[Federal Register Volume 73, Number 73 (Tuesday, April 15, 2008)]
[Notices]
[Pages 20250-20256]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-8006]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-933]


Frontseating Service Valves From the People's Republic of China: 
Initiation of Antidumping Duty Investigation

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

EFFECTIVE DATE: April 15, 2008.

FOR FURTHER INFORMATION CONTACT: Hallie N. Zink, AD/CVD Operations, 
China/NME Group, SEC Office, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: 202-482-
6907.

Initiation of Investigation

The Petition

    On March 19, 2008, the Department of Commerce (``Department'') 
received a petition concerning imports of frontseating service valves 
(``FSVs'') from the People's Republic of China (``PRC''), filed in 
proper form by Parker-Hannifin Corporation (``Petitioner''). See 
Petition for the Imposition of Antidumping Duties on Frontseating 
Service Valves, filed March 19, 2008 (``Petition''). On March 25, 2008, 
the Department issued a request for

[[Page 20251]]

additional information and clarification of certain areas of the 
Petition. Based on the Department's request, Petitioner filed 
additional information on March 31, 2008 (``Supplement to the 
Petition''). The Department requested corrections to data filed in the 
Supplement to the Petition and the Petitioner filed the corrections on 
April 4, 2008. See Memorandum to the file dated April 3, 2008, from 
Meredith A. W. Rutherford, Import Policy Analyst.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (``Act''), Petitioner alleges that imports of FSVs from the PRC 
are being, or are likely to be, sold in the United States at less-than-
fair-value (``LTFV''), within the meaning of section 731 of the Act, 
and that the domestic industry is materially injured or threatened with 
material injury by reason of such imports.
    The Department finds that Petitioner may file this Petition on 
behalf of the domestic industry because Petitioner is an interested 
party as defined in section 771(9)(C) of the Act, and has demonstrated 
sufficient industry support with respect to the antidumping duty 
investigation. See Determination of Industry Support for the Petition 
section, infra.

Period of Investigation

    The period of investigation (``POI'') is July 1, 2007, through 
December 31, 2007. See 19 CFR 351.204(b)(1).

Scope of Investigation

    The merchandise covered by this investigation is frontseating 
service valves, assembled or unassembled, complete or incomplete, and 
certain parts thereof. Frontseating service valves contain a sealing 
surface on the front side of the valve stem that allows the indoor unit 
or outdoor unit to be isolated from the refrigerant stream when the air 
conditioning or refrigeration unit is being serviced. Frontseating 
service valves rely on an elastomer seal when the stem cap is removed 
for servicing and the stem cap metal to metal seat to create this seal 
to the atmosphere during normal operation.\1\
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    \1\ The frontseating service valve differs from a backseating 
service valve in that a backseating service valve has two sealing 
surfaces on the valve stem. This difference typically incorporates a 
valve stem on a backseating service valve to be machined of steel, 
where a frontseating service valve has a brass stem. The backseating 
service valve dual stem seal (on the back side of the stem), creates 
a metal to metal seal when the valve is in the open position, thus, 
sealing the stem from the atmosphere.
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    For purposes of the scope, the term ``unassembled'' frontseating 
service valve means a brazed subassembly requiring any one or more of 
the following processes: the insertion of a valve core pin, the 
insertion of a valve stem and/or O ring, the application or 
installation of a stem cap, charge port cap or tube dust cap. The term 
``complete'' frontseating service valve means a product sold ready for 
installation into an air conditioning or refrigeration unit. The term 
``incomplete'' frontseating service valve means a product that when 
sold is in multiple pieces, sections, subassemblies or components and 
is incapable of being installed into an air conditioning or 
refrigeration unit as a single, unified valve without further assembly.
    The major parts or components of frontseating service valves 
intended to be covered by the scope under the term ``certain parts 
thereof'' are any brazed subassembly consisting of any two or more of 
the following components: a valve body, field connection tube, factory 
connection tube or valve charge port. The valve body is a rectangular 
block, or brass forging, machined to be hollow in the interior, with a 
generally square shaped seat (bottom of body). The field connection 
tube and factory connection tube consist of copper or other metallic 
tubing, cut to length, shaped and brazed to the valve body in order to 
create two ports, the factory connection tube and the field connection 
tube, each on opposite sides of the valve assembly body. The valve 
charge port is a service port via which a hose connection can be used 
to charge or evacuate the refrigerant medium or to monitor the system 
pressure for diagnostic purposes.
    The scope includes frontseating service valves of any size, 
configuration, material composition or connection type. Frontseating 
service valves are classified under subheading 8481.80.1095, and also 
have been classified under subheading 8415.90.80.85 of the Harmonized 
Tariff Schedule of the United States (``HTSUS''). It is possible for 
frontseating service valves to be manufactured out of primary materials 
other than copper and brass, in which case they would be classified 
under HTSUS subheadings 8481.80.3040, 8481.80.3090, or 8481.80.5090. In 
addition, if unassembled or incomplete frontseating service valves are 
imported, the various parts or components would be classified under 
HTSUS subheadings 8481.90.1000, 8481.90.3000, or 8481.90.5000. The 
HTSUS numbers are provided for convenience and customs purposes, but 
the written description of the scope is dispositive.

