Commodity Matchbooks From India: Initiation of Countervailing Duty Investigation, 70968-70971 [E8-27875]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 227 (Monday, November 24, 2008)]
[Notices]
[Pages 70968-70971]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-27875]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-533-849]


Commodity Matchbooks From India: Initiation of Countervailing 
Duty Investigation

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

DATES: Effective Date: November 24, 2008.

FOR FURTHER INFORMATION CONTACT: Sean Carey or Paul Matino, AD/CVD 
Operations, Office 6, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3964 and (202) 482-4146, respectively.

SUPPLEMENTARY INFORMATION:

The Petition

    On October 29, 2008, the Department of Commerce (the Department) 
received a petition on commodity matchbooks from India filed in proper 
form by D.D. Bean & Sons Co. (Petitioner), a domestic producer of 
commodity matchbooks. On November 3, 2008, the Department

[[Page 70969]]

issued requests for additional information and clarification of certain 
areas of the petition involving general issues. Based on the 
Department's request, Petitioner timely filed additional information 
concerning the petition on November 6, 2008. On November 5, 2008, the 
Department issued requests for additional information and clarification 
of some of the subsidy allegations. Based on the Department's requests, 
Petitioner timely filed the requested additional information on 
November 10, 2008.
    On November 13, 2008, the Government of India (GOI), an interested 
party to this proceeding as defined in section 771(9)(B) of the Tariff 
Act of 1930, as amended (the Act), submitted a letter challenging the 
definition of the domestic like product in analyzing industry support. 
On November 17, 2008, Petitioner filed its reply to this challenge.
    In accordance with section 702(b)(1) of the Act, Petitioner alleges 
that manufacturers, producers or exporters of commodity matchbooks in 
India receive countervailable subsidies within the meaning of section 
701 of the Act, and that imports of commodity matchbooks materially 
injure, or threaten material injury to, an industry in the United 
States.
    The Department finds that Petitioner filed this petition on behalf 
of the domestic industry because it is an interested party as defined 
in section 771(9)(C) of the Act, and Petitioner has demonstrated 
sufficient industry support with respect to the countervailing duty 
investigation that it is requesting the Department to initiate (see 
infra, ``Determination of Industry Support for the Petition'').

Period of Investigation

    The period of investigation (POI) is January 1, 2007, through 
December 31, 2007, or the most recently completed fiscal year for the 
GOI and the producers and exporters under investigation, provided the 
GOI and the companies have the same fiscal year. See 19 CFR 
351.204(b)(2).

Scope of Investigation

    The merchandise covered by this investigation is commodity 
matchbooks. See Attachment I to this notice for a complete description 
of the merchandise covered by this investigation.

Comments on Scope of the Investigation

    During our review of the petition, we discussed the scope with 
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 setting aside a 
period for interested parties to raise issues regarding product 
coverage. See Antidumping Duties; Countervailing Duties; Final Rule, 62 
FR 27296, 27323 (May 19, 1997). The Department encourages all 
interested parties to submit such comments within 20 calendar days of 
the publication of this notice. Comments should be addressed to Import 
Administration's Central Records Unit (CRU), 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 to 
consult with parties prior to the issuance of the preliminary 
determination.

Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department 
invited representatives of the GOI for consultations with respect to 
the countervailing duty petition. The Department held these 
consultations on November 17, 2008. See Memorandum to the File, 
Consultations with the Government of India Regarding the Countervailing 
Duty Petition on Commodity Matchbooks from India, November 17, 2008, 
and on file in the CRU, Room 1117 of the main Department of Commerce 
building.

Determination of Industry Support for the Petition

    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(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 702(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 U.S. 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. See USEC, Inc. v. United States, 132 F. 
Supp. 2d 1, 8 (CIT 2001), citing Algoma Steel Corp. Ltd. v. United 
States, 688 F. Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 
1989), cert. denied, 492 U.S. 919 (1989).
    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 domestic like product, Petitioner does not offer 
a definition of domestic like product distinct from the scope of the 
investigation. On November 13, 2008, the GOI submitted a letter 
challenging the definition of the domestic like product. See the GOI's 
November 13, 2008 letter. On November 17, 2008, Petitioner filed its 
reply to this challenge. We have analyzed these comments, and based on 
our analysis all of the information submitted on the record, we have 
determined that commodity matchbooks as defined by Petitioner 
constitute 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, see Countervailing Duty 
Investigation Initiation Checklist: Commodity Matchbooks from India 
(Initiation Checklist), at Attachment II (Analysis of Industry Support 
for the

[[Page 70970]]

