[Federal Register: May 12, 2003 (Volume 68, Number 91)]
[Page 25332-25335]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]



International Trade Administration


Initiation of Antidumping Duty Investigation: Hydraulic Magnetic 
Circuit Breakers from South Africa

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

EFFECTIVE DATE: May 12, 2003.

FOR FURTHER INFORMATION CONTACT: Fred W. Aziz, Thomas Schauer, or 
Richard Rimlinger, Import Administration, International Trade 

[[Page 25333]]

U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone: (202) 482-4023, (202) 482-0410 or 
(202) 482-4477, respectively.


The Petition

    On April 14, 2003, the Department of Commerce (``the Department'') 
received a petition on imports of hydraulic magnetic circuit breakers 
(``HMCBs'') from South Africa filed in proper form by Airpax 
Corporation, LLC (referred to hereafter as ``the petitioner''). On 
April 22, 2003, the Department requested additional information and 
clarification of certain areas of the petition. The petitioner filed a 
supplement to the petition on April 25, 2003.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (``the Act''), the petitioner alleges that imports of HMCBs 
from South Africa 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 finds that the petitioner filed this petition on 
behalf of the domestic industry because they are interested parties as 
defined in section 771(9)(c) of the Act. Furthermore, with respect to 
the antidumping duty investigation the petitioner is requesting the 
Department to initiate, it has demonstrated sufficient industry support 
(see ``Determination of Industry Support for the Petition'' below).

Scope of Investigation

    This investigation covers all hydraulic magnetic circuit breakers 
(sometimes referred to as magnetic hydraulic) circuit breakers 
(``HMCBs''), incorporating a tripping means of a magnetic coil 
surrounding a tube and plunger, restrained by air, liquid or spring, 
whether or not sealed, whether or not of molded case, of any voltage 
less than 72.5 kilovolts, of any amperage rating, with single or 
multiple poles, of any mounting or connection means and of any terminal 
type, whether or not having a magnetic latch, and excluding thermal and 
thermal magnetic circuit breakers. The subject merchandise is 
classified under Harmonized Tariff Schedule of the United States 
(``HTSUS'') subheadings 8535.21.00 and 8536.20.00. Although the HTSUS 
subheadings are provided for convenience and customs purposes, our 
written description of the scope of this investigation is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioner to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. Moreover, as 
discussed in the preamble to the Department's regulations (62 FR 27296, 
27323), we are setting aside a period for interested parties to raise 
issues regarding product coverage. The Department encourages all 
interested parties to submit such comments within 20 calendar days of 
publication of this notice. Comments should be addressed to Import 
Administration's Central Records Unit at Room 1870, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230. The period of scope consultations is intended to provide the 
Department with ample opportunity to consider all comments and consult 
with parties prior to the issuance of the preliminary determination.

Determination of Industry Support for the Petition

    Section 732(b)(1) of the Act requires that a petition must 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: (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 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 administering agency 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 the 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 
ITC''), which is responsible for determining whether ``the domestic 
industry'' has been materially injured, must also determine what 
constitutes a domestic like product in order to define the industry. 
While the Department and the ITC must apply the same statutory 
definition regarding the domestic like product, they do so for 
different purposes and pursuant to separate and distinct authority. In 
addition, the Department's determination is subject to time and 
information limitations. Although this may result in different 
definitions of the domestic like product, such differences do not 
render the decision of either agency contrary to law.\1\

    \1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass from Japan: Final Determination; Rescission of 
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).

    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 
    In its April 14th petition, petitioner claims it has industry 
support. The petitioner states that it compromises virtually all U.S. 
production of HMCBs. However, the petition identifies three additional 
U.S. entities engaged in the sale of HMCBs in the domestic market. 
According to the petition, none of the three maintain commercial 
production in the United States. The petitioner asserts that virtually 
all of those firms' manufacturing is done in other countries and that 
any domestic manufacturing is limited to samples in non-commercial 
quantities. Based on all available information, we agree that the 
petitioner compromises virtually all domestic commercial production of 
    Our review of the data provided in the petition and other 
information readily available to the Department indicates that the 
petitioner has established industry support representing over 50 
percent of total production of the domestic like product, requiring no 
further action by the Department pursuant to section 732(c)(4)(D) of 
the Act. In addition, the Department received no opposition to the 
petition from domestic producers of the like product. 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) are met. Furthermore, 
the domestic producers or workers who support the petition account for 
more than 50 percent of the production of the domestic like product

[[Page 25334]]

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.
    With regard to the definition of domestic like product, the 
petitioner does not offer a definition of domestic like product 
distinct from the scope of the investigation. On April 30, 2003, 
Circuit Breaker Industries, Ltd. (``CBI''), a South African producer of 
the subject merchandise, challenged industry support for the petition 
pursuant to sections 732(b)(3) and 732(c)(4)(D) of the Act. On May 1, 
2003, the petitioner filed its reply to CBI's challenge.
    Based on our analysis of the information presented by the 
petitioner, we have determined that there is a single domestic like 
product, hydraulic magnetic circuit breakers, which is defined in the 
``Scope of Investigation'' section above, and we have analyzed industry 
support in terms of this domestic like product. For more information on 
our analysis and the data upon which we relied, see Import 
Administration Antidumping Investigation Initiation Checklist 
(``Initiation Checklist''), Industry Support section and Appendix 1, 
dated May 5, 2003, on file in the CRU of the main Department of 
Commerce building.