Comments on Scope of Investigation

    During review of the Petition, the Department discussed the scope 
with Petitioner to ensure that it is an accurate reflection of the 
products for which the domestic industry is seeking relief. In 
addition, as discussed in the preamble to the Department's regulations, 
the Department is setting aside a period of time 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 to the Department by April 28, 2008. Comments should be 
addressed to Import Administration's APO/Dockets Unit, Room 1870, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230, Attention: Hallie N. Zink, room 4003. The period 
of scope consultations is intended to provide the Department with ample 
opportunity to consider all comments and to consult with parties prior 
to the issuance of the preliminary determination.

Comments on Product Characteristics for Antidumping Duty Questionnaire

    The Department is requesting comments from interested parties 
regarding the appropriate physical characteristics of FSVs to be 
reported in response to the Department's antidumping questionnaire. 
This information will be used to identify the key physical 
characteristics of the subject merchandise in order for any respondents 
to report more accurately the relevant factors of production, as well 
as develop appropriate product reporting criteria, in accordance with 
the Department's non-market economy (``NME'') methodology, as described 
in the ``Normal Value'' section, infra.
    Interested parties may provide any information or comments that 
they believe are relevant to the development of an accurate listing of 
physical characteristics. Specifically, interested parties may provide 
comments as to which characteristics are appropriate to use as: (1) 
General product characteristics; and (2) product reporting criteria. 
The Department notes that it is not always appropriate to use all 
product characteristics as product reporting criteria. While there may 
be some physical product characteristics that manufacturers use to 
describe FSVs, it may be that only a select few product characteristics 
take into account meaningful physical characteristics of FSVs.

[[Page 20252]]

    In order to consider the suggestions of interested parties in 
developing and issuing the antidumping duty questionnaire, the 
Department must receive non-proprietary comments at the above-
referenced address by April 28, 2008, and receive rebuttal comments by 
May 8, 2008.

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 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 (CIT 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 subtitle.'' 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, Petitioner does not offer 
a definition of domestic like product distinct from the scope of the 
investigation. Based on the Department's analysis of the information 
submitted on the record, the Department has determined that FSVs 
constitutes a single domestic like product and the Department has 
analyzed industry support in terms of that domestic like product. For a 
discussion of the domestic like product analysis in this case, see 
``Antidumping Duty Investigation Initiation Checklist: Frontseating 
Service Valves from the People's Republic of China'' (``Initiation 
Checklist''), at Attachment II (Industry Support), on file in the 
Central Records Unit, Room 1117 of the main Department of Commerce 
building.
    The Department's review of the data provided in the Petition, 
supplemental submissions, and other information readily available to 
the Department indicates that Petitioner has established industry 
support. First, the Petition establishes support from domestic 
producers (or workers) accounting for more than 50 percent of the total 
production of the domestic like product and, as such, the Department is 
not required to take further action in order to evaluate industry 
support (e.g., polling). See Section 732(c)(4)(D) of the Act. Second, 
the domestic producers have met the statutory criteria for industry 
support under 732(c)(4)(A)(i) because the domestic producers (or 
workers) who support the Petition account for at least 25 percent of 
the total production of the domestic like product. Finally, the 
domestic producers have met the statutory criteria for industry support 
under 732(c)(4)(A)(ii) because 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. 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 II.
    The Department finds that 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 the antidumping investigation that it 
is requesting the Department initiate. See Initiation Checklist, at 
Attachment II.

