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Notice of Preliminary Determination of Sales at Less Than Fair Value: High and Ultra-High Voltage Ceramic Station Post Insulators from Japan

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Import Administration, International Trade Administration, Department of Commerce.


June 16, 2003.

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Timothy Finn at (202) 482-0065 or Michele Mire at (202) 482-4711, AD/CVD Enforcement Office 4, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230.

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Preliminary Determination

We preliminarily determine that high and ultra-high voltage ceramic station post insulators (HVSPs) from Japan are being sold, or are likely to be sold, in the United States at less than fair value (LTFV), as provided in section 733 of the Tariff Act of 1930, as amended (the Act). The estimated margin of sales at LTFV is shown in the Suspension of Liquidation section of this notice.

Case History

This investigation was initiated on January 21, 2003.1 See Notice of Initiation of Antidumping Duty Investigation: High and Ultra-High Voltage Ceramic Station Post Insulators from Japan, 68 FR 4169 (January 28, 2003) (Initiation Notice). Since the initiation of the investigation, the following events have occurred.

On February 13, 2003, the United States International Trade Commission (ITC) preliminarily determined that there is a reasonable indication that an industry in the United States is materially injured by reason of imports from Japan of HVSPs. See Certain Start Printed Page 35628Ceramic Station Post Insulators from Japan, 68 FR 9723 (February 28, 2003).

On February 3, 2003, and February 28, 2003, we solicited comments from interested parties regarding the criteria to be used for model-matching purposes. Petitioners provided comments on February 10, 2003, February 14, 2003, February 24, 2003, and March 18, 2003. Respondent, NGK Insulators, Ltd. (NGK), provided comments on February 10, 2003, February 14, 2003, February 21, 2003, and March 18, 2003.

On February 28, 2003, the Department issued a complete antidumping duty questionnaire to NGK.2 NGK submitted its Section A questionnaire response on April 4, 2003. On April 11, 2003, the Department requested that NGK report one additional product characteristic, cantilever strength, in its Sections B and C questionnaire responses. On April 18, 2003, NGK withdrew from the antidumping duty investigation and requested that the Department return its Section A questionnaire response. On May 9, 2003, the Department removed the proprietary version of NGK's original Section A questionnaire response from the official record and returned it to NGK. The Department sent a letter to NGK certifying the removal and destruction of all proprietary copies of NGK's Section A questionnaire response. The Department retained the public version of NGK's Section A questionnaire response as part of the public record.

Period of Investigation

The period of investigation (POI) is October 1, 2001, through September 30, 2002. This period corresponds to the four most recent fiscal quarters prior to the date of the filing of the petition (i.e., December 31, 2002).

Scope of Investigation

The scope of this investigation covers station post insulators manufactured of porcelain, of standard strength, high strength, or extra-high strength,3 solid core or cavity core, single unit or stacked unit, assembled or unassembled, and with or without hardware attached, rated at 115 kilovolts (kV) voltage class and above (550 kV Basic Impulse Insulation Level (BIL) and above), including, but not limited to, those manufactured to meet the following American National Standards Institute, Inc. (ANSI) standard class specifications: T.R.-286, T.R.-287, T.R.-288, T.R.-289, T.R.-291, T.R.-295, T.R.-304, T.R.-308, T.R.-312, T.R.-316, T.R.-362 and T.R.-391. Subject merchandise is classifiable under subheading 8546.20.0060 of the Harmonized Tariff Schedule of the United States (HTSUS) Annotated. While the HTSUS subheading is provided for convenience and customs purposes, the written description above remains dispositive as to the scope of the investigation.

Facts Available (FA)

1. Application of FA

Section 776(a)(2) of the Act provides that, if an interested party (A) withholds information requested by the Department, (B) fails to provide such information by the deadline, or in the form or manner requested, (C) significantly impedes a proceeding, or (D) provides information that cannot be verified, the Department shall use, subject to sections 782(d) and (e) of the Act, facts otherwise available in reaching the applicable determination.

Pursuant to section 782(e) of the Act, the Department shall not decline to consider submitted information if all of the following requirements are met: (1) The information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties.

