[Federal Register: December 17, 2003 (Volume 68, Number 242)]
[Notices]
[Page 70228-70231]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17de03-40]
[[Page 70228]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-890]
Initiation of Antidumping Duty Investigation: Wooden Bedroom
Furniture from the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: December 17, 2003.
FOR FURTHER INFORMATION CONTACT: Alex Villanueva or Robert Bolling,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, DC 20230; telephone: (202) 482-3208 and (202) 482-3434,
respectively.
SUPPLEMENTARY INFORMATION:
INITIATION OF INVESTIGATION
The Petition
On October 31, 2003, the Department of Commerce (``Department'')
received a Petition on imports of wooden bedroom furniture from the
People's Republic of China (``China'') (``Petition'') filed in proper
form by the American Furniture Manufacturers Committee for Legal Trade
(``Committee'') and its individual members and the Cabinet Makers,
Millmen, and Industrial Carpenters Local 721 (collectively, ``the
Petitioners'') on behalf of the domestic industry and workers producing
wooden bedroom furniture. On November 6, 2003 and November 10, 2003,
the Department requested clarification of certain areas of the Petition
and received responses to both requests on November 12, 2003. On
November 12, 2003, Markor International Furniture (Tianjin)
Manufacturing Co., (``Markor'') and Lacquer Craft Manufacturing
Company, Ltd., (``Lacquer'') submitted comments regarding the industry
support for the Petition. On November 13, 2003, the Department received
comments from Furniture Brands International, Inc. (``FBI''). On
November 20, 2003, the Petitioners amended the Petition to include an
additional margin estimate for a product within the scope of the
investigation. On November 24, 2003, the Department published a notice
in the Federal Register extending the twenty-day initiation
determination deadline and requesting information from domestic
producers of wooden bedroom furniture See Notice of Request for
Information and Extension of Time: Wooden Bedroom Furniture from the
People's Republic of China (``Extension Notice'') 68 FR 65875 (November
24, 2003). On November 24, 2003, the Department requested from the
Petitioners that certain business proprietary information be made
public. On November 28, 2003, the Department received the public
version of the business proprietary information requested on November
24, 2003. On December 2, 2003, the Department received additional
comments regarding industry support from Markor and Lacquer.
Additionally, on December 2, 2003, the Department received comments
from the Petitioners regarding opposition to the Petition. On December
3, 2003, the Department received rebuttal comments to Markor's and
Lacquer's December 2, 2003 comments from the Petitioners. On December
3, 2003, the Department received comments from the Petitioners
regarding the calculation of industry support. On December 4, 2003, the
Petitioners amended the Petition adding four certified labor unions as
Petitioners. Additionally, on December 4, 2003, FBI submitted comments
regarding the calculation of industry support. On December 5, 2003, the
Department received comments from Markor and Lacquer. On December 8,
2003, the Department received comments from FBI and Markor and Lacquer.
On December 9, 2003 the Department received comments from the
Petitioners. Additionally, on December 9, 2003, the Department received
a request from the Petitioners that the Department reject numerous
submissions submitted earlier in this proceeding in accordance with
Section 732(b)(3)(B) of the Tariff Act of 1930, as amended (``the
Act''). On December 9, 2003, the Department returned FBI's comments of
December 8, 2003. See Memorandum to the File from Lisa Shishido, Case
Analyst, Regarding Wooden Bedroom Furniture from the People's Republic
of China, dated December 9, 2003. We note that in FBI's November 13,
2003 comments and Markor and Lacquer's December 8, 2003 comments, both
parties included comments on issues other than industry support, we did
not reject those submission because they contained information
regarding industry support. See Memo to the File from Alex Villanueva,
Senior Case Analyst, Regarding Wooden Bedroom Furniture from the
People's Republic of China: FBI's November 13, 2003 Comments and Markor
and Lacquer's December 8, 2003 Comments, dated December 9, 2003.