Allegations and Evidence of Material Injury and Causation

    Petitioner alleges that the U.S. industry producing the domestic 
like product is being materially injured by reason of the imports of 
the subject merchandise sold at less than normal value (``NV''). 
Petitioner contends that the industry's injured condition is 
illustrated by the reduced market share, reduced production, and 
capacity utilization, reduced shipments, underselling and price 
depressing and suppressing effects, lost revenue and sales, reduced 
employment, a decline in financial performance, and an increase in 
import penetration. The Department has assessed the allegations and 
supporting evidence regarding material injury, threat of material 
injury, and causation, and the Department determines that these 
allegations are properly supported by adequate evidence and meet the 
statutory requirements for initiation. See Initiation Checklist, at 
Attachment III.

Allegation of Sales at Less Than Fair Value

    The following is a description of the allegation of sales at LTFV 
upon which the Department based its decision to initiate this 
investigation of imports of FSVs from the PRC. The sources of data for 
the deductions and adjustments relating to the U.S. price and the 
factors of production are also discussed in the checklist. See 
Initiation Checklist. Should the need arise to use any of this 
information as facts available under section 776 of the Act in the 
preliminary or final determinations, the Department will re-examine the 
information and revise the margin calculations, if appropriate.

Export Price

    Petitioner obtained three price quotes for three different sized 
FSVs produced and exported by Zhejiang Sanhua Co., Ltd. (``Sanhua'') in 
the PRC and offered for sale to one of its U.S. customers during the 
POI. See Petition, at 23-24; Initiation Checklist. Petitioner deducted 
charges and expenses associated with exporting and delivering the 
product,

[[Page 20253]]

including the affiliated importer, Sanhua International Inc.'s 
(``Sanhua USA''), U.S. indirect selling expenses, U.S. credit expenses, 
U.S. inland freight, ocean freight and insurance charges, U.S. duties, 
U.S. port and wharfage fees, foreign inland freight costs, and foreign 
brokerage and handling. See Petition, at 26; Initiation Checklist. 
Petitioner calculated the affiliated U.S. importer's indirect selling 
expenses based on its own industry knowledge and experience. See 
Petition, at 29, 34, 40; Supplement to the Petition, at 15-17, and AD-
Supp 6; and Initiation Checklist. Petitioner calculated U.S. inland 
freight, port to Sanhua USA's warehouse facility, based on its 
commercial experience and direct quotes for the specific U.S. 
importer's route. See Petition, at 27, 34, 41, and Exhibits AD 2A-AD 
2C; Initiation Checklist. Because Petitioner obtained the U.S. inland 
freight quote after the POI, it provided a period deflator, moving the 
U.S. inland freight quote to the average of the POI. See Supplement to 
the Petition, at 17; I Exhibits AD-Supp 9, and AD-Supp 15A-15C; and 
Initiation Checklist.

