[Federal Register: July 2, 2003 (Volume 68, Number 127)]
[Notices]               
[Page 39513-39515]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jy03-38]                         

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-836]

 
Notice of Initiation of Antidumping Duty Investigation: Certain 
Colored Synthetic Organic Oleoresinous Pigment Dispersions from India

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

ACTION: Initiation of Antidumping Duty Investigation.

-----------------------------------------------------------------------

EFFECTIVE DATE: July 2, 2003.

FOR FURTHER INFORMATION CONTACT: Katherine Johnson at (202) 482-4929 or 
Rebecca Trainor at (202) 482-4007, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230.

Initiation of Investigation

The Petition

    On June 5, 2003, the Department of Commerce (``the Department'') 
received a petition filed in proper form by Apollo Colors Inc., General 
Press Colors, Ltd., Magruder Color Company, Inc., and Sun Chemical 
Corporation (collectively, ``the petitioners''). The Department 
received petition supplements on June 16, 18 and 20, 2003.
    In accordance with section 732(b)(1) of the Tariff Act of 1930 
(``the Act''), as amended, the petitioners allege that imports of 
certain colored synthetic organic oleoresinous pigment dispersions 
(``colored pigment dispersions'') from India 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 imports from India are 
materially injuring, or are threatening to materially injure, an 
industry in the United States.
    The Department finds that the petitioners filed this petition on 
behalf of the domestic industry because they are interested parties as 
defined in section 771(9)(C) of the Act and they have demonstrated 
sufficient industry support with respect to the antidumping 
investigation that they are requesting the Department to initiate. See 
infra, ``Determination of Industry Support for the Petition.''

Scope of Investigation

    The products covered by this investigation are colored synthetic 
organic pigment dispersions containing pigments classified in either 
the Azo or Phthalocyanine chemical classes that have been dispersed in 
an oleoresinous varnish comprised of various combinations of solvents, 
oils and resins. The subject pigment dispersions are commonly known as 
``flush'' or ``flushed color,'' but the base form of the subject 
pigment dispersions is also included in the scope of this 
investigation. The subject pigment dispersions are a thick putty or 
paste that contain by weight typically 20 percent or more pigment 
dispersed in the varnish, and are used primarily for the manufacture of 
letterpress and lithographic printing inks. The presence of additives, 
such as surfactants, antioxidants, wetting agents, and driers, in the 
subject pigment dispersions does not exclude them from the scope of 
this investigation.
    Excluded from the scope of this investigation are dry powder 
pigments and pigment press cakes, as well as water and flammable 
solvent based colored pigment dispersions, which typically are used in 
manufacturing liquid or fluid inks. Also excluded is Yellow 75, which 
is typically used to make the yellow paint to line roads.
    The merchandise subject to this investigation is classifiable under 
subheadings 3204.17.6020 (Pigment Blue 15:4), 3204.17.6085 (Pigments 
Red 48:1, Red 48:2, Red 48:3, and Yellow 174), 3204.17.9005 (Pigment 
Blue 15:3), 3204.17.9010 (Pigment Green 7), 3204.17.9015 (Pigment Green 
36), 3204.17.9020 (Pigment Red 57:1), 3204.17.9045 (Pigment Yellow 12), 
3204.17.9050 (Pigment Yellow 13), 3204.17.9055 (Pigment Yellow 74), and 
3204.17.9086\1\ (Pigments Red 22, Red 48:4, Red 49:1, Red 49:2, Red 
52:1, Red 53:1, Yellow 14, and Yellow 83) of the Harmonized Tariff 
Schedule of the United States (``HTS''). Although the HTS subheadings 
are provided for convenience and customs purposes, the written 
description of the merchandise under investigation is dispositive.
---------------------------------------------------------------------------

    \1\ Prior to July 2002, this number was 3204.17.9085.
---------------------------------------------------------------------------

    As discussed in the preamble to the Department's regulations 
(Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 
27323 (May 19, 1997)), we are setting aside a period for parties to 
raise issues regarding product coverage. The Department encourages all 
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, Room 1870, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 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.

Period of Investigation

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

[[Page 39514]]

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 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: (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. 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 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 the law.\2\
---------------------------------------------------------------------------

    \2\ 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 Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition.
    With regard to the definition of domestic like product, the 
petitioner does not offer a definition of domestic like product 
distinct from the scope of the investigation. Based on our analysis of 
the information presented by the petitioners, we have determined that 
there is a single domestic like product, colored pigment dispersions, 
which is defined in the ``Scope of Investigation'' section above, and 
we have analyzed industry support in terms of this domestic like 
product.
    In their initial petition and subsequent submissions, the 
petitioners state that they comprise over 50 percent of U.S. colored 
pigment dispersions production. The petition identifies nine additional 
U.S. companies engaged in the production of colored pigment 
dispersions, none of which have taken a position on (either for or 
against) the petition. Through data provided by the petitioners and our 
own independent research, we have determined that the colored pigment 
dispersions production of these nine companies is not high enough to 
place the petitioners' industry support in jeopardy. Based on all 
available information, we agree that the petitioners comprise over 50 
percent of all domestic colored pigment dispersions production.
    Our review of the data provided in the petition and other 
information readily available to the Department indicates that the 
petitioners have 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) of the Act 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 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. For more 
information on our analysis and the data upon which we relied, see 
Import Administration AD/CVD Enforcement Initiation Checklist 
(``Initiation Checklist''), Industry Support section and Attachment II, 
dated June 25, 2003, on file in the Central Records Unit of the main 
Department of Commerce building.

