Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Notices 23267

1See Algoma Steel Corp., Ltd. v. United States,

688 F. Supp. 639, 642–44 (CIT 1988); High

Information Content Flat Panel Displays and

Display Glass Therefor from Japan: Final

Determination; Rescission of Investigation and

Partial Dismissal of Petition, 56 Fed. Reg. 32376,

32380–81 (July 16, 1991).

DEPARTMENT OF COMMERCE

International Trade Administration

[A–560–803, C–560–804]

Initiation of Antidumping and

Countervailing Duty Investigations:

Extruded Rubber Thread From

Indonesia

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: April 28, 1998.

FOR FURTHER INFORMATION CONTACT:

Anne D’Alauro (antidumping

investigation) or Stephanie Moore

(countervailing duty investigation),

Office of CVD/AD Enforcement VI,

International Trade Administration,

U.S. Department of Commerce, Room

1870, 14th Street and Constitution

Avenue, N.W., Washington, DC 20230;

telephone (202) 482–2786.

INITIATION OF INVESTIGATIONS:

The Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Tariff Act of 1930 (‘‘the

Act’’) by the Uruguay Round

Agreements Act (‘‘URAA’’). In addition,

unless otherwise indicated, all citations

to the Department’s regulations are to

the regulations codified at 19 CFR Part

351, published in the Federal Register

on May 19, 1997 (62 FR 27296).

The Petition

On March 31, 1998, the Department of

Commerce (the Department) received a

petition filed in proper form by North

American Rubber Thread Co., Ltd. (‘‘the

petitioner’’). A supplement to the

petition was filed on April 13, 1998.

The petitioner alleges that imports of

extruded rubber thread from Indonesia

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 countervailable subsidies

are being provided to producers and/or

exporters of extruded rubber thread

from Indonesia within the meaning of

section 701 of the Act. The petitioner

alleges that imports of such unfairly

traded (i.e., dumped and subsidized)

extruded rubber thread from Indonesia

materially injure, or threaten material

injury to, 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 (see discussion below).

Scope of Investigation

For purposes of the antidumping and

countervailing duty investigations, the

product covered is extruded rubber

thread (‘‘rubber thread’’) from

Indonesia. Rubber thread is defined as

vulcanized rubber thread obtained by

extrusion of stable or concentrated

natural rubber latex of any cross

sectional shape, measuring from 0.18

mm, which is 0.007 inches or 140 gauge,

to 1.42 mm, which is 0.056 inch or 18

gauge, in diameter.

Rubber thread is currently classified

under subheading 4007.00.00 of the

Harmonized Tariff Schedule (HTS).

Although the HTS 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 insure that the scope in the petition

accurately reflects the product for which

the domestic industry is seeking relief.

The petitioner addressed the scope in its

March 31, 1998 and April 13, 1998

submissions to the Department. As

discussed in the preamble to the new

regulations (62 FR at 27323), the

Department is setting aside a period for

parties to raise issues regarding product

coverage. We encourage parties to

submit such comments by May 8, 1998.

Comments should be addressed to

Import Administration’s Central

Records Unit at Room 1870, U.S.

Department of Commerce, Pennsylvania

Avenue and 14th Street, N.W.,

Washington, D.C. 20230. This period of

scope consultations is intended to

provide the Department with ample

opportunity to consider all comments

and consult with parties prior to the

issuance of the preliminary

determination.

Consultations

Pursuant to section 702(b)(4)(A)(ii) of

the Act, the Department invited

representatives of the Government of

Indonesia to participate in consultations

with respect to the countervailing duty

petition. The Government of Indonesia

did not avail itself of this opportunity.

Determination of Industry Support for

the Petition

Sections 702(b)(1) and 732(b)(1) of the

Act require that a petition be filed on

behalf of the domestic industry.

Sections 702(c)(4)(A) and 732(c)(4)(A) of

the Act provide that a petition meets

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.

Section 771(4)(A) of the Act defines

the ‘‘industry’’ as the producers of a

domestic like product. Thus, to

determine whether the petition has the

requisite industry support, the statute

directs the Department to look to

producers and workers who account for

production of the domestic like product.

