1,1,1,2-Tetrafluoroethane From the People’s Republic of China: Initiation of Antidumping Duty Investigation
| Federal Information & News Dispatch, Inc. |
Citation: "78 FR 73832"
Document Number: "A-570-998"
"Notices"
   DATES: Effective Date:
   FOR FURTHER INFORMATION CONTACT:
   SUPPLEMENTARY INFORMATION: On
   FOOTNOTE 1 See "Petition for the Imposition of Antidumping Duties on Imports of 1,1,1,2-Tetrafluoroethane from
   FOOTNOTE 2 See Petitioner's
   FOOTNOTE 3 See Petitioner's
   In accordance with section 732(b) of the Tariff Act of 1930, as amended ("the Act"), Petitioner alleges that imports of tetrafluoroethane from the PRC are being, or are likely to be, sold in
   The Department finds that Petitioner filed this Petition on behalf of the domestic industry because Petitioner is an interested party as defined in section 771(9)(C) of the Act. The Department also finds that Petitioner has demonstrated sufficient industry support with respect to the initiation of the AD investigation that Petitioner is requesting. /4/
   FOOTNOTE 4 See the "Determination of Industry Support for the Petitions" section, below. END FOOTNOTE
Period of Investigation
   Pursuant to 19 CFR 351.204(b)(1), because the Petition was filed on
   FOOTNOTE 5 See 19 CFR 351.204(b)(1). END FOOTNOTE
Scope of the Investigation
   The product covered by this investigation is tetrafluoroethane from the PRC. /6/
   FOOTNOTE 6 See Appendix I of this notice for a full description of the scope of this investigation. END FOOTNOTE
Comments on the 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 product for which the domestic industry is seeking relief. Moreover, as discussed in the preamble to the regulations, /7/ 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
   FOOTNOTE 7 See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (
   FOOTNOTE 8 Scope comments are typically due 20 calendar days from the signature date of this notice, which in this case falls on a Sunday. Department practice dictates that where a deadline falls on a weekend or federal holiday, the appropriate deadline is the next business day.
Comments on the Product Characteristics for Antidumping Duty Questionnaire
   The Department requests comments from interested parties regarding the appropriate physical characteristics of tetrafluoroethane to be reported in response to the Department's AD questionnaire. This information will be used to identify the key physical characteristics of the subject merchandise 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) 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 tetrafluoroethane, 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 questionnaire, we must receive comments on product characteristics by
Filing Requirements
   All submissions to the Department must be filed electronically using IA ACCESS. An electronically filed document must be received successfully in its entirety by
   FOOTNOTE 9 19 CFR 351.303(b)(1). END FOOTNOTE
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 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
   FOOTNOTE 10 See section 771(10) of the Act. END FOOTNOTE
   FOOTNOTE 11
   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. Based on our analysis of the information submitted on the record, we have determined that tetrafluoroethane, as defined in the scope of the investigation, constitutes a single domestic like product and we have analyzed industry support in terms of that domestic like product. /12/
   FOOTNOTE 12 See Antidumping Duty Investigation Initiation Checklist: 1,1,1,2-Tetrafluoroethane from
   On
   FOOTNOTE 13 See Notice of Extension of the Deadline for Determining the Adequacy of the Antidumping Duty and Countervailing Duty Petitions: 1,1,1,2-Tetrafluoroethane From the People's Republic of China, 78 FR 66894, 66895 (
   On
   FOOTNOTE 14 For a detailed discussion of the responses received, See AD Initiation Checklist at Attachment II. The polling questionnaire and questionnaire responses are on file electronically via IA ACCESS and can also be accessed through the CRU. END FOOTNOTE
   Our analysis of the data received in the polling questionnaire responses indicates that the domestic producers of tetrafluoroethane which support the Petition account for at least 25 percent of the total production of the domestic like product and 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. /15/ Accordingly, the Department determines that the industry support requirements of section 732(c)(4)(A) of the Act have been met. Therefore, the Department determines 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 it has demonstrated sufficient industry support with respect to the AD investigation that it is requesting the Department initiate. /16/
   FOOTNOTE 15 See AD Initiation Checklist at Attachment II. END FOOTNOTE
   FOOTNOTE 16 Id. END FOOTNOTE
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. /17/
   FOOTNOTE 17 See General Issues Supplement at 5-6 and Exhibit 5. END FOOTNOTE
   Petitioner contends that the industry's injured condition is illustrated by reduced market share; underselling and price depression or suppression; lost sales and revenues; decline in U.S. sales; and decline in financial performance. /18/ 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. /19/
   FOOTNOTE 18 See Volume I of the Petition, at 4-13 and
   FOOTNOTE 19 See AD Initiation Checklist, at Attachment III, Analysis of Allegations and Evidence of Material Injury and Causation for the Petitions Covering 1,1,1,2-Tetrafluoroethane from
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 investigations of imports of tetrafluoroethane from 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 AD Initiation Checklist.
