[Federal Register: June 27, 2003 (Volume 68, Number 124)]
[Notices]
[Page 38305-38309]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jn03-48]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-427-825, A-580-853, A-588-863]
Notice of Initiation of Antidumping Duty Investigation: Thermal
Transfer Ribbons From France, Japan and the Republic of Korea
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Initiation of Antidumping Duty Investigation.
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EFFECTIVE DATE: June 27, 2003.
FOR FURTHER INFORMATION CONTACT: Julio Fernandez (France) at 202-482-
0961, Alex Villanueva (Japan) at 202-482-3208, Fred Baker (South Korea)
at 202-482-2924 or Robert James at 202-482-0649, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230.
Initiation of Investigation
The Petition
On May 30, 2003, the Department of Commerce (the Department)
received a petition filed in proper form by International Imaging
Materials, Inc. (IIMAK, or petitioner). On June 2, 13, and 18, 2003,
petitioner submitted clarifications of the petition. IIMAK is a
domestic producer of thermal transfer ribbons. In accordance with
section 732(b) of the Tariff Act of 1930, as amended (the Tariff Act),
the petitioner alleges imports of thermal transfer ribbon from France,
Japan and the Republic of Korea (South Korea) 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 Tariff Act, and that such imports are
materially injuring, or threatening material injury to, the U.S.
industry.
The Department finds the petitioner filed its petition on behalf of
the domestic industry because it is an interested party as defined in
section 771(9)(C) of the Tariff Act, and it has demonstrated sufficient
industry support with respect to the investigations it is presently
seeking. See, ``Determination of Industry Support for the Petitions,''
below.
Scope of the Investigations
These investigations cover wax and wax/resin thermal transfer
ribbons (TTR), in slit or unslit (``jumbo'') form originating from
France, Japan or South Korea, with a total wax (natural or synthetic)
content of all the image side layers, that transfer in whole or in
part, of equal to or greater than 20 percent by weight and a wax
content of the colorant layer of equal to or greater than 10 percent by
weight, and a black color as defined by industry standards by the
CIELAB (International Commission on Illumination) color specification
such that L[ast]<35, -20a[ast]<35 and -40<31, and
black and near-black TTR. TTR is typically used in printers generating
alphanumeric and machine-readable characters, such as bar codes and
facsimile machines.
The petition does not cover pure resin TTR, and finished thermal
transfer ribbons with a width greater than 212 millimeters (mm), but
not greater than 220 mm (or 8.35 to 8.66 inches) and a length of 230
meters (m) or less (i.e., slit fax TTR, including cassetted TTR), and
ribbons with a magnetic content of greater than or equal to 45 percent,
by weight, in the colorant layer.
The merchandise subject to this investigation may be classified in
the Harmonized Tariff Schedule of the United States (HTSUS) at heading
3702 and subheadings 3921.90.40.25, 9612.10.90.30, 3204.90, 3506.99,
3919.90, 3920.62, 3920.99 and 3926.90. The tariff classifications are
provided for convenience and Customs purposes; however, the written
description of the scope of the investigation is dispositive.
As discussed in the preamble to the Departments regulations, we are
setting aside a period for 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 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, 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
[[Page 38306]]
prior to the issuance of the preliminary determinations.
Determination of Industry Support for the Petition
Section 732(b)(1) of the Tariff Act requires that a petition be
filed on behalf of the domestic industry. Section 732(c)(4)(A) of the
Tariff Act provides that the Department's industry support
determination, which is to be made before the initiation of the
investigation, be based on whether a minimum percentage of the relevant
industry supports the petition. A petition 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 Tariff 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 Tariff 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 International Trade Commission (the Commission),
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 Commission must apply the same statutory definition regarding the
domestic like product (section 771(10) of the Tariff 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 (Ct. Int'l Trade 2001), citing
Algoma Steel Corp. Ltd. v. United States, 688 F. Supp. 639, 642-44 (Ct.
Int'l Trade 1988) (``the ITC does not look behind ITA's determination,
but accepts ITA's determination as to which merchandise is in the class
of merchandise sold at LTFV'').
Section 771(10) of the Tariff 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 determining whether the domestic petitioner has standing, we
considered the industry support data contained in the petition with
reference to the domestic like product as defined above in the ``Scope
of the Investigations'' section. To establish standing, petitioner
provided its actual production data for the domestic like product for
the year 2002. To estimate 2002 production for all other domestic
thermal transfer ribbon producers named in the petition, petitioner
estimated production data by several means. These estimated production
data were added to the actual production data detailed above to arrive
at total estimated U.S. production of thermal transfer ribbon for the
year 2002 in thousands of square inches (msi). See Petition at Exhibit
A-1 and Exhibit A-2 containing an affidavit by an IIMAK thermal
transfer ribbon division official describing how the production data
were estimated.