The 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 provision regarding the

domestic like product (section 771(10)

of the Act), they do so for different

purposes and pursuant to separate and

distinct statutory authority. In addition,

the Department’s determination is

subject to limitations of time and

information. Although this may result in

different definitions of the domestic like

product, such differences do not render

the decision of either agency contrary to

the law.1

Section 771(10) of the Act defines

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.

The domestic like product referred to

in the petition is the single domestic

like product defined in the ‘‘Scope of

Investigation’’ section, above. The

Department has no basis on the record

to find the petition’s definition of the

domestic like product to be inaccurate.

The Department has adopted the

domestic like product definition set

forth in the petition.

The Department’s analysis indicates

that the petitioner accounts for at least

25 percent of the total production of the

domestic like product. The Department

has confirmed the petitioner’s assertion
23268 Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Notices

that Globe Manufacturing Co. (‘‘Globe’’)

is the only other producer of the

domestic like product. On April 17,

1998, Globe submitted a statement of

opposition to the petition. However, the

Department has determined to disregard

Globe’s position.

To satisfy the requirements of sections

702 and 732, petitioners and supporters

of the petition, in addition to accounting

for at least 25 percent of total domestic

production, must account for more than

50 percent of the production of the

domestic like product produced by that

portion of the industry expressing

support or opposition to the petition

(sections 702(c)(4)(A) and 732(c)(4)(A)

of the Act). However, under certain

circumstances, the Department must

disregard the positions of domestic

producers related to foreign producers.

In addition, the Department may

disregard the position of producers who

are importers. (Sections 702(c)(4)(B) and

732(c)(4)(B)of the Act). In this case, the

petitioner alleged that Globe is related

to an Indonesian producer of subject

merchandise and that Globe is also an

importer of subject merchandise from

Indonesia. Globe’s April 17, 1998

submission clarifies the facts alleged by

the petitioner. Based on our

examination of the information

presented by Globe, we have

determined that Globe’s position should

be disregarded for purposes of

determining industry support for the

petition pursuant to sections

702(c)(4)(B) and 732(c)(4)(B) of the Act.

See Industry Support section of the AD/

CVD Checklist (Public Version) which is

on file in room B–099 of the main

Commerce building. Therefore, we

conclude that the petitioner met the

statutory requirement for industry

support. Accordingly, the Department

determines that the petition is filed on

behalf of the domestic industry within

the meaning of sections 702(b)(1) and

732(b)(1) of the Act.

Injury Test

Because Indonesia is a ‘‘Subsidies

Agreement Country’’ within the

meaning of section 701(b) of the Act,

section 701(a)(2) of the Act applies to

the countervailing duty investigation.

Accordingly, the U.S. International

Trade Commission (ITC) must

determine whether imports of the

subject merchandise from Indonesia

materially injure, or threaten material

injury to, a U.S. industry.

Allegations and Evidence of Material

Injury and Causation

The petition alleges that the U.S.

industry producing the domestic like

product is being materially injured, or is

threatened with material injury, by

reason of imports of the subject

merchandise being sold at less than fair

value and/or benefitting from the

bestowal of countervailable subsidies.

The allegations of injury and causation

are supported by relevant evidence

including business proprietary data

from the petitioner and the Indonesian

export statistics provided in the

petition. The Department assessed the

allegations and supporting evidence

regarding material injury and causation

and determined that these allegations

are sufficiently supported by accurate

and adequate evidence and meet the

statutory requirements for initiation. See

Tab B accompanying the AD/CVD

Checklist (public version) which is on

file in room B–099 of the main

Commerce building.

Allegation of Sales at Less Than Fair

Value/Constructed Export Price and

Normal Value

The following is a description of the

allegation of sales at less than fair value

upon which our decision to initiate the

antidumping duty investigation is

based. Should the need arise to use any

of this information in our preliminary or

final determinations for purposes of

facts available under section 776 of the

Act, we may re-examine the information

and revise the margin calculations, as

appropriate.

