Xanthan Gum From Austria and the People's Republic of China: Initiation of Antidumping Duty Investigations, 39210-39215 [2012-16183]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 77, Number 127 (Monday, July 2, 2012)]
[Notices]
[Pages 39210-39215]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-16183]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-433-811, A-570-985]


Xanthan Gum From Austria and the People's Republic of China: 
Initiation of Antidumping Duty Investigations

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

DATES: Effective Date: July 2, 2012.

FOR FURTHER INFORMATION CONTACT: Karine Gziryan or Maisha Cryor at 
(202) 482-4081 or (202) 482-5831, respectively (Austria), AD/CVD 
Operations, Office 4; or Brandon Farlander or Erin Kearney at (202) 
482-0182 or (202) 482-0167, respectively (the People's Republic of 
China (the ``PRC'')), AD/CVD Operations, Office 4, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230.

SUPPLEMENTARY INFORMATION: 

The Petitions

    On June 5, 2012, the Department of Commerce (the ``Department'') 
received antidumping duty (``AD'') petitions concerning imports of 
xanthan gum from Austria and the People's Republic of China (``PRC'') 
filed in proper form by CP Kelco U.S. (``Petitioner'').\1\ Petitioner 
is a domestic producer of xanthan gum. On June 8, 2012, the Department 
requested additional information and clarification of certain areas of 
the Petitions. Petitioner filed responses to these requests on June 13, 
2012 (hereinafter, ``Supplement to the Austria Petition'' and 
``Supplement to the PRC Petition''). Additionally, on June 13, 2012, 
Archer Daniels Midland, a domestic producer of xanthan gum, submitted 
information regarding its 2011 production of xanthan gum (hereinafter, 
``ADM production letter''). On June 19, 2012, Petitioner submitted 
additional information regarding its constructed value surrogate 
financial ratios.
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    \1\ See Petitions for the Imposition of Antidumping Duties on 
Xanthan Gum from the People's Republic of China and Austria, filed 
on June 5, 2012 (the ``Petitions'').
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    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (the ``Act''), Petitioner alleges that imports of xanthan gum 
from Austria 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. Also, 
consistent with section 732(b)(1) of the Act, the Petitions are 
accompanied by information reasonably available to Petitioner 
supporting its allegations.
    The Department finds that Petitioner filed these Petitions 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 initiation of the AD 
investigations that Petitioner is requesting. See the ``Determination 
of Industry Support for the Petitions'' section below.

Period of Investigation

    Because the Petitions were filed on June 5, 2012, the period of 
investigation (``POI'') for the PRC investigation is October 1, 2011, 
through March 31, 2012. The POI for the Austria investigation is April 
1, 2011, through March 31, 2012.\2\
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    \2\ See 19 CFR 351.204(b)(1).
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Scope of the Investigations

    The products covered by these investigations are xanthan gum from 
Austria and the PRC. For a full description of the scope of the 
investigations, see the ``Scope of the Investigations,'' in Appendix I 
of this notice.

Comments on Scope of Investigations

    During our review of the Petitions, 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 (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 by July 16, 2012, 5:00 p.m. Eastern 
Standard Time, 20 calendar days from the signature date of this notice. 
All comments must be filed on the records of the Austria and the PRC AD 
investigations. All comments and submissions to the Department must be 
filed electronically using Import Administration's Antidumping 
Countervailing Duty Centralized Electronic Service System (IA 
ACCESS).\3\ An electronically filed document must be received 
successfully in its entirety by the Department's electronic records 
system, IA ACCESS, by the time and date noted above. Documents excepted 
from the electronic submission requirements must be filed manually 
(i.e., in paper form) with Import Administration's APO/Dockets Unit, 
Room 1870, U.S. Department of Commerce, 14th Street and Constitution 
Avenue NW., Washington, DC 20230, and stamped with the date and time of 
receipt by the deadline noted above.
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    \3\ See Antidumping and Countervailing Duty Proceedings: 
Electronic Filing Procedures; Administrative Protective Order 
Procedures, 76 FR 39263 (July 6, 2011) for details of the 
Department's electronic filing requirements, which went into effect 
on August 5, 2011. Information on help using IAACCESS can be found 
at https://iaaccess.trade.gov/help.aspx and a handbook can be found 
at https://iaaccess.trade.gov/help/Handbook%20on%20Electronic%20Filling%20Procedures.pdf.
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    The period of scope comments 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 determinations.

