[Federal Register Volume 71, Number 139 (Thursday, July 20, 2006)]
[Notices]
[Pages 41201-41205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-11547]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-905]


Initiation of Antidumping Duty Investigation: Certain Polyester 
Staple Fiber from the People's Republic of China

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

EFFECTIVE DATE: July 20, 2006.

FOR FURTHER INFORMATION CONTACT: Alex Villanueva, AD/CVD Operations, 
Office 9, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-3208.

SUPPLEMENTARY INFORMATION:

Initiation of Investigation

The Petition

    On June 23, 2006, the Department of Commerce (``Department'') 
received a petition on imports of certain polyester staple fiber (PSF) 
from the People's Republic of China (``PRC'') filed in proper form by 
Dak Americas LLC., Nan Ya Plastics Corporation America, and Wellman, 
Inc. (``Petitioners''). The period of investigation (``POI'') is 
October 1, 2005, through March 31, 2006.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (``the Act''), Petitioners alleged that imports of certain 
polyester staple fiber from the PRC 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 
and threaten to injure an industry in the United States. The Department 
issued supplemental questions to Petitioners on June 28, 2006, and 
Petitioners filed their response on July 3, 2006.

[[Page 41202]]

Scope of Investigation

    The merchandise subject to this proceeding is synthetic staple 
fibers, not carded, combed or otherwise processed for spinning, of 
polyesters measuring 3.3 decitex (3 denier, inclusive) or more in 
diameter. This merchandise is cut to lengths varying from one inch (25 
mm) to five inches (127 mm). The subject merchandise may be coated, 
usually with a silicon or other finish, or not coated. PSF is generally 
used as stuffing in sleeping bags, mattresses, ski jackets, comforters, 
cushions, pillows, and furniture.
    The following products are excluded from the scope: (1) PSF of less 
than 3.3 decitex (less than 3 denier) currently classifiable in the 
Harmonized Tariff Schedule of the United States (``HTSUS'') at 
subheading 5503.20.0025 and known to the industry as PSF for spinning 
and generally used in woven and knit applications to produce textile 
and apparel products; (2) PSF of 10 to 18 denier that are cut to 
lengths of 6 to 8 inches and that are generally used in the manufacture 
of carpeting; and (3) low-melt PSF defined as a bi-component fiber with 
an outer, non-polyester sheath that melts at a significantly lower 
temperature than its inner polyester core (classified at HTSUS 
5503.20.0015).
    Certain PSF is classifiable under the HTSUS subheadings 
5503.20.0045 and 5503.20.0065. Although the HTSUS subheadings are 
provided for convenience and customs purposes, the written description 
of the merchandise under the orders is dispositive.

Comments on Scope of Investigation

    During our review of the petition, we discussed the scope with 
Petitioners to ensure that it accurately reflects the product for which 
the domestic industry is seeking relief. Moreover, as discussed in the 
preamble to the Department's regulations, we are setting aside a period 
for interested parties to raise issues regarding product coverage. 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 calendar days of publication of this 
initiation notice. Comments should be addressed to Import 
Administration's Central Records Unit in Room 1870, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230 
- Attention: Alex Villanueva, Room 4003. The period of scope 
consultations is intended to provide the Department with ample 
opportunity to consider all comments and consult with interested 
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 by 
an interested party described in subparagraph (C), (D), (E), (F) or 
(G), or on behalf of the domestic industry. In order to determine 
whether a petition has been filed by or on behalf of the industry, the 
Department, pursuant to section 732(c)(4)(A) of the Act, determines 
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 as a whole 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 law. 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, 644 (1988), aff'd 865 F.2d 240 (Fed. Cir. 
1989), cert. denied 492 U.S. 919 (1989).
    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).
    With regard to the domestic like product, the Petitioners do not 
offer a definition of domestic like product distinct from the scope of 
the investigation. Based on our analysis of the information submitted 
on the record, we have determined that certain polyester staple fiber 
constitutes a single domestic like product and we have analyzed 
industry support in terms of that domestic like product. For a 
discussion of the domestic like product analysis in this case, see the 
Antidumping Investigation Initiation Checklist: Certain Polyester 
Staple Fiber from the People's Republic of China (``PRC''), Industry 
Support at Attachment I (Initiation Checklist), on file in the Central 
Records Unit, Room B-099 of the main Department of Commerce building.
    Our review of the data provided in the petition, supplemental 
submissions, and other information readily available to the Department 
indicates that Petitioners have established industry support 
representing at least 25 percent of the total production of the 
domestic like product, and 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, requiring no 
further action by the Department pursuant to section 732(c)(4)(D) of 
the Act. 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 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, the Department determines that the petition was filed on 
behalf of the domestic industry within the meaning of section 732(b)(1) 
of the Act. See Initiation Checklist at Attachment I (Industry 
Support).