The petitioner identified several

exporters and producers of rubber

thread in Indonesia. The petitioner

provided allegations of sales at less than

fair value based on constructed export

price (‘‘CEP’’), within the meaning of

section 772(b) of the Act, and based on

normal value (‘‘NV’’), within the

meaning of section 773 of the Act. The

petitioner based CEP on price quotes

during mid-1997 made by a U.S.

importer affiliated with an Indonesian

supplier of rubber thread to potential

U.S. customers. The petitioner

calculated a net U.S. price by

subtracting estimates of movement costs

and selling expenses. Movement costs

(such as international freight, insurance

and brokerage) were estimated based on

the difference between the CIF values

and the U.S. Customs values for rubber

thread imports from Indonesia reported

in the official U.S. import statistics

during 1997. Selling expenses were

based on North American’s own

experience for selling expenses for 1997,

since the petitioner was unable to

determine what the selling expenses of

the Indonesian affiliated importer were.

The petitioner stated that it was

unable to determine rubber thread

prices or costs in Indonesia and thus

used its own cost information, adjusted

for known differences, because this was

the only information which was

reasonably available to the petitioner.

The calculation of NV is thus based on

constructed value (‘‘CV’’) using the

petitioner’s own cost of producing one

pound of rubber thread, with

adjustments for known differences

between its cost experience and those of

producers in Indonesia. See Tables

Accompanying the AD/CVD Checklist

(Public Version) which is on file in

room B–099 of the main Commerce

building.

Constructed value consists of the cost

of materials, labor, overhead, general

expenses, and profit. The petitioner

used its own cost of rubber latex, the

primary material input, from mid-1997

and adjusted for potential differences in

the precise mixture used by Indonesian

producers, the percentage of latex

content, scrap, and transportation costs.

Other chemical inputs (about 50

differing chemicals and pigments) were

provided with adjustments for losses

incurred in production. The petitioner

did not include the cost of talc, used by

most Indonesian producers, within the

calculation of material costs, but

included these costs as an item of

overhead. The petitioner provided

information regarding skilled labor costs

in Indonesia and, in combination with

its labor experience, made adjustments

to calculate labor costs in Indonesia.

The petitioner describes the cost

estimates for Indonesian labor so

derived as conservative since the

calculation relies on the petitioner’s

lowest standard cost experience.

The petitioner calculated factory

overhead in two different ways. In one

example, the petitioner’s 1997 costs for

overhead as well as electricity were

provided and adjusted for Indonesian

cost differences. In a second example,

the petitioner calculated factory

overhead using the Department’s ‘‘Index

of Factor Values for Use in AD

Investigations Involving Products from

the People’s Republic of China’’ (AD

Factor Values) which provided a factory

overhead ratio of 25 percent for

Indonesia. This ratio was applied to the

combined costs of labor and materials

(exclusive of talc). A slight but

inconsequential increase to the

overhead amount results when talc is

included within materials prior to

application of the overhead ratio.

General expenses were calculated

using two similar methodologies. The

petitioner provided its own 1997

experience for selling, general and

administration expenses (SG&A). In a

less conservative approach, the

petitioner also provided the ratio

reported in the AD Factor Values for
Federal Register / Vol. 63, No. 81 /Tuesday, April 28, 1998 / Notices 23269

general expenses in Indonesia of 27.5

percent. The specific calculations

underlying each of these methodologies

are detailed in the tables attached to the

AD/CVD checklist. Since the petitioner

did not include an amount for profit

within its CV calculation, we note that

the estimated CV would be higher if an

amount for profit were added. In

accordance with 773 of the Act, the

methodology used by the petitioner to

derive NV comports with Department

practice and petition requirements.

The comparisons of NV to net U.S.

prices result in estimated dumping

margins that range from 0.81 percent

(highest CEP compared to lowest NV

estimate) to 62 percent (lowest CEP to

highest NV estimate).

Fair Value Comparisons

Based on the data provided by the

petitioner, there is reason to believe that

imports of rubber thread from Indonesia

are being, or are likely to be, sold in the

United States at less than fair value.

Allegations of Subsidies

Section 702(b) of the Act requires the

Department to initiate a countervailing

duty proceeding whenever an interested

party files a petition, on behalf of an

industry, that (1) alleges the elements

necessary for an imposition of a duty

under section 701(a), and (2) is

accompanied by information reasonably

available to petitioner supporting the

allegations. We are including in our

investigation the following programs

alleged in the petition to have provided

subsidies to producers and exporters of

the subject merchandise in Indonesia.