Using the data described above, the share of total estimated U.S.
production of thermal transfer ribbon in 2002 represented by petitioner
(there were no other supporting parties) equals over 50 percent of
total domestic production. Therefore, the Department finds the domestic
producers who support the Petition account for at least 25 percent of
the total production of the domestic like product. In addition, as no
domestic producers have expressed opposition to the Petition, the
Department also finds 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.
With regard to the domestic like product, petitioner's definition
of the like product is identical to the scope of these investigations.
See Petition at 69. Based on our analysis of the information submitted
in the Petition we have determined there is a single domestic like
product, thermal transfer ribbons in slit or jumbo form, which is
defined further in the ``Scope of the Investigations'' section above,
and we have analyzed industry support in terms of that domestic like
product. For more information on our analysis and the data upon which
we relied, see the Antidumping Investigation Initiation Checklist
(Initiation Checklist), dated June 19, 2003, at ``Industry Support,''
and Appendix 1.
Therefore, we find that petitioners have met the requirements of
section 732(c)(4)(A) of the Tariff Act.
Constructed Export Price and Normal Value
The following are descriptions of the allegations of sales at less
than fair value upon which the Department based its decision to
initiate these investigations. The source or sources of data for the
deductions and adjustments relating to U.S. and foreign market prices
and cost of production and constructed value have been accorded
treatment as business proprietary information. Petitioner's sources and
methodology are discussed in greater detail in the business proprietary
version of the Petition and in our Initiation Checklist. We corrected
certain information contained in the petition's margin calculations;
these corrections are set forth in detail in the Initiation Checklist.
Should the need arise to use any of this information as facts available
under section 776 of the Tariff Act in our preliminary or final
determinations, we may re-examine this information and revise the
margin calculations, if appropriate.
Period of Investigation
The period of investigation for these cases will be April 1, 2002
through March 31, 2003, or the four most-recently completed fiscal
quarters as of the month preceding the month in which the petition was
filed. See 19 CFR 351.204(b).
France
Constructed Export Price
To calculate constructed export price (CEP) petitioner obtained
pricing information for certain wax and wax/resin products sold to
unaffiliated parties in the United States, and comparable to the
products sold in the home market. Petitioner made certain adjustments
to this selling price for specific expenses that would be incurred by
foreign producers of the subject merchandise for sales made in the
United States. Because petitioner was unable to obtain actual data for
selling expenses incurred by respondents in the United States,
petitioner obtained price quotes as a
[[Page 38307]]
basis for its estimation of certain expenses, and, where appropriate,
also based its estimates for such expenses on actual figures incurred
in the course of its own selling activities. Petitioner indicates this
approach is a reasonable and appropriate way to calculate CEP because
the selling process for thermal transfer ribbon is uniform within the
United States, and the selling activities performed by respondents'
U.S. affiliates for their U.S. customers are largely the same as those
performed by petitioner for its customers in the United States. See
Petition at 49. Where known differences between petitioner's and
respondents' operations exist, petitioner adjusted selling expenses
accordingly to account for such differences.
Petitioner adjusted the U.S. prices for ocean freight, marine
insurance, U.S. duties, packaging expenses, indirect selling expenses
incurred by the respondent's U.S. affiliate, inventory carrying costs
in transit, and a figure for CEP profit. Where possible, these expenses
were based upon petitioner's actual experience; where petitioner lacked
such data, petitioner made reasonable estimates as described above.
Petitioner based CEP profit for the respondent, Armor SA, upon the
experience of Dai Nippon Printing, a Japanese TTR producer. Petitioner
explained this was a reasonable surrogate figure because no sector-
specific profit data are available for the French TTR industry. With
respect to selling expenses incurred in France, petitioner indicates
there is no basis to believe that such expenses would differ for
thermal transfer ribbon destined for the United States versus
merchandise sold in the home market. Therefore, petitioner claims it is
reasonable to consider such expenses to be equal for sales to the
United States and in the home market. We have accepted this methodology
for purposes of this initiation.
Normal Value
With respect to normal value (NV), petitioner relied on foreign
market research to obtain information on the prices of two grades of
thermal transfer ribbon sold in the French market. This sales
information is contemporaneous with the pricing information used as the
basis for CEP, and represents products which are either identical or
similar to those sold in the United States. See Petition Exhibits A-7
and A-8.
The petitioner also provided information demonstrating reasonable
grounds to believe or suspect that sales of TTR in the home market were
made at prices below the fully absorbed cost of production (COP),
within the meaning of section 773(b) of the Tariff Act, and requested
that the Department initiate a country-wide sales-below-cost
investigation.