Petition), on file in the CRU, Room 1117 of the main Department of 
Commerce building.
    With regard to section 702(c)(4)(A), in determining whether 
Petitioner has standing, (i.e. , those domestic workers and producers 
supporting 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), we considered the industry support data contained in the 
petition with reference to the domestic like product as defined in the 
``Scope of Investigation'' section above. According to Petitioner, 
there are three producers of the domestic like product: itself; Bradley 
Industries, LLC; and Atlas Match Corp., LLC. (Atlas Match Corp. is 
owned by Bradley Industries, LLC.) To establish industry support, 
Petitioner provided its production of the domestic like product for 
calendar year 2007. In addition, Bradley Industries, LLC, provided a 
letter of support for the petition and included its production figures 
for calendar year 2007. See Petition at 3; see also Letter of Support 
filed by Bradley Industries, LLC, on October 31, 2008. We have relied 
upon data provided by Petitioner and supporters of the petition for 
purposes of measuring industry support. For further discussion, see 
Initiation Checklist at Attachment II.
    The Department's review of the data provided in the petition, and 
other information readily available to the Department, indicates that 
Petitioner has established industry support. First, the petition 
establishes 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 (e.g., polling). See 
Section 702(c)(4)(D) of the Act and Initiation Checklist at Attachment 
II. Second, the domestic producers (or workers) have met the statutory 
criteria for industry support under section 702(c)(4)(A)(i) of the Act 
because the domestic producers (or workers) who support the petition 
account for at least 25 percent of the total production of the domestic 
like product. See Initiation Checklist at Attachment II. Finally, the 
domestic producers (or workers) have met the statutory criteria for 
industry support under section 702(c)(4)(A)(ii) of the Act because 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. Accordingly, the Department determines 
that the petition was filed on behalf of the domestic industry within 
the meaning of section 702(b)(1) of the Act. See Initiation Checklist 
at Attachment II.
    The Department finds that Petitioner filed the petition on behalf 
of the domestic industry because it is an interested party as defined 
in section 771(9)(C) of the Act and has demonstrated sufficient 
industry support with respect to the countervailing duty investigation 
that it is requesting the Department initiate. See Initiation Checklist 
at Attachment II.

Injury Test

    Because India is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, section 701(a)(2) of the Act 
applies to this investigation. Accordingly, the ITC must determine 
whether imports of the subject merchandise from India materially 
injures, or threatens material injury to, a U.S. industry.

Allegations and Evidence of Material Injury and Causation

    Petitioner alleges that imports of commodity matchbooks from India 
are benefitting from countervailable subsidies and that such imports 
are causing or threaten to cause, material injury to the domestic 
industry producing commodity matchbooks. In addition, Petitioner 
alleges that subject imports exceed the negligibility threshold 
provided for under section 771(24)(A) of the Act.
    Petitioner contends that the industry's injured condition is 
illustrated by reduced market share, underselling and price depressing 
and suppressing effects, lost sales and revenue, reduced production and 
capacity utilization, reduced shipments, reduced employment, and an 
overall decline in financial performance. We have assessed the 
allegations and supporting evidence regarding material injury, threat 
of 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 Initiation Checklist at 
Attachment III (Analysis of Allegations and Evidence of Material Injury 
and Causation for the Petition).

Subsidy Allegations

    Section 702(b) of the Act requires the Department to initiate a 
countervailing duty proceeding whenever an interested party files a 
petition on behalf of an industry that: (1) Alleges the elements 
necessary for an imposition of a duty under section 701(a) of the Act; 
and (2) is accompanied by information reasonably available to 
Petitioner supporting the allegations. The Department has examined the 
countervailing duty petition on commodity matchbooks from India and 
found that it complies with the requirements of section 702(b) of the 
Act. Therefore, in accordance with section 702(b) of the Act, we are 
initiating a countervailing duty investigation to determine whether 
manufacturers, producers, or exporters of commodity matchbooks from 
India receive countervailable subsidies. For a discussion of evidence 
supporting our initiation determination, see Initiation Checklist.
    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers or exporters of the subject merchandise:

A. Export Oriented Unit Scheme
    1. Duty-Free Import of Capital Goods and Raw Materials
    2. Reimbursement of Central Sales Tax Paid on Goods Manufactured in 
India
    3. Duty Drawback on Fuel Procured from Domestic Oil Companies
    4. Exemption from Income Tax under Sections 10A and 10B of Income 
Tax Act
B. Export Promotion Capital Goods Scheme
C. Duty Entitlement Passbook Scheme
D. Advance License Program
E. Duty Free Import Authorization Scheme
F. Pre-Shipment and Post-Shipment Export Financing
    For further information explaining why the Department is 
investigating these programs, see Initiation Checklist.
    We are not including in our investigation the following program 
alleged to benefit producers and exporters of the subject merchandise 
in the GOI: Exemption from Payment of Central Excise Duty on Goods 
Procured from a Domestic Tariff Area for Goods Manufactured in India. 
For further explanation of the Department's decision not to investigate 
this program, see Initiation Checklist.

Respondent Selection

    Petitioner claims that there is only one Indian producer/exporter 
of commodity matchbooks that shipped to the United States during the 
proposed POI. The Department intends to release U.S. Customs and Border 
Protection (CBP) data under Administrative Protective Order (APO) to 
all parties

[[Page 70971]]

with access to information protected by APO within five days of 
publication of this Federal Register notice. The Department invites 
comments regarding the CBP data and respondent selection within seven 
days of publication of this Federal Register notice.

