Commodity Matchbooks from India: Initiation of Antidumping Duty Investigation, 70965-70968 [E8-27893]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 227 (Monday, November 24, 2008)]
[Notices]
[Pages 70965-70968]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-27893]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-533-848)


Commodity Matchbooks from India: Initiation of Antidumping Duty 
Investigation

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

EFFECTIVE DATE: November 24, 2008.

FOR FURTHER INFORMATION CONTACT: Elizabeth Eastwood, AD/CVD Operations, 
Office 2, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone: (202) 482-3874.

SUPPLEMENTARY INFORMATION:

The Petition

    On October 29, 2008, the Department of Commerce (the Department) 
received a petition concerning imports of commodity matchbooks from 
India (the petition) filed in proper form by D.D. Bean & Sons Inc. (the 
petitioner). See the Petition on Commodity Matchbooks from India filed 
on October 29, 2008. On November 3, 2008, the Department issued 
requests for additional information and clarification of certain areas 
of the petition, including the scope. Further, on November 6, 2008, the 
Department also requested additional information regarding constructed 
export price (CEP) profit. Based on the Department's requests, the 
petitioner filed two supplements to the petition on November 6, 2008, 
and an additional supplement on November 10, 2008. On November 17, 
2008, the Government of India, an interested party to this proceeding 
as defined in section 771(9)(B) of the Act, submitted a letter 
challenging the definition of the domestic like product as well as the 
completeness of the industry as reported by the petitioner. The 
petitioner filed its reply to this challenge on November 18, 2008.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the Act), the petitioner alleges that imports of commodity 
matchbooks 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 such imports materially injure, or threaten 
material injury to, an industry in the United States.
    The Department finds that the petitioner filed this petition on 
behalf of the domestic industry because the petitioner 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 duty investigation that the petitioner is requesting that 
the Department initiate (see ``Determination of Industry Support for 
the Petition'' section, below).

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.

[[Page 70966]]

Comments on Scope of Investigation

    During our review of the petition, 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 (Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)), 
we are setting aside a period for interested parties to raise issues 
regarding product coverage. 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 1117, 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.

Comments on Product Characteristics for Antidumping Duty Questionnaire

    We are requesting comments from interested parties regarding the 
appropriate physical characteristics of commodity matchbooks to be 
reported in response to the Department's antidumping duty 
questionnaire. 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 commodity matchbooks, 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 questionnaire, we must 
receive comments at the above-referenced address by December 1, 2008. 
Additionally, rebuttal comments must be received by December 8, 2008.

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 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 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, the petitioner does not 
offer a definition of domestic like product distinct from the scope of 
the investigation. On November 17, 2008, the Government of India, an 
interested party to this proceeding as defined in section 771(9)(B) of 
the Act, submitted a letter challenging the definition of the domestic 
like product. On November 18, 2008, the petitioner filed its reply to 
this challenge. We have analyzed these comments, and based on our 
analysis of the information submitted on the record, we have determined 
that commodity matchbooks as defined by the 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 Antidumping Duty Investigation 
Initiation Checklist: Commodity Matchbooks from India (Initiation 
Checklist), at Attachment II (Analysis of Industry Support for the 
Petition), on file in the CRU, Room 1117 of the main Department of 
Commerce building.
    With regard to section 732(c)(4)(A) of the Act, in determining 
whether the petitioner has standing (i.e., the domestic workers and 
producer 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 the 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, the

[[Page 70967]]

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 the 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 
the 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 732(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 732(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 732(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 732(b)(1) of the Act. See Initiation Checklist 
at Attachment II.
    The Department finds that the 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 antidumping investigation that it 
is requesting the Department initiate. See Initiation Checklist at 
Attachment II.

Allegations and Evidence of Material Injury and Causation

    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). In addition, the 
petitioner alleges that subject imports exceed the negligibility 
threshold provided for under section 771(24)(A) of the Act.
    The 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).

Period of Investigation

    In accordance with 19 CFR 351.204(b)(1), because this petition was 
filed on October 29, 2008, the period of investigation (POI) is October 
1, 2007, through September 30, 2008.