Normal Value

    Petitioner notes that the Department's long-standing treatment of 
the PRC as an NME country remains in effect until revoked by the 
Department, and notes that no such revocation determination has been 
made to date. See Petition, at 46-47. The Department has previously 
examined the PRC's market status and determined that NME status should 
continue for the PRC. See Memorandum from the Office of Policy to David 
M. Spooner, Assistant Secretary for Import Administration, regarding 
The People's Republic of China Status as a Non-Market Economy, dated 
May 15, 2006 (available online at http://ia.ita.doc.gov/download/prc-nme-status/prc-nme-status-memo.pdf). In addition, in recent 
investigations, the Department has continued to determine that the PRC 
is an NME country. See Final Determination of Sales at Less Than Fair 
Value and Partial Affirmative Determination of Critical Circumstances: 
Certain Polyester Staple Fiber from the People's Republic of China, 72 
FR 19690 (April 19, 2007); Final Determination of Sales at Less Than 
Fair Value: Certain Activated Carbon from the People's Republic of 
China, 72 FR 9508 (March 2, 2007).
    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, therefore, remains in effect for 
purposes of the initiation of this investigation. Accordingly, the 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.
    Petitioner asserts that, of the five countries normally considered 
as alternative surrogate market economies for the PRC, i.e., India, 
Egypt, Indonesia, the Philippines and Sri Lanka, India is the 
appropriate surrogate country for the PRC because it is has a 
significant brass valve industry, including several producers of FSVs, 
is at a comparable level of economic development, and surrogate data 
from India are available and reliable. See Petition, at 47-48; 
Initiation Checklist. Further, Petitioner notes that the four other 
potential surrogate countries either have no FSVs production, or have 
FSVs production on a limited scale. See Petition, at 49-50, and Exhibit 
AD 3D; Initiation Checklist. Based on the information provided by 
Petitioner, the Department believes that the use of India as a 
surrogate country is appropriate for purposes of initiation. See 
Initiation Checklist. However, after initiation of the investigation, 
interested parties will have the opportunity to submit comments 
regarding surrogate country selection and, pursuant to 19 CFR 
351.301(c)(3)(i), 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.
    Petitioner calculated NVs and dumping margins for each of the three 
U.S. prices, discussed above, using the Department's NME methodology as 
required by 19 CFR 351.202(b)(7)(i)(C) and 19 CFR 351.408. Petitioner 
calculated NVs based on its own consumption rates for producing FSVs in 
2007, with adjustments made for known differences, which included 
adjustments for labor and total material weight per piece. See 
Petition, at 51-56, and Exhibits AD11-AD11C; Supplement to the 
Petition, at 21-22, 27-28, and Exhibits AD--Supp 17-17C; and Initiation 
Checklist. Petitioner states that its production experience is 
representative of the production process used in the PRC because 
production of FSVs by large Chinese producers is based on similar, 
partly vertically integrated manufacturing starting with brass bar and 
copper tubing. See Petition, at 51; Supplement to the Petition, at 21-
22; and Initiation Checklist.
    Petitioner valued the factors of production on reasonably 
available, public surrogate country data, including official Indian 
government import statistics. See Petition, at 56; Initiation 
Checklist. Petitioner sourced the Indian statistics from the World 
Trade Atlas (``WTA''), excluding values from countries previously 
determined by the Department to be NME countries, as well as imports 
into India from Indonesia, the Republic of Korea, and Thailand because 
they maintain broadly available, non-industry specific, export 
subsidies. Specifically, Petitioner relied on WTA data for the 
following production inputs (i.e., raw material metal inputs, semi-
finished parts purchased, scrap as a production cost offset, chemical 
inputs, industrial gasses, and packing materials): Brass bar for valve 
bodies and valve stems; copper tubing to create a factory connection 
and field connection; valve stem caps; brass charge ports; check 
(gauge) valve cores; brass acorn charge port caps; plastic (neoprene) 
o-rings; copper scrap; brass scrap; coolant; solvent; hydraulic fluid; 
hydrogen; helium; compressed air; corrugated cartons; corrugated 
packing pads/cartons dividers; carton labels; wood pallets; and plastic 
pallet film. See Petition, at 59-81; Supplement to the Petition, at AD-
Supp 17; and Initiation Checklist.
    Petitioner used the US$ 0.83/hour labor rate for the PRC currently 
available for 2004 on the Department's Web site. See Petition, at 81, 
and Exhibit AD 22; Initiation Checklist. After noting that the WTA 
import value for the industrial gas input, nitrogen, appeared 
particularly high, Petitioner compared it against another source, a 
domestic Indian gas price. Subsequently, Petitioner determined to apply 
a more conservative surrogate value for nitrogen obtained from Bhoruka 
Gas Limited, an Indian manufacturer of industrial gases,\2\ inflated 
from the 1997 source material, rather than the WTA value.\3\ See 
Petition, at 84; Initiation Checklist. Petitioner valued electricity 
for industrial use in India in the fourth quarter of 2002, as published 
by the International Energy Agency (``IEA'') in its 2005 Key World 
Energy Statistics on-line. See Petition, at 82; Supplement to

[[Page 20254]]

