68 FR 75486, December 31, 2003 DEPARTMENT OF COMMERCE International Trade Administration [A-122-849] Notice of Initiation of Antidumping Investigation: Ready-to-Cook Kosher Chicken and Parts Thereof From Canada AGENCY: Import Administration, International Trade Administration, Department of Commerce. ACTION: Initiation of Antidumping Investigation. ----------------------------------------------------------------------- EFFECTIVE DATE: December 31, 2003. FOR FURTHER INFORMATION CONTACT: Magd Zalok at (202) 482-4162 or Howard Smith at (202) 482-5193, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230. Initiation of Investigation The Petition On December 1, 2003, the Department of Commerce (the Department) received a petition against imports of ready-to-cook Kosher chicken and parts thereof from Canada, filed in proper form by Empire Kosher Poultry, Inc. (the petitioner). On December 9, 2003, the Department issued a questionnaire to the petitioner requesting additional information and clarification of certain information contained in the petition. The Department received a response to its questionnaire on December 11, 2003. In accordance with section 732(b)(1) of the Tariff Act of 1930, as amended (the Act), the petitioner alleges that imports of ready-to-cook Kosher chicken and parts thereof from Canada are being, or are likely to be, sold in the United States at less-than-fair-value (LTFV) within the meaning of section 731 of the Act, and that such imports from Canada are materially injuring, or are threatening to materially injure, an industry in the United States. The Department finds that the 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 antidumping investigation that it is requesting the Department to initiate. See infra, ``Determination of Industry Support for the Petition.'' Scope of Investigation The merchandise covered by this investigation is ready-to-cook chicken from Canada, whether fresh, chilled or frozen and whether whole or cut-up in pieces, that has been certified as Kosher or Glatt Kosher. Symbols indicating kosher certification include, but are not limited to, COR, MK, OU, CRC. Ready to cook Kosher and Glatt kosher chicken is also identified by the number of the agricultural plant in Canada from which the product originated. For instance, ready-to-cook Kosher chicken manufactured in plant number 24 carries the COR symbol representing the Canadian Jewish Congress of Toronto. Excluded from the scope of this investigation are Kosher or Glatt Kosher chicken wings (if unattached to any other chicken part) and offal, such as necks, gizzards, livers, and hearts. Cooked chicken or chicken parts, ready to cook non-kosher whole chicken or chicken parts are outside the scope of this investigation. The merchandise subject to this investigation is classifiable under subheadings 0207.11.00.20, 0207.11.00.40, 0207.12.00.20, 0207.12.00.40, 0207.13.00.00, and 0207.14.00.40 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs [[Page 75487]] purposes, our written description of the scope of this investigation is dispositive. As discussed in the preamble to the Department's regulations (Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)), we are setting aside a period for parties to raise issues regarding product coverage. The Department encourages all parties to submit such comments within 20 days of publication of this notice. Comments should be addressed to Import Administration's Central Records Unit, 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. Period of Investigation The anticipated period of investigation (POI) is October 1, 2002, through September 30, 2003. 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. The Department shall determine that the petition has been filed by, or on behalf of, the industry 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; 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. 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 for the petition using any statistically valid sampling method to poll the industry. Section 771(4)(A) of the Act defines the ``industry'' as the producers 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 (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 the law.\1\ --------------------------------------------------------------------------- \1\ 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, 642-44 (Ct. Int'l Trade 1988) (``the ITC does not look behind ITA's determination, but accepts ITA's determination as to which merchandise is in the class of merchandise sold at LTFV''). --------------------------------------------------------------------------- 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. The petitioner does not offer a definition of domestic like product distinct from the scope of the investigation. Based on our analysis of the information presented by the petitioner, we have determined that there is a single domestic like product, ready-to-cook Kosher chicken and parts thereof, which is defined in the ``Scope of Investigation'' section above, and we have analyzed industry support in terms of this domestic like product. The petition identifies a number of U.S. companies, in addition to Empire