However, we did not consider FBI's December 8, 2003 comments and Markor
and Lacquer's December 8, 2003 comments that were not on industry
support. See Import Administration: Antidumping Duty Investigation
Initiation Checklist of Wooden Bedroom Furniture from
China(``Initiation Checklist''), dated December 10, 2003 at Attachment
III. December 10, 2003, FBI revised their comments from December 8,
2003.
In accordance with section 732(b) of the Ac, the Petitioners allege
that imports of wooden bedroom furniture from China 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 and threaten to injury and industry in the United
States.
Scope of Investigation
For purposes of this investigation, the product covered is wooden
bedroom furniture (i.e., subject merchandise). Wooden bedroom furniture
is generally, but not exclusively, designed, manufactured, and offered
for sale in coordinated groups, or bedrooms, in which all of the
individual pieces are of approximately the same style and approximately
the same material and/or finish. The subject merchandise are made
substantially of wood products, including both solid wood and also
engineered wood products made from wood particles, fibers, or other
wooden materials such as plywood, oriented strand board, particle
board, and fiberboard; with or without wood veneers, wood overlays, or
laminates; with or without non-wood components or trim such as metal,
marble, leather, glass, plastic, or other resins; and whether or not
assembled, completed, or finished.
The subject merchandise includes (1) wooden beds such as loft beds,
bunk beds, and other beds; (2) wooden headboards for beds (whether
stand-alone or attached to side rails), wooden footboards for beds,
wooden side rails for beds, and wooden canopies for beds; (3) night
tables, night stands, dressers, commodes, bureaus, mule chests,
gentlemen's chests, bachelor's chests, lingerie chests, wardrobes,
vanities, chessers, chifforobes, and wardrobe-type cabinets; (4)
dressers with framed glass mirrors that are attached to, incorporated
in, sit on, or hang over the dresser; (5) chests-on-chests\1\,
highboys\2\,
[[Page 70229]]
lowboys\3\, chests of drawers\4\, chests\5\, door chests\6\,
chiffoniers\7\, hutches\8\, and armoires\9\; (6) desks, computer
stands, filing cabinets, book cases, or writing tables that are
attached to or incorporated in the subject merchandise; and (7) other
bedroom furniture consistent with the above list.
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\1\ A chest-on-chest is typically a tall chest-of-drawers in two
or more sections (or appearing to be in two or more sections), with
one or two sections mounted (or appearing to be mounted) on a
slightly larger chest; also known as a tallboy.
\2\ A highboy is typically a tall chest of drawers usually
composed of a base and a top section with drawers, and supported on
four legs or a small chest (often 15 inches or more in height).
\3\ A lowboy is typically a short chest of drawers, not more
than four feet high, normally set on short legs.
\4\ A chest of drawers is typically a case containing drawers
for storing clothing
\5\ A chest is typically a case piece taller than it is wide
featuring a series of drawers and with or without one or more doors
for storing clothing. The piece can either include drawers or be
designed as a large box incorporating a lid.
\6\ A door chest is typically a chest with hinged doors to store
clothing, whether or not containing drawers. The piece may also
include shelves for televisions and other entertainment electronics.
\7\ A chiffonier is typically a tall and narrow chest of drawers
normally used for storing undergarments and lingerie, often with
mirror(s) attached.
\8\ A hutch is typically an open case of furniture with shelves
that typically sits on another piece of furniture and provides
storage for clothes.
\9\ An armoire is typically a tall cabinet or wardrobe
(typically 50 inches or taller), with doors, and with one or more
drawers (either exterior below or above the doors or interior behind
the doors), shelves, and/or garment rods or other apparatus for
storing clothes. Bedroom armoires may also be used to hold
television receivers and/or other audio-visual entertainment
systems.
