65 FR 47954, August 4, 2000 

[A-122-835]

 
Initiation of Antidumping Duty Investigation: Anhydrous Sodium 
Sulfate From Canada

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

EFFECTIVE DATE: August 4, 2000.

FOR FURTHER INFORMATION CONTACT: Irina Itkin or Shawn Thompson at (202) 
482-0656 and (202) 482-1776, respectively; Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230.

Initiation of Investigations

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are references 
to the provisions codified at 19 CFR Part 351 (1999).

The Petition

    On July 10, 2000, the Department of Commerce (the Department) 
received a petition filed in proper form by Cooper Natural Resources 
and IMC Chemicals, Inc. (hereinafter collectively, ``the 
petitioners''). The Department received information supplementing the 
petition throughout the initiation period.
    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of anhydrous sodium sulfate from Canada 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 an industry in the United States.
    The Department finds that the petitioners filed this petition on 
behalf of the domestic industry because they are interested parties as 
defined in section 771(9)(C) of the Act and have demonstrated 
sufficient industry support with respect to the antidumping duty 
investigation that they are requesting the Department to initiate (see 
Determination of Industry Support for the Petition, below).

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 the Department's industry support determination, which is 
to be made before the initiation of the investigation, be based on 
whether a minimum percentage of the relevant industry supports the 
petition. A petition meets this requirement if the domestic producers 
or workers who support the petition account for: (1) At least 25 
percent of the total production of the domestic like product in the 
region, 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.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether the 
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 (section 771(10) of the Act), they do so for different purposes 
and pursuant to 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 the law.\1\
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    \1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass from Japan: Final Determination; Rescission of 
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).
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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 subtitle.'' Thus, the reference point from which the 
domestic like product analysis begins is ``the article subject to an 
investigation,'' i.e., the merchandise described in the scope of the 
petition.
    The domestic like product referred to in the petition is the single 
domestic like product defined in the ``Scope of Investigation'' 
section, below. No party has commented on the petition's definition of 
the domestic like product, and there is nothing on the record to 
indicate that this definition is inaccurate. The Department, therefore, 
has adopted the domestic like product definition set forth in the 
petition.
    Moreover, the Department has determined that the petition contains 
adequate evidence of industry support; therefore, polling is 
unnecessary. In this case, the petitioners represent over 50 percent of 
total production of the domestic like product in the United States. See 
Initiation Checklist, dated July 31, 2000 (Initiation Checklist), at 
page 3. Accordingly, the Department determines that this petition is 
filed on behalf of the domestic industry within the meaning of section 
732(c)(4)(A) of the Act.

Scope of Investigation

    For purposes of this investigation, the product covered is 
anhydrous sodium sulfate, also referred to as ``salt cake'' or 
``disodium sulfate,'' from Canada. Anhydrous sodium sulfate is an

[[Page 47955]]

inorganic chemical with a chemical composition of 
Na<INF>2</INF>SO<INF>4</INF>. The ``Chemical Abstract Service'' number 
for anhydrous sodium sulfate is 7757-82-6. All forms and variations of 
anhydrous sodium sulfate are included within the scope of the 
investigation, regardless of grade, level of purity, production method, 
or form of packaging. Anhydrous sodium sulfate is currently 
classifiable under subheadings 2833.11.10 and 2833.11.50 of the 
Harmonized Tariff Schedule of the United States (HTSUS). Although these 
HTSUS subheadings are provided for convenience and customs purposes, 
our written description of the scope of this investigation is 
dispositive.
    During our review of the petition, we discussed the scope with the 
petitioners to ensure that it accurately reflects the product for which 
the domestic industry is seeking relief. Moreover, as discussed in the 
preamble to the Department's regulations (see Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27295, 27323 (May 19, 1997)), 
we are setting aside a period of time for parties to raise issues 
regarding product coverage. The Department encourages all parties to 
submit such comments by August 31, 2000. Comments should be addressed 
to Import Administration's Central Records Unit at Room 1870, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230. The period of scope consultations is intended to 
provide the Department with ample opportunity to consider all comments 
and consult with parties prior to the issuance of the preliminary 
determination.