[[Page 41203]]

    The Department finds that Petitioners filed the petition on behalf 
of the domestic industry because they are an interested party as 
defined in sections 771(9)(E) and (F) of the Act and they have 
demonstrated sufficient industry support with respect to the 
antidumping investigation that they are requesting the Department 
initiate. See Initiation Checklist at Attachment I (Industry Support).

Export Price

    Petitioners relied on two U.S. prices for certain polyester staple 
fiber manufactured in the PRC and offered for sale in the United 
States. The prices quoted were for a specific grade and quality of PSF 
falling within the scope of this petition, for delivery to the U.S. 
customer within the POI. Petitioners deducted from the prices the costs 
associated with exporting and delivering the product, including U.S. 
inland freight, ocean freight and insurance charges, U.S. duty, port 
and wharfage fees, foreign inland freight costs, and foreign brokerage 
and handling. Petitioners also calculated a margin based on the 
weighted average unit value data for the POI of imports from the PRC 
under HTSUS numbers 5503.20.0045 and 5503.20.0065. Petitioners deducted 
charges and expenses associated with exporting and delivering the 
product to the customer in the United States from the CIF price, which 
included ocean freight and insurance charges, foreign inland freight 
costs, and foreign brokerage and handling.

Normal Value

    Petitioners stated that the PRC is a non-market economy (``NME'') 
and no determination to the contrary has yet been made by the 
Department. In previous investigations, the Department has determined 
that the PRC is a NME. See Notice of Final Determination of Sales at 
Less Than Fair Value: Magnesium Metal from the People's Republic of 
China, 70 FR 9037 (February 24, 2005), Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Tissue Paper Products from the 
People's Republic of China, 70 FR 7475 (February 14, 2005), and Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Frozen 
and Canned Warmwater Shrimp from the People's Republic of China, 69 FR 
70997 (December 8, 2004). In accordance with section 771(18)(C)(i) of 
the Act, the presumption of NME status remains in effect until revoked 
by the Department. The presumption of NME status for the PRC has not 
been revoked by the Department and remains in effect for purposes of 
the initiation of this investigation. Accordingly, the normal value 
(``NV'') of the product is appropriately based on factors of production 
valued in a surrogate market economy country in accordance with section 
773(c) of the Act. In the course of this investigation, all parties 
will have the opportunity to provide relevant information related to 
the issues of the PRC's NME status and the granting of separate rates 
to individual exporters.
    Petitioners selected India as the surrogate country. Petitioners 
argued that, pursuant to section 773(c)(4) of the Act, India is an 
appropriate surrogate because it is a market-economy country that is at 
a comparable level of economic development to the PRC and is a 
significant producer and exporter of polyester staple fiber. Based on 
the information provided by Petitioners, we believe that its use of 
India as a surrogate country is appropriate for purposes of initiating 
this investigation. After the initiation of the investigation, we will 
solicit comments regarding surrogate country selection. Also, pursuant 
to 19 CFR 351.301(c)(3)(i), interested parties will be provided an 
opportunity to submit publicly available information to value factors 
of production within 40 days after the date of publication of the 
preliminary determination. Petitioners provided three dumping margin 
calculations using the Department's NME methodology as required by 19 
CFR 351.202(b)(7)(i)(C) and 19 CFR 351.408. Petitioners calculated 
normal values based on consumption rates for producing polyester staple 
fiber experienced by U.S. producers. In accordance with section 
773(c)(4) of the Act, Petitioners valued factors of production, where 
possible, on reasonably available, public surrogate country data. To 
value certain factors of production, Petitioners used official Indian 
government import statistics, excluding those values from countries 
previously determined by the Department to be NME countries and 
excluding imports into India from Indonesia, the Republic of Korea and 
Thailand, because the Department has previously excluded prices from 
these countries because they maintain broadly-available, non-industry 
specific export subsidies. See Automotive Replacement Glass Windshields 
From the People's Republic of China: Final Results of Administrative 
Review, 69 FR 61790 (October 21, 2004), and accompanying Issues and 
Decision Memorandum at Comment 5.
    For inputs valued in Indian rupees and not contemporaneous with the 
POI, Petitioners used information from the wholesale price indices 
(``WPI'') in India as published by the Reserve Bank of India (RBI) for 
input prices during the period preceding the POI. In addition, 
Petitioners made currency conversions, where necessary, based on the 
average rupee/U.S. dollar exchange rate for the POI, as reported on the 
Department's website.
    For the normal value calculations, Petitioners derived the figures 
for factory overhead, selling, general and administrative expenses 
(``SG&A''), and profit from the financial ratios of an Indian producer 
of certain PSF, Reliance Industries Limited.