Distribution of Copies of the Petition

    In accordance with section 702(b)(4)(A)(i) of the Act, a copy of 
the public version of the petition has been provided to the GOI. To the 
extent practicable, we will attempt to provide a copy of the public 
version of the petition to each exporter named in the petition, as 
provided under 19 CFR 351.203(c)(2).

ITC Notification

    We have notified the ITC of our initiation, as required by section 
702(d) of the Act.

Preliminary Determination by the ITC

    The ITC will preliminarily determine, within 25 days after the date 
on which it receives notice of the initiation, whether there is 
reasonable indication that imports of subsidized commodity matchbooks 
from India are causing material injury, or threatening to cause 
material injury, to a U.S. industry. See Section 703(a)(2) of the Act. 
A negative ITC determination will result in the investigation being 
terminated; otherwise, the 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: November 18, 2008.
Stephen J. Claeys,
Deputy Assistant Secretary, for Antidumping and Countervailing Duty 
Operations.

Attachment I

Scope of the Investigation Covering Commodity Matchbooks from India

    The scope of this investigation covers commodity matchbooks, also 
known as commodity book matches, paper matches or booklet matches.\1\ 
Commodity matchbooks typically, but do not necessarily, consist of 
twenty match stems which are usually made from paperboard or similar 
material tipped with a match head composed of any chemical formula. The 
match stems may be stitched, stapled or otherwise fastened into a 
matchbook cover of any material, on which a striking strip composed of 
any chemical formula has been applied to assist in the ignition 
process.
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    \1\ Such commodity matchbooks are also referred to as ``for 
resale'' because they always enter into retail channels, meaning 
businesses that sell a general variety of tangible merchandise, e.g. 
convenience stores, supermarkets, dollar stores, drug stores and 
mass merchandisers.
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    Commodity matchbooks included in the scope of this investigation 
may or may not contain printing. For example, they may have no printing 
other than the identification of the manufacturer or importer. 
Commodity matchbooks may also be printed with a generic message such as 
``Thank You'' or a generic image such as the American Flag, with store 
brands (e.g., Kroger, 7-Eleven, Shurfine or Giant); product brands for 
national or regional advertisers such as cigarettes or alcoholic 
beverages; or with corporate brands for national or regional 
distributors (e.g., Penley Corp. or Diamond Brands). They all enter 
retail distribution channels. Regardless of the materials used for the 
stems of the matches and regardless of the way the match stems are 
fastened to the matchbook cover, all commodity matchbooks are included 
in the scope of this investigation.
    All matchbooks, including commodity matchbooks, typically comply 
with the United States Consumer Product Safety Commission (CPSC) Safety 
Standard for Matchbooks, codified at 16 CFR 1202.1 et. seq.
    The scope of this investigation excludes promotional matchbooks, 
often referred to as ``not for resale,'' or ``specialty advertising'' 
matchbooks, as they do not enter into retail channels and are sold to 
businesses that provide hospitality, dining, drinking or entertainment 
services to their customers, and are given away by these businesses as 
promotional items. Such promotional matchbooks are distinguished by the 
physical characteristic of having the name and/or logo of a bar, 
restaurant, resort, hotel, club, cafe coffee shop, grill, pub, eatery, 
lounge, casino, barbecue or individual establishment printed 
prominently on the matchbook cover. Promotional matchbook cover 
printing also typically includes the address and the phone number of 
the business or establishment being promoted.\2\ Also excluded are all 
other matches that are not fastened into a matchbook cover such as 
wooden matches, stick matches, box matches, kitchen matches, pocket 
matches, penny matches, household matches, strike-anywhere matches (aka 
``SAW'' matches), strike-on-box matches (aka ``SOB'' matches), 
fireplace matches, barbeque/grill matches, fire starters, and wax 
matches.
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    \2\ The gross distinctions between commodity matchbooks and 
promotional matchbooks may be summarized as follows: (1) If it has 
not printing, or is printed with a generic message such as ``Thank 
You'' or a generic image such as the American Flag, or printed with 
national or regional store brands or corporate brands, it is 
commodity; (2) if it has printing, and the printing includes the 
name of a bar, restaurant, resort, hotel, club, caf[eacute]/coffee 
shop, grill, pub, eatery, lounge, casino, barbecue, or individual 
establishment prominently displayed on the matchbook cover, it is 
promotional.
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    The merchandise subject to this investigation is properly 
classified under subheading 3605.00.0060 of the Harmonized Tariff 
Schedule of the United States (HTSUS). Subject merchandise may also 
enter under subheading 3605.00.0030 of the HTSUS. Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the merchandise under investigation is 
dispositive.

 [FR Doc. E8-27875 Filed 11-21-08; 8:45 am]
BILLING CODE 3510-DS-P