Comments on Product Characteristics for Antidumping Questionnaires

    The Department requests comments from interested parties regarding 
the appropriate physical characteristics of xanthan gum to be reported 
in response to the Department's AD questionnaires. This information 
will be used to identify the key physical characteristics of the 
merchandise under consideration in order to report the relevant factors 
and costs of production accurately 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 list 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 find 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.

[[Page 39211]]

In other words, while there may be some physical product 
characteristics utilized by manufacturers to describe xanthan gum, 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 matching products. 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 AD questionnaires, we must receive comments 
filed in accordance with the Department's electronic filing 
requirements, available at 19 CFR 351.303(g), by July 16, 2012. 
Additionally, rebuttal comments must be received by July 23, 2012.

Determination of Industry Support for the Petitions

    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 to poll the ``industry.''
    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 (see 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.\4\
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    \4\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (Ct. 
Int'l Trade 2001) (citing Algoma Steel Corp., Ltd. v. United States, 
688 F. Supp. 639, 644 (Ct. Int'l Trade 1988)).
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    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 the domestic like product distinct from the scope of 
the investigations. Based on our analysis of the information submitted 
on the record, we have determined that xanthan gum constitutes a single 
domestic like product and we have analyzed industry support in terms of 
that domestic like product.\5\
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    \5\ For a discussion of the domestic like product analysis in 
this case, see Antidumping Duty Investigation Initiation Checklist: 
Xanthan Gum from Austria (``Austria Initiation Checklist'') at 
Attachment II, and Antidumping Duty Investigation Initiation 
Checklist: Xanthan Gum from the PRC (``PRC Initiation Checklist'') 
at Attachment II, dated concurrently with this notice and on file 
electronically via IA ACCESS. Access to documents filed via IA 
ACCESS is also available in the Central Records Unit (CRU), Room 
7046 of the main Department of Commerce building.
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    In determining whether Petitioner has standing under section 
732(c)(4)(A) of the Act, we considered the industry support data 
contained in the Petitions with reference to the domestic like product 
as defined in the ``Scope of the Investigations,'' in Appendix I of 
this notice. To establish industry support, Petitioner provided its own 
2011 production of the domestic like product. In addition, we received 
a letter from the only other producer in the U.S. stating its 2011 
production of the domestic like product.\6\
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    \6\ This producer expressed neither support for nor opposition 
to the Petition. Hence, the Department considers this producer to be 
neutral. See Volume I of the Petitions at 2 and Exhibit I-1, and 
Supplements to the Austria and PRC Petitions at 3, and Supplement to 
the Austria Petition at Exhibit I-2, and Supplement to the PRC 
Petition at Exhibit I-2, and ADM production letter; see also Austria 
Initiation Checklist at Attachment II and PRC Initiation Checklist 
at Attachment II.
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    Our review of the data provided in the Petitions, supplemental 
submissions, and other information readily available to the Department 
indicates that Petitioner has established industry support.\7\ First, 
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 (e.g., 
polling).\8\ 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 
Petitions account for at least 25 percent of the total production of 
the domestic like product.\9\ 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 Petitions 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 
Petitions.\10\ Accordingly, the Department determines that the 
Petitions were filed on behalf of the domestic industry within the 
meaning of section 732(b)(1) of the Act.
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    \7\ See Austria Initiation Checklist at Attachment II and PRC 
Initiation Checklist at Attachment II.
    \8\ See section 732(c)(4)(D) of the Act; see also Austria 
Initiation Checklist at Attachment II and PRC Initiation Checklist 
at Attachment II.
    \9\ See Austria Initiation Checklist at Attachment II and PRC 
Initiation Checklist at Attachment II.
    \10\ See id.
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    The Department finds that 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 AD investigations that it is 
requesting the Department initiate.\11\
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    \11\ See id.
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Allegations and Evidence of Material Injury and Causation

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

[[Page 39212]]

    Petitioner contends that the industry's injured condition is 
illustrated by reduced market share, lost sales and revenues, reduced 
production, reduced shipments, reduced capacity utilization rate, 
underselling and price depression and suppression, reduced workforce, 
decline in financial performance, and an increase in import 
penetration.\12\ 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.\13\
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    \12\ See Volume I of the Petitions at 26-48.
    \13\ See Austria Initiation Checklist at Attachment III and PRC 
Initiation Checklist at Attachment III.
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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 investigations of imports of xanthan gum from Austria and the 
PRC. The sources of data for the deductions and adjustments relating to 
U.S. price and NV are discussed in greater detail in the Austria 
Initiation Checklist and the PRC Initiation Checklist.