Allegation of Sales at Less Than Fair Value

    The following is a description of the allegation of sales at less 
than fair value upon which the Department has based its decision to 
initiate an investigation. The sources of data for the deductions and 
adjustments relating to U.S. price and NV 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, we 
may reexamine the information and revise the margin calculations, if 
appropriate.

Constructed Export Price

    The petitioner calculated CEP based on actual POI sales prices 
obtained from a U.S. distributor for Indian-produced commodity 
matchbooks sold by an Indian producer through its U.S. affiliate. The 
petitioner made adjustments to the starting price, where applicable, 
for foreign inland freight, ocean freight, and marine insurance. The 
petitioner calculated foreign inland freight, ocean freight, and marine 
insurance based on price quotes obtained from service providers. 
Because the petitioner's calculation of CEP excluded CEP profit, we 
requested further information from the petitioner on this issue. On 
November 10, 2008, the petitioner stated that the information necessary 
to calculate CEP profit was not reasonably available to it. Therefore, 
to be conservative, the Department has not made an adjustment for CEP 
profit in our calculation of CEP. See Initiation Checklist and ``Fair 
Value Comparisons'' section, below, for the CEP-to-NV margins.

Normal Value

    With respect to NV, the petitioner stated that home market prices 
were not reasonably available to it. The petitioner made a reasonable 
attempt to determine the existence of a viable home market for 
commodity matchbooks in India. According to the petitioner, it was 
unsuccessful in obtaining such pricing information, despite its best 
efforts. See the Petition at Exhibit 32. Therefore, the petitioner 
based NV on third country prices.
    The petitioner calculated NV based on a purchase of Indian-made 
commodity matchbooks from a Canadian matchbook retailer. The petitioner 
deducted a series of standard markups to estimate the price at the 
importer level. The petitioner made additional adjustments to the 
starting third country price, where applicable, for foreign inland 
freight, ocean freight, marine insurance, and Canadian customs duties. 
See the Petition at page 42 and Exhibit 36.

Fair-Value Comparison

    Based on the data provided by the petitioner, there is reason to 
believe that imports of commodity matchbooks from India are being, or 
are likely to be, sold in the United States at less than fair value. 
Based on a comparison of CEP to NV, the estimated dumping margin is 
135.95 percent.

Initiation of Antidumping Investigation

    Based upon the examination of the petition on commodity matchbooks 
from India and other information reasonably available to the 
Department, the Department finds that this petition meets the 
requirements of section 732 of the Act. Therefore, we are initiating an 
antidumping duty investigation to determine whether imports of 
commodity matchbooks from India 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 
determination no later than 140 days after the date of this initiation.

Respondent Selection

    The Department intends to select respondents based on U.S. Customs 
and Border Protection (CBP) data for U.S.

[[Page 70968]]

imports during the POI. We intend to release the CBP data under 
Administrative Protective Order (APO) to all parties with access to 
information protected by APO within five days of publication of this 
Federal Register notice, and make our decision regarding respondent 
selection within 20 days of publication of this notice. The Department 
invites comments regarding the CBP data and respondent selection within 
10 days of publication of this Federal Register notice.
    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305. Instructions for filing such 
applications may be found on the Department's Website at https://ia.ita.doc.gov/apo.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act and 19 CFR 
351.202(f), copies of the public version of the petition have 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 all 
known foreign producers/exporters, consistent with 19 CFR 
351.203(c)(2).

International Trade Commission (ITC) Notification

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

Preliminary Determination by the International Trade Commission

    The ITC will preliminarily determine, no later than December 13, 
2008, whether there is a reasonable indication that imports of 
commodity matchbooks from India materially injure, or threaten material 
injury to, a U.S. industry. A negative ITC determination covering all 
classes or kinds of merchandise covered by the petition would 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: 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 the 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 Sec.  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, caf[eacute]/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 
no 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. E8-27893 Filed 11-21-08; 8:45 am]
BILLING CODE 3510-DS-S