On April 18, 2003, NGK notified the Department that it did not intend to participate further in the Department's investigation and requested the return of all of its business proprietary information. NGK was notified by the Department that failure to submit the requested information by the date specified could result in use of the FA, as required by section 776(a)(2)(B) of the Act and section 351.308 of the Department's regulations. See letters from the Department to respondent dated February 28, 2003, March 20, 2003, April 1, 2003, and April 16, 2003.

As described above, NGK withdrew its response to Section A of the Department's questionnaire, and chose not to respond to Sections B and C. Because NGK withheld information requested by the Department essential to the calculation of dumping margins, we have applied FA to calculate the dumping margin pursuant to section 776(a)(2) of the Act.

2. Selection of Adverse FA (AFA)

In selecting from among the facts otherwise available, section 776(b) of the Act authorizes the Department to use an adverse inference if the Department finds that an interested party failed to cooperate by not acting to the best of its ability to comply with the request for information. See, e.g., Certain Welded Carbon Steel Pipes and Tubes From Thailand: Final Results of Antidumping Duty Administrative Review, 62 FR 53808, 53819-20 (October 16, 1997). As a general matter, it is reasonable for the Department to assume that NGK possessed the records necessary for the Department to complete its investigation. Therefore, by withdrawing some of the information the Department requested, and declining to submit the remainder of the requested information, NGK failed to cooperate to the best of its ability. As NGK failed to cooperate to the best of its ability, we are applying an adverse inference pursuant to section 776(b) of the Act.

3. Corroboration of Information

Section 776(b) of the Act authorizes the Department to use as AFA information derived from the petition, the final determination from the LTFV investigation, a previous administrative review, or any other information placed on the record. In this case, we have used the dumping margin alleged in the petition as AFA.

Section 776(c) of the Act requires the Department to corroborate, to the extent practicable, secondary information used as FA. Secondary information is defined as “{i}nformation derived from the petition that gave rise to the investigation or review, the final determination concerning the subject merchandise, or any previous review under section 751 concerning the subject merchandise.” See Statement of Administrative Action (SAA) accompanying the Uruguay Round Start Printed Page 35629Agreements Act (URAA), H.R. Doc. No. 103-316 at 870 (1994), and 19 CFR 351.308(d).

The SAA clarifies that “corroborate” means that the Department will satisfy itself that the secondary information to be used has probative value (see SAA at 870). The SAA also states that independent sources used to corroborate such evidence may include, for example, published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation. Id.

In order to determine the probative value of the petition margin, we examined evidence supporting the calculation of the antidumping duty margin in the petition. We reviewed the adequacy and accuracy of the information in the petition during our pre-initiation analysis of the petition, to the extent appropriate information was available for this purpose. See AD Investigation Checklist, dated January 21, 2003 (Initiation Checklist) for a discussion of the margin calculation in the petition (public version is on file in Import Administration's Central Record Unit (CRU) of the Department of Commerce, Room B-099). In addition, in accordance with section 776(c) of the Act, to the extent practicable, we examined the key elements of the constructed export price (CEP) and normal value (NV) calculations on which the margin in the petition was based.

Constructed Export Price

With respect to the margin in the petition, CEP was based on two price quotes for NGK merchandise during the POI. The petitioners calculated net U.S. price by deducting from the starting price U.S. sales commissions, inventory carrying costs, U.S. warehousing expenses, U.S. imputed credit expenses, foreign inland freight, ocean freight, U.S. customs duty and fees, U.S. inland freight, U.S. indirect selling expenses, and an amount for CEP profit. See Initiation Checklist.

With regard to the CEP contained in the petition, the Department has no information from the respondent and is aware of no other independent sources of information that would enable us to further corroborate the CEP. See Initiation Checklist. Notably, the implementing regulation for section 776 of the Act states, “(t)he fact that corroboration may not be practicable in a given circumstance will not prevent the Secretary from applying an adverse inference as appropriate and using secondary information in question.” See 19 CFR 351.308(d). Additionally, the SAA at 870 specifically states that where “corroboration may not be practicable in a given circumstance, the Department need not prove that the facts available are the best alternative information.” Therefore, based on our efforts, described above, to corroborate information contained in the petition, and in accordance with section 776(c) of the Act, we consider the CEP based on the petition to be corroborated to the extent practicable for purposes of this preliminary determination.