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The scope of the Petition excludes (1) seats, chairs, benches,
couches, sofas, sofa beds, stools, and other seating furniture; (2)
mattresses, mattress supports (including box springs), infant cribs,
water beds, and futon frames; (3) office furniture, such as desks,
stand-up desks, computer cabinets, filing cabinets, credenzas, and
bookcases; (4) dining room or kitchen furniture such as dining tables,
chairs, servers, sideboards, buffets, corner cabinets, china cabinets,
and china hutches; (5) other non-bedroom furniture, such as television
cabinets, cocktails tables, end tables, occasional tables, wall
systems, book cases, and entertainment systems; (6) bedroom furniture
made primarily of wicker, cane, osier, bamboo or rattan; (7) side rails
for beds made of metal if sold separately from the headboard and
footboard; and (8) bedroom furniture in which bentwood parts
predominate.\10\
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\10\ As used herein, bentwood means solid wood made pliable.
Bentwood is wood that is brought to a curved shape by bending it
while made pliable with moist heat or other agency, and then set by
cooling or drying. See Customs' Headquarters' Ruling Letter 043859,
dated May 17, 1976.
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Imports of subject merchandise are classified under statistical
category 9403.50.9040 of the Harmonized Tariff Schedule of the United
States (``HTSUS'') as ``wooden * * * beds'' and under statistical
category 9403.50.9080 of the HTSUS as ``other * * * wooden furniture of
a kind used in the bedroom.'' In addition, wooden headboards for beds,
wooden footboards for beds, wooden side rails for beds, and wooden
canopies for beds may also be entered under statistical category
9403.50.9040 of the HTSUS as ``parts of wood'' and framed glass mirrors
may also be entered under statistical category 7009.92.5000 of the
HTSUS as ``glass mirrors...framed.'' This investigation covers all
wooden bedroom furniture meeting the above description, regardless of
tariff classification. Although the HTSUS subheadings are provided for
convenience and customs purposes, our written description of the scope
of this proceeding 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, we are setting aside a period
for interested parties to raise issues regarding product coverage. See
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27295,
27323 (1997). The Department encourages all interested parties to
submit such comments within 20 calendar days of publication of this
notice.
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 interested
parties prior to the issuance of the preliminary determination.
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: (i) at least 25
percent of the total production of the domestic like product; and (ii)
more than 50 percent of the production of the domestic like product
produced by that portion of the industry expressing support for, or
opposition to, the Petition. Moreover, section 732(c)(4)(D) of the Act
provides that, if the Petition does not establish support of domestic
producers or workers accounting for more than 50 percent of the total
production of the domestic like product, the Department shall: (i) poll
the industry or rely on other information in order to determine if
there is support for the Petition, as required by subparagraph (A), or
(ii) determine industry support using a statistically valid sampling
method.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers 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 law. 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).
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 in
the Petition we have determined there is a single domestic like
product, wooden bedroom furniture, which is defined further in the
``Scope of the Investigations'' section above, and we have analyzed
industry support in terms of that domestic like product.
Based on information provided in the Petition, the share of total
estimated U.S. production of the domestic like product in calendar year
2002
[[Page 70230]]
represented by the Petitioners and the supporting domestic producers
equal over 25 percent of total domestic production but less than 50
percent of production of the domestic like product produced by that
portion of the industry expressing support for, or opposition to, the
Petition. See Extension Notice. Therefore, in accordance with
732(c)(4)(D) of the Act, we polled the industry.