Export Price

Austria

    Petitioner calculated export price (``EP'') using U.S. imports from 
Austria during the POI under the Harmonized Tariff Schedule of the 
United States (``HTSUS'') subheading 3913.90.20. To confirm the 
accuracy and reliability of the use of U.S. import statistics under 
this HTSUS subheading, Petitioner compared the U.S. import quantity by 
port for HTSUS subheading 3913.90.20 to the quantity of imports of 
xanthan gum from Austria captured in ship manifest data. Petitioner 
reviewed the manifest description of each shipment and correlated it to 
the import quantities from the U.S. import statistics under HTSUS 
subheadings 3913.90.20 such that the quantities are nearly identical 
for the POI. In addition, the ship manifest data also demonstrated that 
only food grade xanthan gum was imported from Austria into the United 
States during the POI. For this reason, Petitioner calculated the 
average unit value for the POI as the basis for U.S. price.\14\ As 
such, the EP provided by Petitioner is conservative.
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    \14\ See Volume III of the Petitions at 7-8 and Exhibits III-9 
and III-10.
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The PRC

    Petitioner calculated EP based on purchased prices for xanthan gum 
during the POI from a Chinese producer.\15\ The terms of sale for these 
invoices were FOB China port but Petitioner did not make an adjustment 
for domestic brokerage and handling expenses or freight charges to the 
port. As such, the EP provided by Petitioner is conservative.
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    \15\ See Volume II of the Petitions at 10 and Exhibit II-10; see 
also Supplement to the PRC Petition at 5 and Exhibit 5.
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Normal Value

Austria

    Pursuant to sections 773(a)(4) and 773(e) of the Act, Petitioner 
based NV on constructed value (``CV'') because it stated that Austrian 
home market and third-country market export pricing were not reasonably 
available to it.\16\ Petitioner calculated NV based on consumption 
rates of its own xanthan gum production facility in Oklahoma.\17\ 
Petitioner asserts that, to the best of its knowledge, the production 
methods and consumption rates of its own domestic xanthan gum 
production facility are similar to the production methods and 
consumption rates of the Austrian producer.\18\
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    \16\ See Volume III of the Petitions at 4; see also Supplement 
to the Austria Petition at 5 and Exhibit 5.
    \17\ See Volume III of the Petitions at 4 and Exhibits III-1.
    \18\ See Volume III of the Petitions Exhibit III-1; see also 
Supplement to the Austria Petition at 7.
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    Petitioner valued all raw material factors of production (``FOP'') 
using publicly available Austrian import statistics from the Global 
Trade Atlas (``GTA'').\19\ Petitioner relied on the POI for which data 
were available (i.e., April 2011 through February 2012). Petitioner 
excluded from these GTA import statistics imports from countries 
previously determined by the Department to be NME countries.\20\ In 
addition, Austrian imports from India, Indonesia, the Republic of 
Korea, and Thailand were excluded, as the Department has previously 
excluded prices from these countries because they maintain broadly 
available, non-industry-specific export subsidies.\21\ Also, if imports 
were labeled as originating from an ``unspecified'' country, they were 
excluded from the average value, because Petitioner could not be 
certain that they were not from either an NME country or a country with 
generally available export subsidies.\22\ For Austrian import values 
reported in Euros, Petitioner converted these values to U.S. dollars 
(``USD'') using the POI-average Euros/USD exchange rate, as reported on 
the Department's Web site.\23\
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    \19\ See Volume III of the Petitions at 4 and Exhibit III-2; see 
also Supplement to the Austria Petition at 13 and Exhibits 11 and 
12.
    \20\ See Volume III of the Petitions at Exhibit III-2.
    \21\ See Volume III of the Petitions at Exhibit III-2.
    \22\ See, e.g., Polyethylene Terephthalate Film, Sheet, and 
Strip from the People's Republic of China: Preliminary Determination 
of Sales at Less Than Fair Value, 73 FR 24552, 24559 (May 5, 2008), 
unchanged in Polyethylene Terephthalate Film, Sheet, and Strip from 
the People's Republic of China: Final Determination of Sales at Less 
Than Fair Value, 73 FR 55039 (September 24, 2008). See Volume III of 
the Petitions at Exhibit III-2.
    \23\ See Volume III of the Petitions at Exhibit III-4; see also 
Supplement to the Austria Petition at 4 and Exhibit 7.
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    Petitioner valued labor utilized in the production of xanthan gum 
based upon data collected by the International Labor Organization 
(``ILO'') Geneva under the sub-classification of ``24 Manufacture of 
Chemicals and Chemical Products.'' \24\ Petitioner utilized the total 
labor cost in manufacturing category. Because the data were collected 
in 2004, Petitioner inflated the reported hourly wage rate by the 
consumer price index inflation (``CPI'') rate in effect during the POI 
for Austria as reported by the International Monetary Fund (``IMF'') 
and converted the wage rate from Euro/hour to USD/hour using the POI-
average exchange rate, as reported on the Department's Web site.\25\
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    \24\ See Volume III of the Petitions at 4-5 and Exhibit III-3.
    \25\ See Volume III of the Petitions at 4-5 and Exhibit III-3 
and III-4 and Supplement to the Austria Petition at 6 and Exhibit 6.
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    Petitioner derived an electricity surrogate value using rates from 
November 2011 as reported in Europe's Energy Portal, which was then 
converted from Euros to USD using the POI-average exchange rate, as 
reported on the Department's Web site.\26\ Petitioner derived a steam 
surrogate value using data from the same source and time period as the 
surrogate value for electricity.\27\ Petitioner converted the steam 
surrogate value from Euros to USD using the POI-average exchange rate, 
as reported on the Department's Web site.\28\
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    \26\ See Volume III of the Petitions at 5 and Exhibits III-5; 
see also Supplement to the Austria Petition at 14 and Exhibits 11-
13.
    \27\ See Volume III of the Petitions at 5 and Exhibits III-5; 
see also Supplement to the Austria Petition at 14 and Exhibits 11-
13.
    \28\ See Volume III of the Petitions at 5 and Exhibits III-5; 
see also Supplement to the Austria Petition at 14 Exhibits 11-13.
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    Petitioner stated that, to the best of its knowledge, the Austrian 
producer packages xanthan gum in cartons stacked on wooden pallets 
wrapped in plastic.\29\ Surrogate values for packing