the Petition, at 30; and Initiation Checklist. Petitioner valued 
natural gas based on the publication of non-subsidized Indian natural 
gas prices. Petitioner explains that, as noted in a May 28, 2005, 
Financial Express article, analysis must differentiate between the 
subsidized GAIL natural gas tariff and the Indian market-determined 
price for industrial users. See Petition, at 83, and Exhibit AD 23B; 
Supplement to the Petition, at 30.
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    \2\ As previously used in the Preliminary Determination of the 
Antidumping Duty Investigation of Carbon and Certain Alloy Steel 
Wire Rod from Moldova, 67 FR 17401(April 2, 2002) (``Steel Wire Rod 
from Moldova'').
    \3\ See Steel Wire Rod from Moldova, Factors of Production 
Valuation/Analysis Memorandum dated, April 2, 2002, at 6.
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    Petitioner calculated water prices from publicly available 
information published by the Maharashtra Industrial Development 
Corporation on India. See Petition, at 83, and Exhibit AD 23C; 
Supplement to the Petition, at 30. Where Petitioner was unable to find 
input prices contemporaneous with the POI, it adjusted for inflation 
using the wholesale prices index for India, as published in 
``International Financial Statistics'' by the International Monetary 
Fund. See Petition, at 57; Supplement to the Petition, at 29-30, and 
Exhibits AD-Supp 13 and 14; and Initiation Checklist. For exchange 
rates to convert Indian Rupees to U.S. Dollars, Petitioner averaged the 
foreign currency exchange rates, as provided on the Department's Web 
site, for each day of the POI. Monetary conversions were applied only 
after having first applied a Rupees-based inflator to the original 
source Rupee value, as necessary. See Petition, at 58, and Exhibit AD 
5; Supplement to the Petition, at 29-30; and Initiation Checklist.
    Petitioner was unable to provide a specific Indian Harmonized 
Tariff Schedule (``HTS'') category for brazing rings, one of the raw 
material inputs it purchased and used in the production of FSVs. 
Petitioner explains that brazing rings, which are made of copper, 
silver, zinc, phosphorus and tin, are used to connect various 
components of the valve assembly. See Petition, at 67; Initiation 
Checklist. Petitioner argues that because the finished brazing ring is 
a highly value-added component, the Department should value each 
element in the alloy composition (silver, zinc, phosphorus, and tin) 
and then attribute the value of each element to the proportion of each 
element. See Petition, at 67-68; Supplement to the Petition, at 30-32; 
and Initiation Checklist. Petitioner notes that it was similarly unable 
to locate an HTS category specific to brazing rings in one of the four 
other potential surrogate countries, i.e., Egypt, Indonesia, the 
Philippines and Sri Lanka. See Supplement to the Petition, at 30-31; 
Initiation Checklist. While Petitioner did provide an Indian HTS basket 
subcategory, 8481.90.90 OTHER PARTS OF THE ITEMS UNDER HDG 8481, for 
valuing this raw material input, which it concedes would cover brazing 
rings, it argues that the average unit value (``AUV'') for this HTS is 
far lower than the actual U.S. market price paid by Petitioner. See 
Supplement to the Petition, at 31-32; Initiation Checklist. For 
initiation purposes, however, rather than attempting to account for the 
exact metal formulation in the alloy composition, we have determined to 
conservatively value brazing rings using the Indian HTS subcategory 
8481.90.90. See Initiation Checklist, at Attachment V.
    For the surrogate financial expenses for factory overhead, selling, 
general and administrative expenses (``SG&A''), and profit, Petitioner 
relied on the financial ratios of Brassomatic Pvt. Ltd. 
(``Brassomatic''), an Indian brass air-conditioning valve producer and 
Carbac Holdings Ltd. (``Carbac''), an Indian brass valve producer for 
the natural gas industry. Brassomatic, however, had no profit before 
taxes in 2006/2007, while Carbac recorded profits during that time. 
Therefore, Petitioner calculated factory overhead and SG&A expenses 
using Brassomatic's 2006/2007 financial statements, while calculating 
surrogate profit using Carbac's 2006/2007 financial statements. See 
Petition, at 85-86, and Exhibits AD 24-AD 25; Supplement to the 
Petition, at 24-26, and Exhibits AD-Supp 17A-17C; Initiation Checklist. 
Since Brassomatic's financial statement did not report a profit, we 
have determined not to use any of Brassomatic's data in our calculation 
of surrogate financial ratios for purposes of this initiation. It is 
the Department's practice to disregard financial statements with zero 
profit when there are financial statements of other surrogate companies 
that have earned profit on the record. See Notice of Initiation of 
Antidumping Duty Investigations: Electrolytic Manganese Dioxide from 
Australia and the People's Republic of China, 72 FR 52850 (September 
17, 2007); citing Certain Frozen Warmwater Shrimp from the Socialist 
Republic of Vietnam: Final Results of the First Antidumping 
Administrative Review and First New Shipper Review, 72 FR 52052 
(September 12, 2007) and accompanying Issues and Decision Memorandum at 
Comment 2, section B. Therefore, we have recalculated factory overhead, 
SG&A, and profit using Carbac's 2006/2007 reported financial ratios. 
Although Carbac is not as similar as Brassomatic is to the PRC 
producer, it is still a producer of comparable merchandise and 
therefore serves as a viable alternative source of surrogate financial 
ratios information. See Initiation Checklist, at Attachment V.

Fair Value Comparisons

    Based on the data provided by Petitioner, as adjusted by the 
Department, there is reason to believe that imports of FSVs from the 
PRC are being, or are likely to be, sold in the United States at LTFV. 
Based on comparisons of export price to NV, calculated in accordance 
with section 773(c) of the Act, the estimated dumping margins for FSVs 
range from 25.82 percent to 55.62 percent. See Initiation Checklist, at 
Attachment V.