Pursuant to section 773(b)(3) of the Tariff Act, COP consists of
cost of manufacture (COM), selling, general and administrative (SG&A)
expenses, and packing. The petitioner calculated COM based on the
experience of a U.S. TTR producer, adjusted for known differences based
on petitioner's knowledge of French TTR producers' operations and other
publically available data. See Petition at 64 and Exhibit B-14, and
Petitioner's June 13, 2003 submission at 20 through 22 and Exhibit B-
27. According to the petitioner, these are the most specific cost data
reasonably available. The U.S. producer's figures are reasonable to use
to estimate French producers' costs because, according to the
petitioner, U.S. and French producers have similar production
processes. Petitioner states it was unable to obtain French producers'
cost of production data. Petitioner determined French producers' raw
materials cost, variable and fixed overhead, SG&A and packing cost
based on the costs incurred by the U.S. producer and adjusted for the
known differences. See id. Petitioner valued labor costs based on the
U.S. producer's production experience adjusted for known differences
and French hourly wages in U.S. dollars as posted on the Department's
web site.
Based upon a comparison of the price of the foreign like product in
the home market to the calculated COP of the product, we find
reasonable grounds to believe or suspect that sales of the foreign like
product were made below the COP, within the meaning of section
773(b)(2)(A)(i) of the Tariff Act. Accordingly, the Department is
initiating a country-wide cost investigation.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Tariff
Act, the petitioners also based NV for sales in France on constructed
value (CV). See Petitioner's June 18 submission. The petitioner
calculated CV using the same COM, SG&A and interest expense figures
used to compute the COP. Consistent with 773(e)(2) of the Tariff Act,
the petitioners included in CV an amount for profit. For profit, the
petitioners relied upon amounts reported for the Japanese company Dai
Nippon Printing's printing business segment for the year ending March
2002. Petitioner states it was unable to obtain specific and detailed
financial data for Armor, the French TTR company and believes it
reasonable to use the rate for Dai Nippon Printing as a surrogate for a
French TTR company. However, we do not believe the Dai Nippon Printing
profit rate is a reasonable surrogate for profit on the sales in the
ordinary course of trade in France for purposes of this initiation. For
initiation purposes, we have recalculated CV without regard to profit,
as we have no acceptable surrogate profit rate on the record. Should
the need arise to use the profit rate suggested by the petitioners as
facts available under section 776 of the Tariff Act in our preliminary
or final determination, we may reexamine the information developed on
the French TTR industry and, if appropriate, revise the margin
calculations.
The estimated dumping margin for subject merchandise from France,
based on comparisons of CEP and NV, range between 16.5 and 60.6
percent. The estimated margin for France based on a comparison of CEP
to CV is 57.7 percent.
Japan
Constructed Export Price
To calculate CEP petitioner obtained pricing information for
certain wax and wax/resin products sold to unaffiliated parties in the
United States, and comparable to the products sold in the home market.
Petitioner made certain adjustments to this selling price for specific
expenses that would be incurred by foreign producers of the subject
merchandise for sales made in the United States. Because petitioner was
unable to obtain actual data for selling expenses incurred by
respondents in the United States, petitioner obtained price quotes as a
basis for its estimation of certain expenses, and, where appropriate,
also based its estimates for such expenses on actual figures incurred
in the course of its own selling activities. Petitioner indicates this
approach is a reasonable and appropriate way to calculate CEP because
the selling process for thermal transfer ribbon is uniform within the
United States, and the selling activities performed by respondents'
U.S. affiliates for their U.S. customers are largely the same as those
performed by petitioner for its customers in the United States. See
Petition at 49. Where known differences between petitioner's and
respondents' operations exist, petitioner adjusted selling expenses
accordingly to account for such differences.
Petitioner adjusted the U.S. prices for ocean freight, marine
insurance, U.S. duties, packaging expenses, indirect selling expenses
incurred by a
[[Page 38308]]
respondent's U.S. affiliate, inventory carrying costs in transit, and a
figure for CEP profit. See Petition at 50 through 55, and Exhibit B-14.
Where possible, these expenses were based upon petitioner's actual
experience; where petitioner lacked such data, petitioner made
reasonable estimates as described above. Petitioner based CEP profit
upon the experience of Dai Nippon Printing, a Japanese TTR producer.
With respect to selling expenses incurred in Japan, petitioner
indicates there is no basis to believe that such expenses would differ
for thermal transfer ribbon destined for the United States versus
merchandise sold in the home market. Therefore, petitioner claims it is
reasonable to consider such expenses to be equal for sales to the
United States and in the home market. We have accepted this methodology
for purposes of this initiation.
Normal Value
In calculating NV, the petitioner relied upon data provided by
foreign market researchers on home market prices of wax and wax resin
TTR products. See Petition at Exhibit B-10. This sales information is
contemporaneous with the pricing information used as the basis for CEP
and represents products which are either identical or similar to those
sold in the United States. No other adjustments were made to NV,
because additional information on home market adjustments was not
reasonably available to petitioner.