[[Page 39213]]

materials were derived from publicly available Austrian import 
statistics obtained from the GTA.\30\
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    \29\ See Volume III of the Petitions at 6.
    \30\ See Volume III of the Petitions at Exhibit III-2.
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    Petitioner relied on the 2011 financial performance data of its own 
domestic xanthan gum facility to value factory overhead, selling, and 
administrative expenses (``SG&A''), and profit.\31\
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    \31\ See Volume III of the Petitions at 5-6 and Exhibits III-6, 
III-7, and III-8; see also Supplement to the Austrian Petition at 7-
12 and Exhibit 10.
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    Based on our review of Petitioner's submissions, the Department 
determines that the CV used by Petitioner is acceptable for purposes of 
initiation.\32\
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    \32\ See Austrian Initiation Checklist.
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The PRC

    Petitioner states that the Department has long treated the PRC as a 
non-market economy (``NME'') country and this designation remains in 
effect today.\33\ In accordance with section 771(18)(C)(i) of the Act, 
the presumption of NME status for the PRC has not been revoked by the 
Department and, therefore, remains in effect for purposes of the 
initiation of this investigation. Accordingly, the NV of the product is 
appropriately based on FOP valued in a surrogate market-economy country 
in accordance with section 773(c) of the Act. In the course of this 
investigation, all parties, including the public, will have the 
opportunity to provide relevant information related to the issues of 
the PRC's NME status and the granting of separate rates to individual 
exporters.
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    \33\ See Volume II of the Petitions at 4.
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    Petitioner contends that Thailand is the appropriate surrogate 
country for the PRC because: (1) It is at a level of economic 
development comparable to that of the PRC; and (2) it is a significant 
producer of comparable merchandise.\34\ Further, surrogate values data 
from Thailand are available and reliable.\35\ Moreover, Petitioner 
notes that the Department has previously used Thailand as the surrogate 
country in previous investigations involving the PRC.\36\ In addition, 
Petitioner states that there are no known producers of xanthan gum from 
Thailand but there are Thai exports of comparable merchandise, which 
demonstrates that Thailand is a significant producer of comparable 
merchandise.\37\ Based on the information provided by Petitioner, we 
believe that it is appropriate to use Thailand as a surrogate country 
for initiation purposes. After the initiation of the investigation, 
interested parties will have the opportunity to submit comments 
regarding surrogate country selection and, pursuant to 19 CFR 
351.301(c)(3)(i), will be provided an opportunity to submit publicly 
available information to value FOP within 40 days from the date of 
publication of the preliminary determination.
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    \34\ See Volume II of the Petitions at 4-5 and Exhibit II-1.
    \35\ See Volume II of the Petitions at 5.
    \36\ See Volume II of the Petitions at 5, citing Sodium 
Hexametaphosphate From the People's Republic of China: Preliminary 
Results of Second Antidumping Duty Administrative Review, 77 FR 
17013, 17015 (March 23, 2012).
    \37\ See Volume II of the Petitions at 5-6 and Exhibit II-1.
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    Petitioner calculated the NV and dumping margins for the U.S. 
price, discussed above, using the Department's NME methodology as 
required by section 773(c) of the Act, 19 CFR 351.202(b)(7)(i)(C) and 
19 CFR 351.408. Petitioner calculated NV based on consumption rates of 
its own xanthan gum production facility in the PRC.\38\ Petitioner 
asserts that, to the best of Petitioner's knowledge, production methods 
and consumption rates of its own Chinese xanthan gum production 
facility are similar to the production methods and consumption rates of 
other Chinese producers.\39\
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    \38\ See Volume II of the Petitions at 6-9 and Exhibits II-11; 