On November 13, 2003, November 17, 2003 and November 19, 2003, we
issued polling questionnaires to all known producers of wooden bedroom
furniture identified in the Petition, listed on the Thomas Register and
found on the internet by the Department. The combined list contained
264 companies. See Memorandum to the File from Michael Holton, Case
Analyst, Regarding the Addresses for All Parties the Department of
Commerce Sent the Polling Questionnaire to on November 13, 2003
(``Addresses Memo''), dated November 14, 2003. The addresses attached
to the Addresses Memo were also used when sending the revised
questionnaires dated November 17, 2003 and November 19, 2003. See
Memorandum to the File from Alex Villanueva, Case Analyst, Regarding
the Addresses for All Parties the Department of Commerce Sent the
Polling Questionnaire on November 17, 2003 and November 19, 2003, dated
December 3, 2003. The questionnaires are on file in the Central Records
Unit (``CRU'') in room B-099 of the main Department of Commerce
building. Additionally, the final questionnaire dated November 19, 2003
was available on the Import Administration website. As noted earlier,
the Department also published a notice in the Federal Register
extending the twenty-day initiation determination deadline and
requesting information from domestic producers of wooden bedroom
furniture. See Extension Notice at 65877, 65878. We requested that each
company complete the polling questionnaire and certify their responses
and requested that all companies respond no later than November 26,
2003 by faxing their responses to the Department at (202) 482-9089.
By the deadline of November 26, 2003, the Department received a
total of 104 responses. See Memorandum to the File from Alex
Villanueva, Case Analysts through Robert A. Bolling, Program Manager
and Edward C. Yang, Office Director, Regarding the Calculation of
Industry Support (``Memo on Industry Support''), dated December 10,
2003 at Attachment II of the Initiation Checklist. Any responses
received after this date were not included in our analysis. See
Extension Notice at 65876 and Initiation Checklist at Attachment II.
The Department will be returning all polling questionnaire responses
not received by November 26, 2003. Pursuant to section 351.104 of the
Department's regulations, the Department has relied upon the responses
to this questionnaire and follow-up phone calls to clarify certain
responses to determine industry support. For a log of the phone calls
made by the Department, please see the Memorandum to the File from Lisa
Shishido, Case Analyst, Regarding the Telephone Call Log Clarifying
Information Received by the Department, dated December 10, 2003. For a
detailed discussion of the responses received please see the Initiation
Checklist at Attachment II. For a discussion on the comments received
from interested parties, please see the Initiation Checklist at
Attachment III. For a detailed discussion of the comments received by
workers, please see the Initiation Checklist at Attachment II. Our
analysis of the data indicates that the domestic producers of wooden
bedroom furniture who support the Petition account for more than 57
percent of the production (by U.S. dollar sales value) of the domestic
like product produced by that portion of the industry expressing
support for, or opposition to, the Petition. See Initiation Checklist
at Attachment II.
Accordingly, the Department determines that the industry support
requirements of section 732(c)(4)(A) of the Act have been met.
Export Price and Normal Value
The following is a description of the allegation of sales at less
than fair value (``LTFV'') upon which the Department based its decision
to initiate this investigation. The sources of data for the deductions
and adjustments relating to the U.S. price and the factors of
production 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 determination, we
may reexamine the information and revise the margin calculations, if
appropriate.
Export Price
The Petitioners identified approximately one-hundred thirty five
Chinese companies as major producers and exporters of wooden bedroom
furniture in China. See Petition at Exhibit 6.
The Petitioners calculated an export price (``EP''). To calculate
export prices for wooden bedroom furniture from China, Petitioners used
invoices for wooden bedroom furniture produced by Chinese producers
that were purchased during the period of investigation (``POI''). Given
the sales terms on the invoice, the Petitioners have used free on board
(``FOB'') prices as the basis for the U.S. price and, conservatively,
have not deducted foreign inland freight from the factory to the port,
brokerage and handling fees, or port charges at the port of
exportation. However, to obtain ex-factory prices, the Petitioners
deducted a percentage of the selling price (price listed on the
invoice) to account for an agent markup for sales made from the agent
to the U.S. customer in the United States. See Initiation Checklist for
further information.
Normal Value
China is a non-market economy country and no determination to the
contrary has yet been made by the Department. See Initiation Checklist
at 4-5. Accordingly, the Petitioners provided a dumping margin
calculation using the Department's NME methodology as required by 19
C.F.R. Sec. 351.202(b)(7)(i)(C) of the Department's regulations.