Period of Investigation

    The anticipated period of investigation is April 1, 2002, through 
March 31, 2003.

Constructed Export Price and Normal Value

    The following is a description of the allegation of sales at less 
than fair value upon which the Department based its decision to 
initiate this investigation. The sources of data for the deductions and 
adjustments relating to U.S. price and normal value are discussed in 
greater detail in the Initiation Checklist dated May 5, 2003. Should 
the need arise to use any of this information as facts available under 
section 776 of the Act, we may reexamine the information and revise the 
margin calculations, if appropriate.

Constructed Export Price

    The petitioner identified CBI and its affiliate CBI, Inc. 
(hereinafter ``CBI USA'') as the primary producer and importer, 
respectively, of the subject merchandise. As the sole South African 
producer of HMCBs, CBI accounts for all exports of HMCBs to the United 
States from South Africa. Therefore, the petitioner established U.S. 
price based on constructed exported price (``CEP''). According to the 
petitioner, CBI's sales in the United States are sold by CBI's 
subsidiary, CBI USA, which holds inventory in its U.S. warehouse prior 
to shipment to unaffiliated buyers. In order to obtain ex-factory 
prices, the petitioner deducted international transportation (by sea) 
and estimated profit and expense mark-up. Because the petitioner did 
not provide adequate support for its profit and expense figure, we 
recalculated the CEPs to not deduct this expense. With this exception, 
we reviewed the information provided regarding CEP and have determined 
that it is adequate and accurate and represents information reasonably 
available to the petitioner (see Initiation Checklist, Re: Less-Than-
Fair-Value Allegation).
    Because the petitioner provided price quotes for actual products 
and we determine that these price quotes are sufficient for initiation 
purposes, we did not use the ITC Dataweb values that petitioner 
provided to estimate dumping margins. To the extent necessary, we will 
consider the appropriateness of the petitioner's alternative during the 
course of this proceeding.

Normal Value

    With respect to normal value, the petitioner provided home-market 
prices at which the foreign like product is offered for sale for 
consumption in the exporting country, adjusted as required by the 
statute. These home market prices were obtained directly from CBI, the 
sole South African producer of the subject merchandise.
    In calculating its estimated margins, the petitioner compared 
prices for single pole B, C, D, and E frame HMCBs sold in the home 
market with similar products offered for sale in the United States by 
CBI USA. For purposes of initiation, however, we made an adjustment to 
the estimated margin calculated for D frame HMCBs. Specifically, the 
petitioner, in its April 14th petition, compared a home market price 
for D-frame HMCBs with an amperage rating between 61 and 100 amperes to 
a U.S. price for D frame HMCBs with an amperage rating between 10 and 
50 amperes. Because the petitioner presented the Department with 
several different home market prices for D frame HMCBs, we have 
recalculated the estimated margin using the home-market price for D-
frame HMCBs with a comparable amperage rating (i.e., between 5 and 60 
amperes). See Initiation Checklist, Re: Normal Value.
    With this exception, we determined that the information the 
petitioner used for the calculation of home-market price is adequate 
and accurate and represents information reasonably available to it.

Fair-Value Comparison

    Based on the data provided by the petitioner, there is reason to 
believe that imports of HMCBs from South Africa are being, or are 
likely to be, sold in the United States at less than fair value. As a 
result of the comparison of CEP to normal value, we recalculated 
estimated dumping margins for imports of HMCBs from South Africa that 
range from 129.43 percent to 721.95 percent.

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 and is threatened with 
material injury by reason of the imports of the subject merchandise 
sold at less than normal value. The petitioner contends that its 
injured condition is evidenced by declining trends in market share, 
pricing, production levels, profits, sales, and utilization of 
capacity. Furthermore, the petitioner contends that injury and threat 
of injury is evidenced by negative effects on its cash flow, ability to 
raise capital, and growth. These allegations are supported by relevant 
evidence including import data, lost sales, and pricing information. 
The Department assessed the allegations and supporting evidence 
regarding material injury and causation and determined that these 
allegations are supported by accurate and adequate evidence and meet 
the statutory requirements for initiation (see Initiation Checklist 
dated May 5, 2003, Re: Material Injury).

Initiation of Antidumping Investigation

    Based upon our examination of the petition on HMCBs from South 
Africa and other information reasonably available to the Department, we 
find that the petition meets the requirements of section 732 of the 
Act. Therefore, we are initiating an antidumping duty investigation to 
determine whether imports of HMCBs from South Africa are being, or are 
likely to be, sold in the United States at less than fair value. Unless 
postponed, we will make our preliminary determination 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 Act, a copy of the 
public version of the petition has been

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provided to the representatives of the government of South Africa. We 
will attempt to provide a copy of the public version of the petition to 
each producer named in the petition, as appropriate.

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, no later than May 29, 2003, 
whether there is a reasonable indication that imports of HMCBs are 
causing material injury, or threatening to cause material injury, to a 
U.S. industry. A negative ITC determination will result in this 
investigation being terminated; otherwise, this investigation will 
proceed according to statutory and regulatory time limits.
    This notice is published pursuant to section 777(i) of the Act.

    Dated: May 5, 2003.
Joseph A. Spetrini,
Acting Assistant Secretaryfor Import Administration.
[FR Doc. 03-11745 Filed 5-9-03; 8:45 am]