP on AUVs of bottle-grade PET resin imports
from Thailand for the POI. The petitioner derived such values from
import statistics under the HTSUS subheading 3907.60.0010. The
petitioner did not make any adjustments to the AUVs.
Normal Value
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioner based NV for sales in Thailand on CV. The petitioner
calculated CV using the same COM, SG&A and interest expense figures
used to compute the COP.
According to section 773(b)(3) of the Act, COP consists of COM,
SG&A expenses, financial expenses, and packing expenses. The petitioner
calculated COM based on its own production experience, adjusted for
known differences between costs incurred to produce bottle-grade PET
resin in the United States and Thailand using publicly available data.
To calculate SG&A and interest, the petitioner relied upon amounts
reported in an Indian PET resin producer's 2003 financial statements.
We revised the petitioner's SG&A and financial expense rates
calculation by using average SG&A and financial expense rates from the
financial statements for two companies located in Thailand which are
involved in industry sectors comparable to the bottle-grade PET resin
industry. The SG&A and financial expense ratios were based on the
financial statements of these two companies that were provided
[[Page 21085]]
by the petitioner as an alternative to using the Indian company's
financial statements. The petitioner did not include packing costs, as
it was assumed that most home market shipments are made in bulk in an
unpacked condition. See Initiation Checklist at Attachment V for
details.
Consistent with section 773(e)(2) of the Act, the petitioner
included in CV an amount for profit. For profit, the petitioner relied
upon amounts reported in an Indian PET resin producer's 2003 financial
statements. We revised the petitioner's CV profit rate calculation by
using an average profit rate from the financial statements of two
companies located in Thailand which are involved in industry sectors
comparable to the bottle-grade PET resin industry. The financial
statements of the two Thai companies were provided by the petitioner as
an alternative to using the Indian company's financial statements. In
addition, the petitioner added export packing costs to CV. See
Initiation Checklist at Attachment V for details.
The estimated dumping margin for subject merchandise from Thailand,
based on a comparison of EP and NV based on CV, is 41.28 percent.
Fair Value Comparisons
Based on the data provided by the petitioner, there is reason to
believe that imports of bottle-grade PET resin from India, Indonesia,
Taiwan, and Thailand are being, or are likely to be, sold at less than
fair value.
Critical Circumstances
In its submission, the petitioner claims that, following the
initiation of this case, there is a reasonable basis to believe or
suspect that critical circumstances will exist with regard to imports
of bottle-grade PET resin from India, Indonesia, Taiwan, and Thailand.
Section 733(e)(1) of the Act states that, if a petitioner alleges
critical circumstances, the Department will find that such
circumstances exist, at any time after the date of initiation, when
there is a reasonable basis to believe or suspect that, under
subparagraph (A)(i), there is a history of dumping and material injury
by reason of dumped imports in the United States or elsewhere of the
subject merchandise, or (ii) the person by whom, or for whose account,
the merchandise was imported knew or should have known that the
exporter was selling the subject merchandise at less than its fair
value and that there was likely to be material injury by reason of such
sales, and, under subparagraph (B), there have been massive imports of
the subject merchandise over a relatively short period. Section
351.206(h) of the Department's regulations defines ``massive imports''
as imports that have increased by at least 15 percent over the imports
during an immediately preceding period of comparable duration. Section
351.206(i) of the regulations states that ``relatively short period''
will normally be defined as the period beginning on the date the
proceeding begins and ending at least three months later. To date, the
petitioner has not demonstrated that the requirement of ``massive
imports . . . over a relatively short period'' has been met.
The petitioner alleges that importers knew, or should have known,
that bottle-grade PET resin was being sold at less than its fair value.
Specifically, the petitioner alleges margins, as adjusted by the
Department, of between 27.61 and 41.28 percent, a level high enough to
impute importer knowledge that merchandise was being sold at less than
its fair value. Additionally, the petitioner references the European
Council Regulation (EC) No. 2604/2000 of 27 November 2000, which
imposes a definitive antidumping duty and collects definitively the
provisional duty imposed on imports of bottle-grade PET resin from
India, Indonesia, Malaysia, the Republic of Korea, Taiwan, and
Thailand, to establish a history of dumping.
The petitioner requests that, pursuant to section 732(e) of the
Act, the Department request U.S. Customs and Border Protection (CBP) to
compile information on an expedited basis regarding entries of subject
merchandise. We note that section 732(e) of the Act states that when
there is a reasonable basis to believe or suspect (1) there is a
history of dumping in the United States or elsewhere of the subject
merchandise, or (2) the person by whom, or for whose account, the
merchandise was imported knew, or should have known, that the exporter
was selling the subject merchandise at less than its fair value, the
Department may request the Commissioner of Customs to compile
information on an expedited basis regarding entries of the subject
merchandise.
As noted above, the petitioner has not met the criteria for a
finding of critical circumstances. Therefore, at this time, we have no
reasonable basis to believe or suspect that critical circumstances
exist. However, the petitioner can resubmit its request for a finding
of critical circumstances and, if the criteria for such a finding are
met, we will issue a critical circumstances finding at the earliest
possible date. See Policy Bulletin 98/4, 63 FR 55364 (October 15, 1998)
(determination of critical circumstances may be made any time after
initiation). In addition, we are considering the petitioner's request
to obtain information from CBP for monitoring purposes, and will inform
interested parties of our determination as soon as practicable.
Allegations and Evidence of Material Injury and Causation
The petitioner alleges 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,
Indonesia, Taiwan, and Thailand of the subject merchandise sold at less
than NV.
The petitioner contends that the industry's injured condition is
evident in lost sales and customers, in the declining trends in prices,
profits, and domestic market share, and in its reduced ability to
reinvest and pursue research and development activities. The
allegations of injury and causation are supported by relevant evidence
including U.S. import data, affidavits supporting claims of lost sales
and declining revenues, and pricing information. The petitioner also
alleges the imminent threat of further material injury based on the
likely increases in foreign production volume of bottle-grade PET
resin, the likelihood of substantially increased imports, and the
prices of these imports having the likely effect of depressing or
suppressing domestic prices.
The Department has assessed the allegations and supporting evidence
regarding material injury, causation, and threat of material injury,
and has determined that these allegations are properly supported by
accurate and adequate evidence and meet the statutory requirements for
initiation. See the Initiation Checklist at Attachment IV.
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 bottle-grade PET resin from India,
Indonesia, Taiwan, and Thailand 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.
[[Page 21086]]
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, Indonesia, Taiwan, and Thailand. 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 May 10, 2004, whether there is
a reasonable indication that imports of bottle-grade PET resin from
India, Indonesia, Taiwan, and Thailand 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: April 13, 2004.
Jeffrey May,
Acting Assistant Secretary for Import Administration.
[FR Doc. 04-8938 Filed 4-19-04; 8:45 am]
BILLING CODE 3510-DS-S