see also Supplement to the PRC Petition at Exhibit 9.
    \39\ See Volume II of the Petitions at 6 and Exhibit II-2.
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    Petitioner valued all raw material FOP using publicly available 
surrogate country data; specifically, Petitioner used Thai import 
statistics from the GTA.\40\ Petitioner relied on the POI for which 
data were available (i.e., October 2011 through March 2012). Petitioner 
excluded from these GTA import statistics imports from countries 
previously determined by the Department to be NME countries. In 
addition, imports from India, Indonesia, the Republic of Korea, and 
Thailand were excluded, as the Department has previously excluded 
prices from these countries because they maintain broadly available, 
non-industry-specific export subsidies.\41\ Also, if imports were 
labeled as originating from an ``unspecified'' country, they were 
excluded from the average value, because Petitioner could not be 
certain that they were not from either an NME country or a country with 
generally available export subsidies.\42\
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    \40\ See Volume II of the Petitions at 6-7, and Exhibit II-3; 
see also Supplement to the PRC Petition at 5-6 and Exhibits 7 and 9.
    \41\ See Volume II of the Petitions at Exhibit II-3; see also 
Supplement to the PRC Petition at Exhibit 9.
    \42\ See, e.g., Polyethylene Terephthalate Film, Sheet, and 
Strip from the People's Republic of China: Preliminary Determination 
of Sales at Less Than Fair Value, 73 FR 24552, 24559 (May 5, 2008), 
unchanged in Polyethylene Terephthalate Film, Sheet, and Strip from 
the People's Republic of China: Final Determination of Sales at Less 
Than Fair Value, 73 FR 55039 (September 24, 2008). See Volume II of 
the Petitions at Exhibit II-3.
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    For Thai import values reported in baht, Petitioner converted these 
values to USD per kilogram using the POI-average Thai baht/USD exchange 
rate, as reported on the Department's Web site.\43\
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    \43\ See Volume II of the Petitions at 7-8 and Exhibit II-5.
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    Petitioner converted ethanol (ethyl alcohol) from liters to 
kilograms because the Thai surrogate value for ethanol was reported in 
liters but Petitioner's NV model for ethanol is in kilograms.\44\
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    \44\ See Supplement to the PRC Petition at 5-6 and Exhibit 6.
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    Consistent with the Department's new methodology for the valuation 
of labor in non-market economies, Petitioner valued labor utilized in 
the production of xanthan gum based upon data collected by the ILO and 
disseminated in Chapter 6A of the ILO Yearbook of Labor Statistics.\45\ 
Petitioner utilized the total labor cost in manufacturing category. 
Petitioner converted the monthly wage rate to an hourly wage based upon 
Yearbook of Labor Statistics data for 2005 (the most recently 
published). Because the data were collected in 2005, Petitioner also 
inflated the reported wage rate by the consumer price index inflation 
rate in effect during the POI as reported by the IMF.\46\
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    \45\ See Volume II of the Petitions at 7-8 and Exhibit II-4.
    \46\ See Volume II of the Petitions at Exhibit II-4.
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    Because Petitioner could not segregate energy costs from the 
surrogate financial statement, Petitioner accounted for the 
electricity, steam, and water costs in the calculation of surrogate 
financial ratios.\47\ This is consistent with the Department's recent 
decision in Citric Acid and Certain Citrate Salts from the People's 
Republic of China: Final Affirmative Determination of Sales at Less 
than Fair Value, 74 FR 16838 (April 13, 2009), and accompanying Issues 
and Decision Memorandum at Comment 2.
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    \47\ See Volume II of the Petitions at 10 and Exhibit II-11; see 
also Supplement to the PRC Petition at Exhibit 9.
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    Petitioner stated that, to the best of its knowledge, Chinese 
producers regularly package xanthan gum in 25 kilogram sacks.\48\ 
Surrogate values for packing materials were derived from publicly