Export Price
   Petitioner calculated export price ("EP") based on one price quote for Chinese tetrafluoroethane provided by a domestic distributor of PRC chemical products, as identified in affidavits regarding U.S. price. /20/ Based on the price quote's delivery terms, Petitioner deducted from this price the charges and expenses associated with exporting and delivering the product to the U.S. customer (e.g., insurance and freight, U.S. duty and U.S inland freight). /21/ Petitioner made no other adjustments. /22/
   FOOTNOTE 20 See AD Initiation Checklist at 6; see also Volume II of the Petition, at 4 and Exhibit II-7; see also AD Supplement to the Petition, at 2-3 and Exhibit 5. END FOOTNOTE
   FOOTNOTE 21 Id. END FOOTNOTE
   FOOTNOTE 22 Id. END FOOTNOTE
Normal Value
   Petitioner claims that the PRC is a non-market economy ("NME") country, and that this designation remains in effect as of the date of this Petition. /23/ The presumption of NME status for the PRC has not been revoked by the Department and, therefore, in accordance with section 771(18)(C)(i) of the Act, remains in effect for purposes of the initiation of this investigation. Accordingly, the NV of the product for the investigation is appropriately based on factors of production valued in a surrogate market-economy country in accordance with section 773(c) of the Act. In the course of this investigation, all parties will have the opportunity to provide relevant information related to the issues of the PRC's NME status and granting of separate rates to individual exporters.
   FOOTNOTE 23 See Volume II of the Petition at 1-2. END FOOTNOTE
   Petitioner contends that
   FOOTNOTE 24 Id. at 1-3 and Exhibits II-3 through and II-6. END FOOTNOTE
   FOOTNOTE 25 See AD Initiation Checklist. END FOOTNOTE
   FOOTNOTE 26 See 19 CFR 351.301(c)(3)(i). Note that this is the revised regulation published on
   Petitioner calculated NV using the Department's NME methodology as required by 19 CFR 351.202(b)(7)(i)(C) and 19 CFR 351.408. In calculating NV, Petitioner based the quantity of each of the inputs used to manufacture the subject merchandise on its own consumption experience which, Petitioner contends, to the best of its knowledge, is similar to the consumption of PRC producers. /27/
   FOOTNOTE 27 See Volume II of the Petition at 2 and Exhibits II-2 and II-6. END FOOTNOTE
   Petitioner valued the factors of production using reasonably available, public surrogate country data, specifically, Thai import data from the Global Trade Atlas ("GTA") for the period February through
   FOOTNOTE 28 See Volume II of the Petition at 3 and Exhibit II-3. END FOOTNOTE
   FOOTNOTE 29 See Volume II of the Petition at Exhibit II-4; see also AD Supplement to the Petition at 4-5 and Exhibit 2. END FOOTNOTE
   Petitioner determined direct materials costs from Thai import data from the GTA. /30/ Petitioner applied certain conversion factors to align the units of measure with its own factors of production. /31/ Petitioner calculated financial ratios (i.e., factory overhead expenses, selling, general, and administrative ("SG&A") expenses, and profit) based on the most recent audited financial statements of
   FOOTNOTE 30 See Volume II of the Petition at Exhibit II-3. END FOOTNOTE
   FOOTNOTE 31 Id. at Exhibit II-2. END FOOTNOTE
   FOOTNOTE 32 See AD Supplement to Petition at 5. END FOOTNOTE
Fair Value Comparisons
   Based on the data provided by Petitioner, there is reason to believe that imports of tetrafluoroethane from the PRC are being, or are likely to be, sold in
   FOOTNOTE 33 Id. at Exhibit 6, AD Margin. END FOOTNOTE
Initiation of Antidumping Duty Investigation
   Based on our examination of the Petition on tetrafluoroethane from the PRC, the Department finds that the petition meets the requirements of section 732 of the Act. Therefore, we are initiating an AD investigation to determine whether imports of tetrafluoroethane from the PRC are being, or likely to be, sold in
Respondent Selection and Quantity and Value Questionnaire