Normal Value

The petitioners calculated NV based on home market price quotes that were obtained through foreign market research. These prices quotes, which were made during the POI, are for subject merchandise of the same grade as that of the merchandise for which the U.S. price quotes for CEP were obtained. See Initiation Checklist. With regard to the NV contained in the petition, as with the CEP contained in the petition, the Department has no information from the respondent and is aware of no other independent sources of information that would enable us to further corroborate NV.

Accordingly, in selecting AFA with respect to NGK, the Department applied the petition dumping margin of 105.8 percent.

All Others

Section 735(c)(5)(B) of the Act provides that, where the estimated weighted-average dumping margins established for all exporters and producers individually investigated are zero or de minimis, or are determined entirely under section 776 of the Act, the Department may use any reasonable method to establish the estimated “all others” rate for exporters and producers not individually investigated. This provision contemplates that the Department may weight-average margins other than zero, de minimis, and FA margins to establish the “all others” rate. Where the data do not permit weight-averaging such rates, the SAA, at 873, provides that we may use other reasonable methods. Because the petition contained only an estimated price-to-price dumping margin, there are no other estimated margins available with which to create the “all others” rate. Therefore, we applied the petition margin of 105.8 percent as the “all others” rate. See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products From Indonesia, 66 FR 22163 (May 3, 2001).

Suspension of Liquidation

In accordance with section 733(d) of the Act, we are directing the U.S. Bureau of Customs and Border Protection (BCBP) to suspend liquidation of all imports of HVSPs from Japan entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. We will instruct the BCBP to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the normal value exceeds the U.S. price, as indicated below. These suspension of liquidation instructions will remain in effect until further notice.

Manufacturer/ExporterWeighted-Average Percent Margin
NGK Insulators, Ltd.105.8 percent
All Others105.8 percent

ITC Notification

In accordance with section 733(f) of the Act, we have notified the ITC of our determination. If our final antidumping determination is affirmative, the ITC will determine whether these imports are materially injuring, or threaten material injury to, the U.S. industry. The deadline for that ITC determination is the later of 120 days after the date of this preliminary determination or 45 days after the date of our final determination.

Public Comment

For the investigation of HVSPs from Japan, case briefs must be submitted no later than 30 days after the publication of this notice in the Federal Register. Rebuttal briefs must be filed within five calendar days after the deadline for submission of case briefs. A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes. Public versions of all comments and rebuttals should be Start Printed Page 35630provided to the Department and made available on diskette. Section 774 of the Act provides that the Department will hold a hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by any interested party. If a request for a hearing is made in an investigation, the hearing will tentatively be held two days after the deadline for submission of the rebuttal briefs, at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230. Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time.

Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request within 30 days of the publication of this notice. Requests should specify the number of participants and provide a list of the issues to be discussed. Oral presentations will be limited to issues raised in the briefs. If this investigation proceeds normally, we will make our final determination in the investigation of HVSPs from Japan no later than 75 days after the date of this preliminary determination.

This determination is issued and published pursuant to sections 733(f) and 777(i)(1) of the Act.

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Dated: June 6, 2003.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

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1.  The petitioners in this investigation are Lapp Insulator Company LLC (Lapp), Newell Porcelain Co., Inc. (Newell), Victor Insulators, Inc. (Victor), and the IUE Industrial Division of the Communications Workers of America, the union representing employees of Lapp (collectively, the petitioners).

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2.  Section A of the questionnaire requests general information concerning a company's corporate structure and business practices, the merchandise under investigation that it sells, and the manner in which it sells that merchandise in all of its markets. Section B requests a complete listing of all home market sales, or, if the home market is not viable, of sales in the most appropriate third-country market (this section is not applicable to respondents in non-market economy (NME) cases). Section C requests a complete listing of U.S. sales. Section D requests information on the cost of production (COP) of the foreign like product and the constructed value (CV) of the merchandise under investigation. Section E requests information on further manufacturing.

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3.  Station post insulators are manufactured in various styles and sizes, and are classified primarily according to the voltage they are designed to withstand. Under the governing industry standard issued by the Institute of Electrical and Electronic Engineers (IEEE), the voltage spectrum is divided into three broad classes: “medium” voltage (i.e., less than or equal to 69 kilovolts), “high” voltage (i.e., from 115 to 230 kilovolts), and “extra-high” or “ultra-high” voltage (i.e., greater than 230 kilovolts).

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[FR Doc. 03-15149 Filed 6-13-03; 8:45 am]