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sroberts on PROD1PC70 with NOTICES

Federal Register /

Vol. 71, No. 227 / Monday, November 27, 2006 / Notices


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 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. See Indonesia Initiation Checklist at Attachment II, Korea Initiation Checklist at Attachment II, and PRC Initiation Checklist at Attachment II.

Allegations and Evidence of Material Injury and Causation

With regard to Indonesia, Korea, and the PRC, the petitioner 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 individual and cumulated imports of the subject merchandise sold at less than fair value. The petitioner contends that the industrys injury is evidenced by reduced market share, increased inventories, reduced shipments, lost sales, reduced production, lower capacity and capacity utilization rates, decline in prices, lost revenue, reduced employment, and a decline in financial performance.

These allegations are supported by relevant evidence including import data, evidence of lost sales, and pricing information. We assessed the allegations and supporting evidence regarding material injury, threat of material injury, and causation, and have determined that these allegations are supported by accurate and adequate evidence and meet the statutory requirements for initiation. See Indonesia Initiation Checklist at Attachment III, Korea Initiation Checklist at Attachment III, and PRC Initiation Checklist Attachment III.

Allegations of Sales at Less Than Fair Value

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 on imports of CFS from Indonesia, Korea, and the PRC. The sources of data for the deductions and adjustments relating to the U.S. price, constructed value (CV) (for Indonesia and Korea), and the factors of production (for the PRC only) are also discussed in the

country-specific initiation checklists. See Indonesia Initiation Checklist, Korea Initiation Checklist, and PRC 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 determinations, we will reexamine the information and revise the margin calculations, if appropriate.

Indonesia and Korea Export Price (EP)

The petitioner calculated a single EP using the average unit values (AUVs) for import data collected by the U.S. Census Bureau for both Indonesia and Korea. The petitioner used a weighted average of two HTSUS numbers under which CFS is imported into the United States and that fall within the scope of the investigations. These HTSUS numbers contain imports of products which were most similar to the product on which the petitioner based normal value (NV) in the Indonesian and Korean petitions: 4810.14.19.00 and 4810. In addition, these HTSUS numbers account for 48 percent of the volume of imports from Indonesia and 45 percent of the volume of imports from Korea. To be conservative, the petitioner did not make any adjustments to U.S. price.

Use of a Third Country Market and Sales Below Cost Allegation

With respect to NV, the petitioner stated that home market prices in Indonesia and Korea were not reasonably available. According to the petitioner, market intelligence in these countries is very difficult to obtain and sources of this information were either unable or unwilling to provide such data. The petitioner stated that it queried all available sources to identify Indonesian and Korean home market pricing data but was unsuccessful in its attempts. See e.g., page 2 of the October 31, 2006, Indonesian petition and pages 1 and 2 of the November 9, 2006, supplement to the Indonesian petition; and page 2 of the October 31, 2006, Korean petition and page 1 of the November 9, 2006, supplement to the Korean petition.

Consequently, for Indonesia and Korea, the petitioner used statistics on Indonesias and Koreas third-country exports based on official Indonesian and Korean export data for determining NV. In selecting the third-country market, the petitioner chose Malaysia for Indonesia, and Australia and

The petitioner based the AUV on customs data for the period October 1, 2005, through August 30, 2006, the most recently available data for the POI at the time of the petition filing. 2

Bangladesh for Korea because: (1) These countries represent the largest third- country markets (for Indonesia and Korea, respectively) for scope merchandise during the POI; (2) the aggregate quantity of scope merchandise sold by Indonesian exporters to Malaysia, and Korean exporters to Australia and Bangladesh, accounted for more than five percent of the aggregate quantity of the scope merchandise sold in the United States; and (3) the product sold to the Malaysian market (for Indonesia) and to the Australian and Bangladeshi markets (for Korea) is comparable to the product that served as the basis for EP. After examining this evidence, we found the selection of Malaysia for Indonesia, and Australia and Bangladesh for Korea, as the comparison market to be reasonable.

The petitioner calculated third- country price for Indonesia and Korea using quantities and FOB values from official Indonesian and Korean export statistics.

The petitioner has provided information demonstrating reasonable grounds to believe or suspect that sales of CFS in the comparison markets (i.e., Malaysia for Indonesia, and Australia and Bangladesh for Korea) were made at prices below the fully absorbed cost of production (COP), within the meaning of section 773(b) of the Act, and requested that the Department conduct country-wide sales-below-cost investigations. The Statement of Administrative Action (SAA), submitted to the Congress in connection with the interpretation and application of the URAA, states that an allegation of sales below COP need not be specific to individual exporters or producers. See SAA, H.R. Doc. No. 103316 at 833 (1994). The SAA, at 833, states that ‘‘Commerce will consider allegations of below-cost sales in the aggregate for a foreign country, just as Commerce currently considers allegations of sales at less than fair value on a country-wide basis for purposes of initiating an antidumping investigation.’’

Further, the SAA provides that section 773(b)(2)(A) of the Act retains the requirement that the Department have ‘‘reasonable grounds to believe or suspect’’ that below-cost sales have occurred before initiating such an investigation. Reasonable grounds exist when an interested party provides specific factual information on costs and prices, observed or constructed, indicating that sales in the foreign market in question are at below-cost prices. Id.

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