Export Price and Normal Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department based its decision to 
initiate this investigation. The sources of data for the deductions and 
adjustments relating to home market price and U.S. price are also 
discussed in the Initiation Checklist. Should the need arise to use any 
of this information as facts available under section 776 of the Act in 
our preliminary or final determinations, we may re-examine the 
information and revise the margin calculations, if appropriate.
Export Price
    The petitioner identified Saskatchewan Minerals and Millar Western 
Industries Ltd. as the major producers and exporters of subject 
merchandise in Canada.
    The petitioner determined export price (EP) based on direct and 
contemporaneous sales or offers for sales to U.S. unaffiliated 
purchasers of anhydrous sodium sulfate, through invoices and 
affidavits. This information was obtained from industry sources in the 
United States. The petitioner calculated a net U.S. price by 
subtracting freight expenses.
Normal Value
    With respect to normal value (NV), the petitioner provided home 
market prices based on invoices and affidavits. These products are 
comparable to the products exported to the United States which serve as 
the basis for EP. The petitioners calculated NV by deducting foreign 
movement expenses, commissions, and domestic packing expenses. The 
petitioners also adjusted NV for differences in credit expenses.
    In addition, the petitioner provided information demonstrating 
reasonable grounds to believe or suspect that sales of anhydrous sodium 
sulfate in the home market were made at prices below the cost of 
production (COP), in accordance with section 773(b) of the Act, and 
requested that the Department conduct a country-wide sales-below-cost 
investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacturing (COM), sales, general, and administrative (SG&A) 
expenses, and packing. To calculate the foreign producers' COM, the 
petitioners used the production costs and consumption rates of one of 
the petitioning companies, adjusted for known differences between costs 
incurred to produce sodium sulfate in the United States and in Canada 
using publicly available data. To calculate depreciation and SG&A, the 
petitioners relied upon the experience of the same U.S. producer. We 
recalculated SG&A using the consolidated financial statements of 
GoldCorp Inc., the parent company of Saskatchewan Minerals because this 
information better reflects the experience of Saskatchewan Minerals. 
The petitioners also based financing expenses on the consolidated 
financial statements of this parent company. Based upon the comparison 
of the adjusted prices of the foreign like product in the home market 
to the calculated COP of the product, we find reasonable grounds to 
believe that sales of the foreign like product were made below the COP, 
in accordance with section 773(b)(2)(A)(i) of the Act. Accordingly, the 
Department is initiating a country-wide cost investigation.
    In addition, pursuant to sections 773(a)(4), 773(b) and 773(e) of 
the Act, the petitioners also based NV for sales in Canada on 
constructed value (CV). The petitioners calculated CV using the same 
COM, SG&A, and financial expense figures used to compute Canadian home 
market costs. We recalculated SG&A expenses as noted above. Consistent 
with section 773(e)(2) of the Act, the petitioners also added to CV an 
amount for profit. Profit was based upon a 1999 management report for 
GoldCorp Inc.
    Based on these separate comparisons, the estimated dumping margins 
for anhydrous sodium sulfate from Canada ranged from 19.29 to 100.10 
percent.

Initiation of Cost Investigation

    As noted above, pursuant to section 773(b) of the Act, the 
petitioner provided information demonstrating reasonable grounds to 
believe or suspect that sales in the home market were made at prices 
below the fully allocated COP and, accordingly, requested that the 
Department conduct a country-wide sales-below-COP investigation in 
connection with the requested antidumping investigation. The Statement 
of Administrative Action (SAA), submitted to the U.S. Congress in 
connection with the interpretation and application of the URAA, states 
that an allegation of sales below the COP need not be specific to 
individual exporters or producers. SAA, H.R. Doc. No. 316 at 833 
(1994). The SAA, at 833, states that ``Commerce will consider 
allegations of below-cost sales in the aggregate for a foreign country, 
just as Commerce currently considers allegations of sales at less than 
fair value on a country-wide basis for purposes of initiating an 
antidumping investigation.''
    Further, the SAA provides that ``new section 773(b)(2)(A) retains 
the current requirement that Commerce have 'reasonable grounds to 
believe or suspect' that below cost sales have occurred before 
initiating such an investigation. `Reasonable grounds' * * * exist when 
an interested party provides specific factual information on costs and 
prices, observed or constructed, indicating that sales in the foreign 
market in question are at below-cost prices.'' Id. Based upon the 
comparison of the adjusted prices from the petition for the 
representative foreign like products to their costs of production, we 
find the existence of ``reasonable grounds to believe or suspect'' that 
sales of these foreign like products were made below their respective 
COPs within the meaning of section 773(b)(2)(A)(i) of the Act. 
Accordingly, the Department is initiating the requested country-wide 
cost investigation.

[[Page 47956]]

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of anhydrous sodium sulfate from Canada are being, 
or are likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petition 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 NV. The petitioner contends that the industry's 
injured condition is evident in the declining trends in net operating 
profits, net sales volumes, profit-to-sales ratios, and production 
volumes. The allegations of injury and causation are supported by 
relevant evidence including U.S. Customs import data, lost sales, and 
pricing information. We have assessed the allegations and supporting 
evidence regarding material injury and causation, and have determined 
that these allegations are properly supported by accurate and adequate 
evidence and meet the statutory requirements for initiation (see 
Initiation Checklist at page 4).

Initiation of Antidumping Investigation

    Based upon our examination of the petition on anhydrous sodium 
sulfate, we have found that the petition meets the requirements of 
section 732 of the Act. Therefore, we are initiating an antidumping 
duty investigation to determine whether imports of anhydrous sodium 
sulfate from Canada are being, or are likely to be, sold in the United 
States at less than fair value. Unless this deadline is extended, we 
will make our preliminary determination no later than 140 days after 
the date of this initiation.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of the petition has been provided to the representatives 
of the Government of Canada. We will attempt to provide a copy of the 
public version of each petition to each exporter named in the petition, 
as appropriate.

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 determine, no later than August 24, 2000, whether 
there is a reasonable indication that imports of sodium sulfate from 
Canada are causing material injury, or threatening to cause material 
injury, to a U.S. industry. A negative ITC determination will result in 
the investigation being terminated; otherwise, this investigation will 
proceed according to statutory and regulatory time limits.
    This notice is published pursuant to section 777(i) of the Act.

    Dated: July 31, 2000.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-19821 Filed 8-3-00; 8:45 am]
BILLING CODE 3510-DS-P