1. Export Financing

2. Import Duty Exemptions on Capital

Equipment

3. Corporate Income Tax Holidays

4. Investment Credit for the Expansion

of the Rubber Industry

Initiation of Antidumping and

Countervailing Duty Investigations

The Department has examined the

petition on rubber thread from

Indonesia and has found that it

complies with the requirements of

sections 702(b) and 732(b) of the Act.

Therefore, in accordance with sections

702(b) and 732(b), we are initiating

antidumping and countervailing duty

investigations to determine whether

manufacturers, producers, or exporters

of rubber thread from Indonesia are

being, or are likely to be, sold in the

United States at less than fair value and

whether manufacturers, producers or

exporters of rubber thread from

Indonesia received subsidies. See Tab B

accompanying the AD/CVD Checklist

(public version) which is on file in room

B–099 of the main Commerce building.

Unless the relevant deadline is

extended, we will make our preliminary

determinations for the countervailing

duty investigation no later than June 24,

1998 and for the antidumping duty

investigation no later than September 8,

1998.

Distribution of Copies of the Petitions

In accordance with sections

702(b)(4)(A)(i) and 732(b)(3)(A) of the

Act, copies of the public version of the

petition have been provided to the

representatives of the Government of

Indonesia. We will attempt to provide

copies of the public version of the

petition to all exporters named in the

petition, as provided for in section

351.203(c)(2) of the Department’s

regulations.

ITC Notification

Pursuant to sections 702(d) and

732(d) of the Act, we have notified the

ITC of these initiations.

Preliminary Determinations by the ITC

The ITC will determine by May 15,

1998, whether there is a reasonable

indication that an industry in the

United States is being materially

injured, or is threatened with material

injury, by reason of imports from

Indonesia of rubber thread. A negative

ITC determination will result in the

investigation being terminated;

otherwise, the investigations will

proceed according to statutory and

regulatory time limits.

This notice is published pursuant to

section 777(i) of the Act.

Dated: April 20, 1998.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 98–11274 Filed 4–27–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–122–601]

Brass Sheet and Strip From Canada;

Termination of Antidumping Duty

Administrative Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of termination of

antidumping duty administrative

review.

SUMMARY: On October 29, 1997, the

Department of Commerce published in

the Federal Register a notice of

termination of the administrative review

of brass sheet and strip from Canada

covering imports of subject merchandise

for the period January 1, 1993 through

December 31, 1993. Due to a procedural

oversight by the Department of

Commerce, the signature date of this

notice of termination, October 21, 1997,

was one day prior to the date of the

respondent’s formal written request for

termination of the 1993 review, which

was submitted to the Department of

Commerce on October 22, 1997. In light

of this procedural error, the Department

of Commerce rescinded its termination

of this review and reopened the

administrative record of this proceeding

for comments by interested parties on

the question of termination of this

review. After careful review of the

comments submitted by interested

parties, the Department of Commerce

decided that this review should be

terminated and hereby terminates this

review.

EFFECTIVE DATE: April 28, 1998.

FOR FURTHER INFORMATION CONTACT:

Paul Stolz or Thomas Futtner, Office of

AD/CVD Enforcement, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, N.W., Washington, D.C. 20230,

telephone: (202) 482–4474 or (202) 482–

3814, respectively.

Applicable Statute and Regulations:

Unless otherwise stated, all citations to

the statute and to the Department’s

regulations are references to the

provisions as they existed on December

31, 1994.

SUPPLEMENTARY INFORMATION:

Background

The Department of Commerce (the

Department) published an antidumping

duty order on brass sheet and strip from

Canada on January 12, 1987 (52 FR

1217). On January 5, 1994, the

Department published in the Federal

Register a notice of ‘‘Opportunity to

Request an Administrative Review’’ of

the antidumping duty order on brass

sheet and strip from Canada (59 FR

564). On January 21, 1994, a

manufacturer/exporter, Wolverine Tube

(Canada) Inc., (Wolverine) requested an

administrative review of its exports of

the subject merchandise to the United

States for the period of review (POR)

January 1, 1993, through December 31,

1993. In accordance with 19 CFR

353.22(c), we initiated the review on

February 17, 1994 (59 FR 7979).

Wolverine was the only interested party

to request this review. On or about

October 17, 1997, Wolverine notified

the Department by telephone of its