[[Page 39214]]

available Thai import statistics obtained from the GTA.\49\
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    \48\ See Volume II of the Petitions at 9 and Exhibit II-11.
    \49\ See Volume II of the Petitions at Exhibits II-3 and II-11; 
see also Supplement to the PRC Petition at Exhibit 9.
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    Petitioner used the financial statements of Ajinomoto (Thailand) 
Co., Ltd. (``Ajinomoto'') to value factory overhead, SG&A, and profit. 
Petitioner identified Ajinomoto as a Thai producer of l-lysine 
(``lysine'') and monosodium glutamate (``MSG''), which are comparable 
merchandise.\50\ According to Petitioner, lysine and MSG are both 
produced via fermentation, use similar production equipment as that 
required to produce xanthan gum, and the raw material inputs are 
similar or identical to those used to manufacture xanthan gum.\51\ 
However, as discussed above, Petitioner could not segregate energy 
costs from the calculation of surrogate financial ratios; therefore, 
Petitioner did not incorporate energy inputs into the calculation of NV 
in the cost of manufacturing.\52\
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    \50\ See Volume II of the Petitions at 8-9 and Exhibit II-8.
    \51\ See Volume II of the Petitions at 9 and Exhibits II-8 and 
II-12; see also Supplement to the PRC Petition at Exhibit 9.
    \52\ See Volume II of the Petitions at 10 and Exhibit II-11; see 
also Supplement to the PRC Petition at Exhibit 9.
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    Based on our review of Petitioner's submissions, the Department 
determines that the surrogate values used by Petitioner are reasonably 
available and, thus, acceptable for purposes of initiation.\53\
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    \53\ See PRC Initiation Checklist.
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Fair Value Comparisons

    Based on the data provided by Petitioner, there is reason to 
believe that imports of xanthan gum from Austria and the PRC are being, 
or are likely to be, sold in the United States at less than fair value. 
Based on comparisons of EP to CVs in accordance with section 773(a)(4) 
of the Act, the estimated dumping margin for xanthan gum from Austria 
is 145.20 percent.\54\ Based on comparisons of EPs to NVs in accordance 
with section 773(c) of the Act, the estimated dumping margin for 
xanthan gum from the PRC is 154.07 percent.\55\
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    \54\ See Supplement to the Austria Petition at 13 and Exhibit 
12.
    \55\ See the PRC Initiation Checklist.
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Initiation of Antidumping Investigations

    Based upon the examination of the Petitions on xanthan gum from 
Austria and the PRC, we find that the Petitions meet the requirements 
of section 732 of the Act. Therefore, we are initiating AD 
investigations to determine whether imports of xanthan gum from Austria 
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 and 19 CFR 351.205(b)(1), unless postponed, we will make our 
preliminary determinations no later than 140 days after the date of 
this initiation.

Targeted Dumping Allegations

    On December 10, 2008, the Department issued an interim final rule 
for the purpose of withdrawing 19 CFR 351.414(f) and (g), the 
regulatory provisions governing the targeted dumping analysis in AD 
investigations, and the corresponding regulation governing the deadline 
for targeted dumping allegations, 19 CFR 351.301(d)(5).\56\ The 
Department stated that ``{w{time} ithdrawal will allow the Department 
to exercise the discretion intended by the statute and, thereby, 
develop a practice that will allow interested parties to pursue all 
statutory avenues of relief in this area.'' \57\
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    \56\ See Withdrawal of the Regulatory Provisions Governing 
Targeted Dumping in Antidumping Duty Investigations, 73 FR 74930 
(December 10, 2008).
    \57\ See id., 73 FR at 74931.
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    In order to accomplish this objective, if any interested party 
wishes to make a targeted dumping allegation in either of these 
investigations pursuant to section 777A(d)(1)(B) of the Act, such 
allegations are due no later than 45 days before the scheduled date of 
the country-specific preliminary determination.