Fair Value Comparisons

    Based on the data provided by Petitioners, there is reason to 
believe that imports of certain polyester staple fiber from the PRC are 
being, or are likely to be, sold in the United States at less than fair 
value. Based upon comparisons of export price to the NV, calculated in 
accordance with section 773(c) of the Act, the estimated calculated 
dumping margins for certain polyester staple fiber from the PRC range 
from 87.43 percent to 108.98 percent.

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 is 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 illustrated by the decline in 
customer base, market share, domestic shipments, prices and financial 
performance. 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 Initiation Checklist at 
Attachment II (Injury).

Separate Rates and Quantity and Value Questionnaire

    The Department recently modified the process by which exporters and 
producers may obtain separate-rate status in NME investigations. See 
Policy Bulletin 05.1: Separate-Rates Practice and Application of 
Combination Rates in Antidumping Investigations involving Non-Market 
Economy Countries (Separate Rates and Combination Rates Bulletin), 
(April 5, 2005), available on the Department's

[[Page 41204]]

Website at http://ia.ita.doc.gov. The process requires the submission 
of a separate-rate status application. Based on our experience in 
processing the separate rates applications in the antidumping duty 
investigations of Certain Artist Canvas from the People's Republic of 
China and Diamond Sawblades and Parts Thereof from the People's 
Republic of China and the Republic of Korea, we have modified the 
application for this investigation to make it more administrable and 
easier for applicants to complete. See Initiation of Antidumping Duty 
Investigations: Certain Lined Paper Products from India, Indonesia, and 
the People's Republic of China, 70 FR 58374, 58379 (October 6, 2005), 
Initiation of Antidumping Duty Investigation: Certain Artist Canvas 
From the People's Republic of China, 70 FR 21996, 21999 (April 28, 
2005) and Initiation of Antidumping Duty Investigations: Diamond 
Sawblades and Parts Thereof from the People's Republic of China and the 
Republic of Korea, 70 FR 35625, 35629 (June 21, 2005). The specific 
requirements for submitting the separate-rates application in this 
investigation are outlined in detail in the application itself, which 
will be available on the Department's Website at http://ia.ita.doc.gov/ia-highlights-and-news.html on the date of publication of this 
initiation notice in the Federal Register. The separate rates 
application is due no later than September 19, 2006.

NME Respondent Selection and Quantity and Value Questionnaire

    For NME investigations, it is the Department's practice to request 
quantity and value information from all known exporters identified in 
the petition. In addition, the Department typically requests the 
assistance of the NME government in transmitting the Department's 
quantity and value questionnaire to all companies who manufacture and 
export subject merchandise to the United States, as well as to 
manufacturers who produce the subject merchandise for companies who 
were engaged in exporting subject merchandise to the United States 
during the period of investigation. The quantity and value data 
received from NME exporters is used as the basis to select the 
mandatory respondents. Although many NME exporters respond to the 
quantity and value information request, at times some exporters may not 
have received the quantity and value questionnaire or may not have 
received it in time to respond by the specified deadline.
    The Department requires that the respondents submit a response to 
both the quantity and value questionnaire and the separate-rates 
application by the respective deadlines in order to receive 
consideration for separate-rate status. This procedure will be applied 
to this and all future investigations. See Certain Artist Canvas from 
the People's Republic of China, 70 FR at 21999, Diamond Sawblades and 
Parts Thereof from the People's Republic of China and the Republic of 
Korea, 70 FR at 35629, Initiation of Antidumping Duty Investigation: 
Certain Activated Carbon from the People's Republic of China, 71 FR 
16757, 16760 (April 4, 2006). Appendix I of this notice contains the 
quantity and value questionnaire that must be submitted by all NME 
exporters no later than August 18, 2006. In addition, the Department 
will post the quantity and value questionnaire along with the filing 
instructions on the IA Website: http://ia.ita.doc.gov/ia-highlights-and-news.html. The Department will send the quantity and value 
questionnaire to those exporters identified in Exhibit General-4 of the 
petition and the NME government.