   In accordance with our standard practice for respondent selection in AD investigations involving NME countries, we intend to issue quantity and value questionnaires to each potential respondent, and will base respondent selection on the responses received. In addition, the Department will post the quantity and value questionnaire along with the filing instructions on the Enforcement and Compliance Web site (http://www.trade.gov/enforcement/news.asp). Exporters and producers of tetrafluoroethane from the PRC that do not receive quantity and value questionnaires via mail may still submit a quantity and value response, and can obtain a copy from the Enforcement and Compliance Web site. The quantity and value questionnaire must be submitted by all PRC exporters/producers by no later than
Separate Rates
   In order to obtain separate rate status in an NME AD investigation, exporters and producers must submit a separate rate application. /34/ The specific requirements for submitting the separate rate application in the PRC investigation are outlined in detail in the application itself, which will be available on the Department's Web site at http://trade.gov/enforcement/ia-highlights-and-news.html on the date of publication of this initiation notice in the
   FOOTNOTE 34 See Policy Bulletin 05.1: Separate-Rates Practice and Application of Combination Rates in Antidumping Investigation involving Non-Market Economy Countries (
Use of Combination Rates
   The Department will calculate combination rates for certain respondents that are eligible for a separate rate in an NME investigation. The Separate Rates and Combination Rates Bulletin states:
   {w}hile continuing the practice of assigning separate rates only to exporters, all separate rates that the Department will now assign in its NME investigations will be specific to those producers that supplied the exporter during the period of 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. /35/
   FOOTNOTE 35 See Separate Rates and Combination Rates Bulletin at 6 (emphasis added). END FOOTNOTE
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 Government of the PRC via IA ACCESS. Because of the particularly large number of producers/exporters identified in the Petition, the Department considers the service of the public version of the Petition to the foreign producers/exporters to be satisfied by the provision of the public versions of the Petition to the Government of the PRC, consistent with 19 CFR 351.203(c)(2).
International Trade Commission Notification
   We have notified the ITC of our initiation, as required by section 732(d) of the Act.
Preliminary Determination by the ITC
   The ITC will preliminarily determine, within 45 days after the date on which the Petition was filed, whether there is a reasonable indication that imports of tetrafluoroethane from the PRC are materially injuring, or threatening material injury to, a U.S. industry. /36/ A negative ITC determination will result in the investigation being terminated; otherwise, this investigation will proceed according to statutory and regulatory time limits.
   FOOTNOTE 36 See section 733(a) of the Act. END FOOTNOTE
Submission of Factual Information
   On
Revised Extension of Time Limits Regulation
   On
Certification Requirements
   Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information. /37/ Parties are hereby reminded that revised certification requirements are in effect for company/government officials as well as their representatives in all AD or CVD investigations or proceedings initiated on or after
   FOOTNOTE 37 See section 782(b) of the Act. END FOOTNOTE
   FOOTNOTE 38 See Certifications of Factual Information To Import Administration During Antidumping and Countervailing Duty Proceedings, 78 FR 42678 (
Notification to Interested Parties
   Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On
   This notice is issued and published pursuant to section 777(i) of the Act.
   Dated:
Assistant Secretary for Enforcement and Compliance.
Appendix I
Scope of the Investigation
   The product subject to this investigation is 1,1,1,2-Tetrafluoroethane, R-134a, or its chemical equivalent, regardless of form, type, or purity level. The chemical formula for 1,1,1,2-tetrafluoroethane is CF3 -CH2 F, and the Chemical Abstracts Service ("CAS") registry number is CAS 811-97-2.
   1,1,1,2-Tetrafluoroethane is sold under a number of trade names including Klea 134a and Zephex 134a (Mexichem Fluor); Genetron 134a (
   Merchandise covered by the scope of this investigation is currently classified in the Harmonized Tariff Schedule of
[FR Doc. 2013-29344 Filed 12-6-13;
BILLING CODE 3510-DS-P
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