Respondent Selection

Austria

    For the Austria investigation, although the Department normally 
relies on import data from U.S. Customs and Border Protection (``CBP'') 
to select respondents in AD investigations involving market-economy 
countries, the HTSUS category under which xanthan gum may enter is a 
basket category. Therefore, the CBP data cannot be isolated to identify 
imports of subject merchandise during the POI. Accordingly, the 
Department must rely on an alternate methodology for respondent 
selection, as described below.
    The Petitions name one company as a producer and/or exporter in 
Austria of xanthan gum: Jungbunzlaer Austria AG (``JBL'').\58\ The 
Petitions identify this one company as accounting for virtually all of 
the imports of xanthan gum from Austria. Moreover, we currently know of 
no further exporters or producers of subject merchandise. Accordingly, 
the Department is selecting JBL as the mandatory respondent in this 
investigation pursuant to section 777A(c)(1) of the Act. We will 
consider comments from interested parties on this respondent selection. 
Parties wishing to comment must do so within five days of the 
publication of this notice in the Federal Register.\59\
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    \58\ See Volume I of the Petitions at Exhibit I-5.
    \59\ See Bottom Mount Combination Refrigerator-Freezers from the 
Republic of Korea and Mexico Initiation of Antidumping Duty 
Investigations, 76 FR 23281, 23285 (April 26, 2011).
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The PRC

    For the PRC investigation, the Department will request quantity and 
value information from known exporters/producers identified with 
complete contact information in the Petitions.\60\ The quantity and 
value data received from NME exporters/producers in the PRC will be 
used as the basis to select the mandatory respondents.
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    \60\ See Volume I of Petitions at 25 and Exhibit I-2; see also 
Supplement to the PRC Petition at 7 and Exhibit 8.
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    The Department requires that respondents submit a response to both 
the quantity and value questionnaire and the separate-rate application 
by the respective deadlines in order to receive consideration for 
separate-rate status.\61\ On the date of the publication of this 
initiation notice in the Federal Register, the Department will post the 
quantity and value questionnaires, along with the filing instructions, 
on the Import Administration Web site at https://ia.ita.doc.gov/ia-highlights-and-news.html, and a response to the quantity and value 
questionnaire is due no later than July 16, 2012.
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    \61\ See, e.g., Circular Welded Austenitic Stainless Pressure 
Pipe from the People's Republic of China: Initiation of Antidumping 
Duty Investigation, 73 FR 10221, 10225 (February 26, 2008).
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    Interested parties must submit applications for disclosure under 
administrative protective order (``APO'') in accordance with 19 CFR 
351.305. Instructions for filing such applications may be found on the 
Department's Web site at https://ia.ita.doc.gov/apo.

Separate Rates

    In order to obtain separate-rate status in NME investigations, 
exporters and producers must submit a separate-rate status 
application.\62\ The specific requirements for submitting the separate-
rate application in this investigation are outlined in detail in the 
application itself, which will be

[[Page 39215]]

available on the Department's Web site at https://ia.ita.doc.gov/ia-highlights-and-news.html on the date of publication of this initiation 
notice in the Federal Register. The separate-rate application will be 
due 60 days after publication of this initiation notice. In the PRC 
investigation, for exporters and producers who submit a separate-rate 
status application and subsequently are selected as mandatory 
respondents, these exporters and producers will no longer be eligible 
for consideration for separate rate status unless they respond to all 
parts of the questionnaire as mandatory respondents. As noted in the 
``Respondent Selection'' section above, the Department requires that 
respondents submit a response to both the quantity and value 
questionnaire and the separate-rate application by the respective 
deadlines in order to receive consideration for separate-rate status. 
The quantity and value questionnaire will be available on the 
Department's Web site at https://ia.ita.doc.gov/ia-highlights-and-news.html on the date of the publication of this initiation notice in 
the Federal Register.
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    \62\ See Policy Bulletin 05.1: Separate-Rates Practice and 
Application of Combination Rates in Antidumping Investigations 
involving Non-Market Economy Countries (April 5, 2005) (``Separate 
Rates and Combination Rates Bulletin''), available on the 
Department's Web site at https://ia.ita.doc.gov/policy/bull05-1.pdf.
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Use of Combination Rates in an NME Investigation

    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{time} 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 investigation. Note, 
however, that one rate is calculated for the exporter and all of the 
producers which supplied subject merchandise to it during the period 
of investigation. This practice applies both to mandatory 
respondents receiving an individually calculated separate rate as 
well as the pool of non-investigated firms receiving the weighted-
average of the individually calculated rates. This practice is 
referred to as the application of ``combination rates'' because such 
rates apply to specific combinations of exporters and one or more 
producers. The cash-deposit rate assigned to an exporter will apply 
only to merchandise both exported by the firm in question and 
produced by a firm that supplied the exporter during the period of 
investigation.