Use of Combination Rates in an NME Investigation

    The Department will calculate combination rates for certain 
respondents that are eligible for a separate rate in this 
investigation. The Separate Rates and Combination Rates Bulletin, 
states:
    {w{time} hile continuing the practice of assigning separate rates 
only to exporters, all separate rates that the Department will now 
assign in its NME investigations will be specific to those producers 
that supplied the exporter during the period of investigation. Note, 
however, that one rate is calculated for the exporter and all of the 
producers which supplied subject merchandise to it during the period of 
investigation. This practice applies both to mandatory respondents 
receiving an individually calculated separate rate as well as the pool 
of non-investigated firms receiving the weighted-average of the 
individually calculated rates. This practice is referred to as the 
application of ``combination rates'' because such rates apply to 
specific combinations of exporters and one or more producers. The cash-
deposit rate assigned to an exporter will apply only to merchandise 
both exported by the firm in question and produced by a firm that 
supplied the exporter during the period of investigation.
Separate Rates and Combination Rates Bulletin, at page 6.

Initiation of Antidumping Investigation

    Based upon our examination of the petition on certain polyester 
staple fiber from the PRC, we find that this petition meets the 
requirements of section 732 of the Act. Therefore, we are initiating an 
antidumping duty investigation to determine whether imports of certain 
polyester staple fiber from the PRC are being, or are likely to be, 
sold in the United States at less than fair value. Unless postponed, 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 government of 
the PRC.

International Trade Commission Notification

    We have notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determination by the ITC

    The ITC will preliminarily determine, within 25 days after the date 
on which it receives notice of this initiation, whether there is a 
reasonable indication that imports of certain polyester staple fiber 
from the PRC are causing material injury, or threatening to cause 
material injury, to a U.S. industry. See section 733(a)(2)(A)(i) of the 
Act. 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.

    Dated: July 13, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.

APPENDIX I

Where it is not practicable to examine all known producers/exporters of 
subject merchandise, section 777A(c)(2) of the Tariff Act of 1930 (as 
amended) permits us to investigate (1) a sample of exporters, 
producers, or types of products that is statistically valid based on 
the information available at the time of selection, or (2) exporters 
and producers accounting for the largest volume and value of the 
subject merchandise that can reasonably be examined.

[[Page 41205]]

In the chart below, please provide the total quantity and total value 
of all your sales of merchandise covered by the scope of this 
investigation (see scope section of this notice), produced in the PRC, 
and exported/shipped to the United States during the period October 1, 
2005, through March 31, 2006.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                            Market                                     Total Quantity                 Terms of Sale                  Total Value
--------------------------------------------------------------------------------------------------------------------------------------------------------
United States.................................................
 
1. Export Price Sales.........................................
2.............................................................
         a. Exporter name.....................................
         b. Address...........................................
         c. Contact...........................................
         d. Phone No..........................................
         e. Fax No............................................
3. Constructed Export Price Sales.............................
4. Further Manufactured.......................................
Total Sales...................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

Total Quantity:

 Please report quantity on a metric ton basis. If any 
conversions were used, please provide the conversion formula and 
source.

Terms of Sales:

 Please report all sales on the same terms (e.g., free on 
board).

Total Value:

 All sales values should be reported in U.S. dollars. Please 
indicate any exchange rates used and their respective dates and 
sources.

Export Price Sales:

 Generally, a U.S. sale is classified as an export price sale 
when the first sale to an unaffiliated person occurs before importation 
into the United States.
 Please include any sales exported by your company directly to 
the United States.
 Please include any sales exported by your company to a third-
country market economy reseller where you had knowledge that the 
merchandise was destined to be resold to the United States.
 If you are a producer of subject merchandise, please include 
any sales manufactured by your company that were subsequently exported 
by an affiliated exporter to the United States.
 Please do not include any sales of merchandise manufactured in 
Hong Kong in your figures.

Constructed Export Price Sales:

Generally, a U.S. sales is classified as a constructed export price 
sale when the first sale to an unaffiliated person occurs after 
importation. However, if the first sale to the unaffiliated person is 
made by a person in the United States affiliated with the foreign 
exporter, constructed export price applies even if the sale occurs 
prior to importation.
 Please include any sales exported by your company directly to 
the United States.
 Please include any sales exported by your company to a third-
country market economy reseller where you had knowledge that the 
merchandise was destined to be resold to the United States.
 If you are a producer of subject merchandise, please include 
any sales manufactured by your company that were subsequently exported 
by an affiliated exporter to the United States.
 Please do not include any sales of merchandise manufactured in 
Hong Kong in your figures.

Further Manufactured:

 Further manufacture or assembly costs include amounts incurred 
for direct materials, labor and overhead, plus amounts for general and 
administrative expense, interest expense, and additional packing 
expense incurred in the country of further manufacture, as well as all 
costs involved in moving the product from the U.S. port of entry to the 
further manufacturer.
[FR Doc. E6-11547 Filed 7-19-06; 8:45 am]
BILLING CODE 3510-DS-S