Initiation of Antidumping Investigations

    Based upon the examination of the Petition on FSVs from the PRC, 
the Department finds that the Petition meets the requirements of 
section 732 of the Act. Therefore, the Department is initiating an 
antidumping duty investigation to determine whether imports of FSVs 
from the PRC are being, or are likely to be, sold in the United States 
at LTFV. In accordance with section 733(b)(1)(A) of the Act, unless 
postponed, the Department will make its preliminary determination no 
later than 140 days after the date of this initiation.

Separate Rates

    In order to obtain separate-rate status in NME investigations, 
exporters and producers must submit a separate-rate status application. 
See Policy Bulletin 05.1: Separate-Rates Practice and Application of 
Combination Rates in Antidumping Investigations involving Non-Market 
Economy Countries (April 5, 2005) (``Separate Rates/Combination Rates 
Bulletin''), available on the Department's Web site at http://ia.ita.doc.gov/policy/bull05-1.pdf. The specific requirements for 
submitting the separate-rate application in this investigation are 
outlined in detail in the application itself, available on the 
Department's Web site 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 rate-application will be due sixty (60) 
days from the date of publication of this initiation notice in the 
Federal Register.

NME Respondent Selection and Quantity and Value Questionnaire

    The Department will request quantity and value information from all 
known exporters and producers identified in the Petition and Supplement 
to the Petition. The quantity and value data

[[Page 20255]]

received from NME exporters/producers will be used as the basis to 
select the mandatory respondents.
    The Department requires that the respondents submit a response to 
both the quantity and value questionnaire and the separate-rate 
application by the respective deadlines in order to receive 
consideration for separate-rate status. See Circular Welded Austenitic 
Stainless Pressure Pipe from the People's Republic of China: Initiation 
of Antidumping Duty Investigation, 73 FR 10221, 10225 (February 26, 
2008); and Initiation of Antidumping Duty Investigation: Certain Artist 
Canvas From the People's Republic of China, 70 FR 21996, 21999 (April 
28, 2005). Appendix I of this notice contains the quantity and value 
questionnaire that must be submitted by all NME exporters/producers no 
later than May 8, 2008. In addition, the Department will post the 
quantity and value questionnaire along with the filing instructions on 
the Import Administration Web site, at http://ia.ita.doc.gov/ia-highlights-and-news.html. The Department will send the quantity and 
value questionnaire to those PRC companies identified in the Petition, 
at 9; Supplement to Petition, at 1-2.

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/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.

    See Separate Rates/Combination Rates Bulletin, at 6.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act and 19 CFR 
351.202(f), copies of the public version of the Petition have been 
provided to the representatives of the Government of the PRC. The 
Department considers the service of the public version of the Petition 
to the foreign exporters/producers satisfied by the delivery of a 
public version to the Government of the PRC, consistent with 19 CFR 
351.203(c)(2).

U.S. International Trade Commission Notification

    The Department has notified the ITC of its initiation, as required 
by section 732(d) of the Act.

Preliminary Determination by the International Trade Commission

    The ITC will preliminarily determine, no later than May 5, 2008, 
whether there is a reasonable indication that the U.S. industry is 
materially injured or threatened with material injury by imports of 
FSVs from the PRC. A negative ITC determination with respect to the 
investigation 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: April 8, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.

Appendix I

    Where it is not practicable to examine all known exporters/
producers 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.
    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 of Investigation'' section of this 
notice), produced in the PRC, and exported/shipped to the United 
States during the period July 1, 2007, through December 31, 2007.

----------------------------------------------------------------------------------------------------------------
                                          Total quantity in
                Market                          pieces               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 at port of export).

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 customer 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 subject merchandise 
manufactured in Hong Kong in your figures.

[[Page 20256]]

Constructed Export Price Sales:

     Generally, a U.S. sale is classified as a constructed 
export price sale when the first sale to an unaffiliated customer 
occurs after importation. However, if the first sale to the 
unaffiliated customer 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 subject merchandise 
manufactured in Hong Kong in your figures.

Further Manufactured:

     Sales of further manufactured or assembled (including 
re-packaged) merchandise is merchandise that undergoes further 
manufacture or assembly in the United States before being sold to 
the first unaffiliated customer.
     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. E8-8006 Filed 4-14-08; 8:45 am]
BILLING CODE 3510-DS-P