See Separate Rates and Combination Rates Bulletin at 6 (emphasis 
added).

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act and 19 CFR 
351.202(f), copies of the public version of the Petitions have been 
provided to the Government of the PRC and Austrian authorities. Because 
of the large number of producers/exporters identified in the Petitions, 
the Department considers the service of the public version of the 
Petitions to the foreign producers/exporters satisfied by the delivery 
of the public version to the Government of the PRC and Austrian 
authorities, consistent with 19 CFR 351.203(c)(2).

ITC Notification

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

Preliminary Determinations by the ITC

    The ITC will preliminarily determine no later than July 20, 2012, 
whether there is a reasonable indication that imports of xanthan gum 
from Austria and the PRC are materially injuring or threatening 
material injury to a U.S. industry. A negative ITC determination for 
any country will result in the investigation being terminated with 
respect to that country; otherwise, these investigations will proceed 
according to statutory and regulatory time limits.

Notification to Interested Parties

    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305. On January 22, 2008, the 
Department published Antidumping and Countervailing Duty Proceedings: 
Documents Submission Procedures; APO Procedures, 73 FR 3634 (Jan. 22, 
2008). Parties wishing to participate in these investigations should 
ensure that they meet the requirements of these procedures (e.g., the 
filing of letters of appearance as discussed at 19 CFR 351.103(d)).
    Any party submitting factual information in an AD/countervailing 
duty (``CVD'') proceeding must certify to the accuracy and completeness 
of that information.\63\ Parties are hereby reminded that revised 
certification requirements are in effect for company/government 
officials as well as their representatives in all segments of any AD/
CVD proceedings initiated on or after March 14, 2011.\64\ The formats 
for the revised certifications are provided at the end of the Interim 
Final Rule. The Department intends to reject factual submissions in any 
proceeding segments initiated on or after March 14, 2011, if the 
submitting party does not comply with the revised certification 
requirements.
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    \63\ See section 782(b) of the Act.
    \64\ See Certification of Factual Information to Import 
Administration During Antidumping and Countervailing Duty 
Proceedings: Interim Final Rule, 76 FR 7491 (February 10, 2011) 
(Interim Final Rule) amending 19 CFR 351.303(g)(1) & (2) and 
supplemented by Certification of Factual Information To Import 
Administration During Antidumping and Countervailing Duty 
Proceedings: Supplemental Interim Final Rule, 76 FR 54697 (September 
2, 2011).
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    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: June 25, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.

Appendix I

Scope of the Investigations

    The scope of these investigations covers dry xanthan gum, 
whether or not coated or blended with other products. Further, 
xanthan gum is included in these investigations regardless of 
physical form, including, but not limited to, solutions, slurries, 
dry powders of any particle size, or unground fiber.
    Xanthan gum that has been blended with other product(s) is 
included in this scope when the resulting mix contains 15 percent or 
more of xanthan gum by dry weight. Other products with which xanthan 
gum may be blended include, but are not limited to, sugars, 
minerals, and salts.
    Xanthan gum is a polysaccharide produced by aerobic fermentation 
of Xanthomonas campestris. The chemical structure of the repeating 
pentasaccharide monomer unit consists of a backbone of two P-1,4-D-
Giucose- monosaccharide units, the second with a trisaccharide side 
chain consisting of P-D-Mannose-(1,4)- P-DGiucuronic acid-(1,2)--a-
D-Mannose monosaccharide units. The terminal mannose may be 
pyruvylated and the internal mannose unit may be acetylated.
    Merchandise covered by the scope of these investigations is 
classified in the Harmonized Tariff Schedule of the United States at 
subheading 3913.90.20. This tariff classification is provided for 
convenience and customs purposes; however, the written description 
of the scope is dispositive.

[FR Doc. 2012-16183 Filed 6-29-12; 8:45 am]
BILLING CODE 3510-DS-P