Import Administration, International Trade Administration, Department of Commerce.
December 5, 2007.
Brian Smith (Federal Republic of Germany) or Magd Zalok (People's Republic of China), AD/CVD Operations, Offices 2 and 4, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482–1766 or (202) 482–4162, respectively.
On November 8, 2007, the Department of Commerce (the Department) received petitions concerning imports of sodium nitrite from the Federal Republic of Germany (Germany) (German petition) and the People's Republic of China (PRC) (PRC petition) filed in proper form by General Chemical LLC (petitioner).
In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), the petitioner alleges that imports of sodium nitrite from Germany and the PRC 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, or threatening material injury to, an industry in the United States.
The Department finds that the petitioner filed these petitions on behalf of the domestic industry because the
The merchandise covered by each of these investigations is sodium nitrite in any form, at any purity level. In addition, the sodium nitrite covered by these investigations may or may not contain an anti–caking agent. Examples of names commonly used to reference sodium nitrite are nitrous acid, sodium salt, anti–rust, diazotizing salts, erinitrit, and filmerine. The chemical composition of sodium nitrite is NaNO2 and it is generally classified under subheading 2834.10.1000 of the Harmonized Tariff Schedule of the United States (HTSUS). The American Chemical Society Chemical Abstract Service (CAS) has assigned the name “sodium nitrite” to sodium nitrite. The CAS registry number is 7632–00–0.
While the HTSUS subheading, CAS registry number, and CAS name are provided for convenience and customs purposes, the written description of the scope of these investigations is dispositive.
During our review of the petitions, 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 regulations (
We are requesting comments from interested parties regarding the appropriate physical characteristics of sodium nitrite to be reported in response to the Department's antidumping questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to more accurately report the relevant factors and costs of production, as well as to develop appropriate product comparison criteria.
Interested parties may provide any information or comments that they feel are relevant to the development of an accurate listing of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as 1) general product characteristics and 2) the product comparison criteria. We note that it is not always appropriate to use all product characteristics as product comparison criteria. We base product comparison criteria on meaningful commercial differences among products. In other words, while there may be some physical product characteristics utilized by manufacturers to describe sodium nitrite, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in product matching. Generally, the Department attempts to list the most important physical characteristics first and the least important characteristics last.
In order to consider the suggestions of interested parties in developing and issuing the antidumping duty questionnaires, we must receive comments at the above–referenced address by December 18, 2007. Additionally, rebuttal comments must be received by December 28, 2007.
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 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 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 as a whole 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 law.
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 subtitle.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation,” (
With regard to the 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 submitted on the record, we have determined that sodium nitrite constitutes a single domestic like product and we have analyzed industry support in terms of that domestic like product. For a discussion of the domestic like product analysis in this case,
Our review of the data provided in the petitions, supplemental submissions, and other information readily available to the Department indicates that the petitioner has established industry support. To establish industry support, the petitioner demonstrated that it was the sole producer of the domestic like product in 2006. Therefore, the petitions established support from domestic producers (or workers) accounting for more than 50 percent of the total production of the domestic like product and, as such, the Department is not required to take further action in order to evaluate industry support (
The Department finds that the petitioner filed the petitions 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 with respect to the antidumping investigations that it is requesting the Department initiate.
The petitioner alleges that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at less than normal value (NV). The petitioner contends that the industry's injured condition is illustrated by reduced market share, lost sales, reduced production, capacity and capacity utilization rate, reduced shipments, underselling and price depressing and suppressing effects, lost revenue, reduced employment, decline in financial performance, and an increase in import penetration. 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.
The following is a description of the allegations of sales at less than fair value upon which the Department based its decision to initiate these investigations of imports of sodium nitrite from Germany and the PRC. The sources of data for the deductions and adjustments relating to the U.S. price, constructed value (CV) (for Germany), and the factors of production (for the PRC) are also discussed in the country–specific initiation checklists.
The petitioner calculated three CEPs based on price quotes during the POI obtained from U.S. distributors for German–produced sodium nitrite. The petitioner also calculated an EP using the average unit customs value (AUV) of imports of subject merchandise from Germany during the POI derived from U.S. Census Bureau import statistics. Specifically, for CEPs based on price quotes, the petitioner made adjustments to the starting price, where applicable, for discounts, foreign inland freight, ocean freight, marine insurance, U.S. inland freight and trans–loading fees, U.S. customs and port fees, and warehousing expenses. The petitioner calculated foreign inland freight, ocean freight, marine insurance, U.S. inland freight and trans–loading fees, and warehousing expenses based on price quotes obtained from custom brokers, freight forwarders, and other service providers. U.S. customs and port fees (
With respect to NV, the petitioner states that neither home–market prices nor third–country prices of German–produced sodium nitrite were reasonably available. According to the petitioner, it was unsuccessful in obtaining such pricing information, despite its best efforts.