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 this investigation. The sources of data for the deductions and 
adjustments relating to U.S. price, constructed value (``CV''), and 
factors of production are discussed in greater detail in the Initiation 
Checklist. Should the need arise to use any of this information as 
facts available under section 776 of the Act in our preliminary or 
final determination, we may re-examine the information and revise the 
margin calculations, if appropriate.

Constructed Export Price

    The petitioners alleged that the subject colored pigment 
dispersions produced in India by Hindustan Inks and Resins Ltd. 
(``Hindustan'') (i.e., the largest Indian producer named in the 
petition) were sold in the United States through its affiliate Micro 
Inks. Therefore, the petitioners based U.S. price on constructed export 
price (``CEP''). According to the data provided by the petitioners, in 
the United States Micro Inks sells the subject colored pigment 
dispersions imported from Hindustan in the flush form as imported and 
as further manufactured into printing ink. The petitioners based CEP 
prices for colored pigment dispersions sold as imported on invoice 
prices adjusted for movement expenses, indirect selling expenses, and 
CEP profit. The CEP prices for further manufactured colored pigment 
dispersions were based on Micro Inks' listed prices for printing ink 
adjusted for movement expenses, indirect selling expenses, CEP profit 
and further manufacturing costs. For margin calculation purposes, we 
excluded one of the three prices for the sale of flush colored pigment 
dispersions because we were unable to definitively determine

[[Page 39515]]

from the invoice if the sale was to a U.S. customer.

Normal Value

    The petitioners alleged that neither India nor any third country 
constitutes a viable market on which to base normal value (``NV''). 
Therefore, the petitioners based NV on CV, using the factors of 
production of one of the petitioners, but incorporating values derived 
largely from publicly available Indian data. Specifically, the 
petitioners used the U.S. producer's own consumption rates for raw 
materials, direct labor, electricity, natural gas and water, and 
applied either publicly available Indian prices or the U.S. producer's 
own costs. For certain raw materials and electricity, natural gas and 
water, the petitioners relied upon average market prices obtained from 
publically available sources. To adjust the U.S. producer's costs 
associated with direct labor, the petitioners relied upon the Indian 
labor rate found on the Import Administration website. To calculate 
overhead, selling, general and administrative expense, and financial 
expense, the petitioners relied upon amounts reported in the fiscal 
year 2002 financial statements of Hindustan. The petitioners included 
in CV an amount for profit which was based on the profit from 
Hindustan's fiscal year 2002 financial statements. The petitioners 
converted NV into U.S. dollars using the exchange rates posted on the 
Department's website.
    The estimated dumping margins in the petition for flush form based 
on a comparison between CEP and CV range from 138 percent to 677 
percent.\3\ The estimated dumping margins in the petition for further 
manufactured colored pigment dispersions based on a comparison between 
CEP and CV range from 189 percent to 685 percent.
---------------------------------------------------------------------------

    \3\ The margins associated with the excluded invoice were not 
included in this range. See ``Constructed Export Price'' section 
above.
---------------------------------------------------------------------------

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of certain colored synthetic organic oleoresinous 
pigment dispersions from India are being, or are likely to be, sold at 
less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petitioners allege that the U.S. industry producing the 
domestic like product is being materially injured, or is threatened 
with material injury, by reason of imports from India of the subject 
merchandise sold at less than NV.
    The petitioners contend that the industry's injured condition is 
evident in the declining trends in net operating profits, net sales 
volumes, profit-to-sales ratios, and production employment. The 
allegations of injury and causation are supported by relevant evidence 
including U.S. import data, lost sales, and pricing information. We 
have assessed the allegations and supporting evidence regarding 
material injury and causation, and we have determined that these 
allegations are properly supported by adequate evidence and meet the 
statutory requirements for initiation. See the Initiation Checklist.

Initiation of Antidumping Investigation

    Based upon our examination of the petition on certain colored 
synthetic organic oleoresinous pigment dispersions from India, we have 
found that it meets the requirements of section 732 of the Act. 
Therefore, we are initiating an antidumping duty investigation to 
determine whether imports of certain colored synthetic organic 
oleoresinous pigment dispersions from India 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 Act, 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 provided to the representatives 
of the Government of India. We will attempt to provide a copy of the 
public version of the petition to each exporter named in the petition, 
as provided for under 19 CFR 351.203(C)(2).

ITC 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 July 21, 2003, 
whether there is a reasonable indication that imports of Certain 
Colored Synthetic Organic Oleoresinous Pigment Dispersions from India 
are causing material injury, or threatening to cause material injury, 
to a U.S. industry. A negative ITC determination will result in the 
investigation being terminated, otherwise, this investigation will 
proceed according to statutory and regulatory time limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: June 25, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-16669 Filed 7-1-03; 8:45 am]
BILLING CODE 3510-DS-P