Kosher Poultry, Inc., that are engaged in the production of ready-to-cook Kosher chicken. The petition includes a letter from one of these companies, David Elliot Poultry Farm, in which the company states that it supports the petition. The Department received no opposition to the petition from domestic producers of the like product. Our review of the data provided in the petition indicates that the petitioner has established industry support representing over 50 percent of total production of the domestic like product. Therefore, the domestic producers or workers who support the petition account for at least 25 percent of the total production of the domestic like product, and the requirements of section 732(c)(4)(A)(i) of the Act are met. Furthermore, 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. Thus, the requirements of section 732(c)(4)(A)(ii) of the Act also are met. Finally, because the petition has established industry support representing over 50 percent of total production of the domestic like product, industry polling is unnecessary. 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 also Office of AD/CVD Enforcement Initiation Checklist (Initiation Checklist), Attachment I, Industry Support section, dated December 22, 2003, on file in the Central Records Unit, Room B-099 of the main Department of Commerce building. Export Price and Normal Value The following is a description of the allegation of sales at LTFV upon which the Department based its decision to initiate this investigation. The sources of data used to derive the deductions and adjustments relating to U.S. price and normal value (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 in our preliminary or final determination, we may re-examine the information and revise the margin calculations, if appropriate. Export Price The petitioner alleged that the ready-to-cook Kosher chicken and parts thereof produced in Canada by Chai Poultry Inc. (Chai Poultry) and Marvid Poultry Inc. (Marvid) was sold to U.S. distributors prior to importation of the merchandise into the United States. Therefore, the petitioner based U.S. price on export price (EP). The petitioner based EP for ready-to-cook Kosher chicken and parts thereof on price quotes provided to U.S. distributors by Chai Poultry for whole ready-to-cook Kosher chicken, Kosher chicken legs, and boneless skinless Kosher chicken breasts, reduced by estimated freight charges. [[Page 75488]] Normal Value The petitioner based NV on prices reflected in three invoices that Chai Poultry issued to a Canadian distributor during the POI. These invoices are for sales of whole Kosher chicken, Kosher chicken legs, and boneless skinless Kosher chicken breasts. The petitioner adjusted the invoice prices for movement charges in the home market and differences in the costs incurred to pack merchandise for sale in the U.S. and home markets. The estimated dumping margins in the petition, based on a comparison between EP and NV, range from 33.33 percent to 39.54 percent. Fair Value Comparisons Based on the data provided by the petitioner, there is reason to believe that imports of ready-to-cook Kosher chicken and parts thereof from Canada are being, or are likely to be, sold at LTFV. 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 imports from Canada of the subject merchandise sold at less than NV. The petitioner contends that the industry's injured condition is evident in the sales volume and market share lost to unfair imports, as well as in the rapidly declining and depressed U.S. prices. The allegations of injury and causation are supported by relevant evidence including U.S. import data, lost sales, and pricing information. We have assessed the allegations and supporting evidence regarding 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 the Initiation Checklist, Attachment II. Initiation of Antidumping Investigation Based upon our examination of the petition on ready-to-cook Kosher chicken and parts thereof from Canada, we find that it meets the requirements of section 732 of the Act. Therefore, we are initiating an antidumping investigation to determine whether imports of ready-to-cook Kosher chicken and parts thereof from Canada are being, or are likely to be, sold in the United States at LTFV. Unless the deadline is extended pursuant to section 733(b)(1)(A) of the Act, 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 made available to the representatives of the Government of Canada. We will attempt to provide a copy of the public version of the petition to each exporter named in the petition, as provided for under 19 CFR Sec. 351.203(c)(2). ITC Notification We will notify the ITC of our initiation as required by section 732(d) of the Act. Preliminary Determination by the ITC The ITC will preliminarily determine no later than January 15, 2004, whether there is a reasonable indication that imports of ready- to-cook Kosher chicken and parts thereof 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 issued and published pursuant to section 777(i) of the Act. Dated: December 22, 2003. Holly A. Kuga, Acting Assistant Secretary for Import Administration. [FR Doc. 03-32228 Filed 12-30-03; 8:45 am]