Pursuant to section 773(e) of the Act, CV consists of the cost of manufacture
Raw material (
The petitioner determined labor costs using the labor inputs derived from its own experience which it valued using an industrial German wage rate obtained from the International Labour Organization's “Laborsta” database at http://laborsta.ilo.org.
The petitioner determined energy costs (
To calculate factory overhead, the petitioner relied on its own experience (excluding depreciation) and on a German sodium nitrite producer's parent company's consolidated financial data (for depreciation).
To calculate SG&A expenses and profit, the petitioner relied on a German sodium nitrite producer's parent company's consolidated financial data, for the fiscal year ending December 31, 2006, the period most contemporaneous with the POI for which the petitioner was able to obtain such information.
The petitioner calculated three EPs from price quotes for sodium nitrite manufactured in the PRC
The petitioner stated that the PRC is a non–market economy (NME) country and no determination to the contrary has been made by the Department. Recently, the Department examined the PRC's status and determined that NME status should continue for the PRC.
The petitioner selected India as the surrogate market economy country. The petitioner claimed, pursuant to section 773(c)(4) of the Act, that India is an appropriate surrogate country because it is at a level of economic development comparable to that of the PRC and is a significant producer of sodium nitrite.
The petitioner calculated NVs for each U.S. price discussed above using the NME methodology required by 19 CFR 351.202(b)(7)(i)(C) and 19 CFR 351.408. Because the quantities of
The petitioner based the value of material inputs on official Indian trade statistics from the Indian Department of Commerce's Export–Import Data Bank and prices in the periodical,
The petitioner was unable to obtain surrogate values that were contemporaneous with the POI for all material inputs and, accordingly, it relied upon the most recently available information. Where a surrogate value was in effect during a period preceding the POI, the petitioner adjusted it using the Indian wholesale price index in the publication,
The petitioner based factory overhead expenses, SG&A expenses, and profit on data from an Indian sodium nitrite producer, Deepak Nitrite Limited. The data comes from Deepak Nitrite Limited's most recently available financial statement which covers the period April 1, 2006, through March 31, 2007.
Based on the data provided by the petitioner, there is reason to believe that imports of sodium nitrite from Germany and the PRC are being, or are likely to be, sold in the United States at less than fair value. Based on a comparison of CEP and CV, calculated in accordance with section 773(a)(4) of the Act, the revised estimated dumping margins for sodium nitrite from Germany range from 65.58 to 151.98 percent. Based on a comparison of EP and CV, calculated in accordance with section 773(a)(4) of the Act, the estimated dumping margin for sodium nitrite from Germany is 237 percent.
Based upon the examination of the petitions on sodium nitrite from Germany and the PRC, the Department finds that the petitions meet the requirements of section 732 of the Act. Therefore, we are initiating antidumping duty investigations to determine whether imports of sodium nitrite from Germany and the PRC are being, or are likely to be, sold in the United States at less than fair value. In accordance with section 733(b)(1)(A) of the Act, unless postponed, we will make our preliminary determinations no later than 140 days after the date of this initiation.
In order to obtain separate–rate status in NME investigations, exporters and producers must submit a separate–rate status application.
For these investigations, the Department intends to select respondents based on U.S. Customs and Border Protection (CBP) data for U.S. imports under HTSUS number 2834.10.1000 during the POI. We intend to make our decisions regarding respondent selection within 20 days of publication of this
The Department will calculate combination rates for certain respondents that are eligible for a separate rate in this investigation. The Separate Rates and Combination Rates Bulletin, states:
{w}hile continuing the practice of assigning separate rates only to exporters, all separate rates that the Department will now assign in its NME investigations will be specific to those producers that supplied the exporter during the period of
In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public versions of the petitions have been provided to the representatives of the Governments of Germany and the PRC. We will attempt to provide a copy of the public version of the petitions to the foreign producers/exporters, consistent with 19 CFR 351.203(c)(2).
We have notified the ITC of our initiations, as required by section 732(d) of the Act.
The ITC will preliminarily determine, no later than December 24, 2007, whether there is a reasonable indication that imports of sodium nitrite from Germany and the PRC are materially injuring, or threatening material injury to, a U.S. industry. A negative ITC determination with respect to either of the investigations will result in that investigation being terminated; 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 Act.