The estimated dumping margin for subject merchandise from Japan,
based on comparisons of CEP and NV, range between 65.9 and 147.3
percent.
South Korea
Constructed Export Price
To calculate CEP petitioner obtained pricing information relating
to sales of certain wax products sold to unaffiliated parties in the
United States, and comparable to the product sold in the home market.
Petitioner made certain adjustments to these selling prices for
specific expenses that would be incurred by foreign producers of the
subject merchandise for sales made in the United States. Because
petitioner was unable to obtain actual data for selling expenses
incurred by respondents in the United States, petitioner obtained price
quotes as a basis for its estimation of certain expenses, and, where
appropriate, also based its estimates for such expenses on actual
figures incurred in the course of its own selling activities.
Petitioner indicates this approach is a reasonable and appropriate way
to calculate CEP because the selling process for thermal transfer
ribbon is uniform within the United States, and the selling activities
performed by respondents' U.S. affiliates for their U.S. customers are
largely the same as those performed by petitioner for its customers in
the United States. See Petition at 49. Where known differences between
petitioner's and respondents' operations exist, petitioner adjusted
selling expenses accordingly to account for such differences.
Petitioner adjusted the U.S. prices for ocean freight, marine
insurance, U.S. duties, packaging expenses, indirect selling expenses
incurred by the respondents' U.S. affiliates, inventory carrying costs
in transit, and a figure for CEP profit. Where possible, these expenses
were based upon petitioner's actual experience; where petitioner lacked
such data, petitioner made reasonable estimates as described above. CEP
profit for the respondent was based upon the experience of Dai Nippon
Printing, a Japanese TTR producer. Petitioner explained this was a
reasonable surrogate figure because no sector-specific profit data are
available for the South Korean TTR industry. With respect to selling
expenses incurred in South Korea, petitioner indicates there is no
basis to believe that such expenses would differ for thermal transfer
ribbon destined for the United States versus merchandise sold in the
home market. Therefore, petitioner claims it is reasonable to consider
such expenses to be equal for sales to the United States and in the
home market. We have accepted this methodology for purposes of this
initiation.
Normal Value
With respect to NV, the petitioner relied upon foreign market
research to obtain information relating to home market prices for a
grade of TTR that is almost identical to the grade for which
petitioners obtained U.S. pricing data. Petitioners made no deductions
from the home market selling price because estimates of home market
expenses were not reasonably available to petitioner. See Petition at
50. Thus, petitioners made no deductions for expenses incurred in Korea
in its calculations of either net U.S. price or net home market price.
The estimated dumping margin for subject merchandise from South
Korea, based on comparisons of CEP and NV, range between 56.6 and 59.9
percent.
Fair Value Comparisons
Based on the data provided by petitioner, there is reason to
believe imports of TTR from France, Japan and South Korea are being, or
are likely to be, sold at less than fair value.
Allegations and Evidence of Material Injury and Causation
With respect to France, Japan and South Korea, petitioner alleges
the U.S. industry producing the domestic like product is being
materially injured, or threatened with material injury, by reason of
the individual and cumulated imports of the subject merchandise sold at
less than NV.
Petitioner contends the industry's injured condition is evident in
examining net operating income, profit, net sales volumes, production
employment, as well as inventory levels, and reduced capacity
utilization. See Petition at 84 et seq. Petitioner asserts its share of
the market has declined from 2000 to 2002. Finally, petitioner notes
one TTR manufacturer went out of business altogether in 2001, while
another closed one of its coating facilities. For a full discussion of
the allegations and evidence of material injury, see the Initiation
Checklist at Appendix II.
Initiation of Antidumping Investigations
Based on our examination of the Petition covering TTR, we find it
meets the requirements of section 732 of the Tariff Act. Therefore, we
are initiating antidumping duty investigations to determine whether
imports of TTR from France, Japan and South Korea are being, or are
likely to be, sold in the United States at less than fair value. Unless
this deadline is extended pursuant to section 733(b)(1)(A) of the
Tariff Act, we will make our preliminary determinations no later than
140 days after the date of this initiation.
Distribution of Copies of the Petition
In accordance with section 732(b)(3)(A) of the Tariff Act, a copy
of the public version of the Petition has been provided to
representatives of the governments of France, Japan and South Korea. We
will attempt to provide a copy of the public version of the Petition to
each exporter named in the Petition, as provided in section 19 CFR
351.203(c)(2).
Commission Notification
The International Trade Commission will preliminarily determine no
later than July 14, 2003, whether there is reasonable indication that
imports of TTR from France, Japan and South Korea are causing, or
threatening, material injury to a U.S. industry. A
[[Page 38309]]
negative Commission 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 Tariff Act.
Dated: June 19, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-16341 Filed 6-26-03; 8:45 am]