For the normal value (``NV'') calculation, the Petitioners based
the factors of production, as defined by section 773(c)(3) of the Act
(raw materials, labor and energy), for wooden bedroom furniture using
the factors of production used to make the wooden bedroom furniture on
the invoices used in their calculation of export price above. In order
to accurately calculate the usage of materials used in the production
of the imported furniture, the Petitioners disassembled each piece of
furniture and identified, weighed, and measured each component part.
The items selected by the Petitioners for deconstruction and ultimately
used for the normal value calculation, provide a broad selection of
items within the wooden bedroom furniture like product category.
According to the Petitioners, the dumping margins in the Petition
represent ``each of the products in a standard bedroom suite because
subject imports are typically sold in suites, collections, or groups''
and are ``representative of the prices for imports'' of wooden bedroom
furniture from China during the POI. See Petitioners' November 12, 2003
Submission at 8. However, the amount of labor hours and energy needed
to produce the wooden bedroom furniture items analyzed were based on
the experience of the Petitioners. See Initiation Checklist.
[[Page 70231]]
The Petitioners selected India as their surrogate country. The
Petitioners argued that pursuant to section 773(c)(4) of the Act, India
is an appropriate surrogate because it is a market-economy country that
is at a comparable level of economic development to the NME and is a
significant producer of comparable merchandise. Based on the
information provided by the Petitioners, we believe that the
Petitioners' use of India as a surrogate country is appropriate for
purposes of initiating this investigation. See Initiation Checklist.
In accordance with section 773(c)(4) of the Act, the Petitioners
valued factors of production, where possible, on reasonably available,
public surrogate country data. To value certain raw materials, the
Petitioners used official Indian government import statistics,
excluding those values from countries previously determined by the
Department to be NME countries and imports into India from Indonesia,
Korea and Thailand, in light of the prevalence of export subsidies in
those countries. See Notice of Final Determination of Sales at Less
Than Fair Value: Ferrovanadium from the People's Republic of China 67
FR 71137, 71139 (November 20, 2002). For inputs valued in Indian Rupees
and not contemporaneous with the POI (i.e., April 2003-September 2003),
the Petitioners used information from the wholesale price indices
(``WPI'') in India as published in the International Financial
Statistics of the International Monetary Fund to determine the
appropriate adjustments for inflation. In addition, the Petitioners
made currency conversions, where necessary, based on the average rupee/
U.S. dollar exchange rate for the POI. See Petition at Exhibit 11.
To value the raw materials, (lumber (e.g., ash, birch, maple, oak,
pine, poplar tupelo), other wood items (e.g., cherry wood veneer,
fiberboard, hardboard, okoume plywood, lauan plywood, particle board,
poplar veneer, oak veneer, wood pulls and okoume veneer), fasteners
(e.g., brad & nails, staples, dowels, screws, washers, brass hinges,
nuts, brass bolts and hex key), paints and stains (non-water based
stains, sealers and lacquers), other miscellaneous items (e.g., printed
labels, printed tags, printed paper, glues, plastic furniture fittings,
metal drawer pulls & parts, drawer guide brackets, felt and mirrors),
packing materials (e.g., polyethylene foam, styrofoam, corrugated
cardboard, tape, poly bags, poly straps, plywood, and shrink wrap)),
the Petitioners calculated surrogate values from the Indian import
statistics. See Petition at Exhibits 12 & 13.
To value electricity, the Petitioners calculated surrogate values
using prices paid by industrial electrical users in India from Key
World Energy Statistics published by the International Energy Agency in
2003. However, the price listed in Key World Energy Statistics is for
electricity prices from 2000. Therefore, this price was adjusted for
inflation using the WPI from the International Financial Statistics.
See Petition at Exhibits 12 and 15.
Pursuant to 19 C.F.R. Sec. 351.408(c)(3) of the Department's
regulations, the Department calculates and publishes the surrogate
values for labor to be used in non-market economy cases. Therefore, the
Petitioners used the labor rate of $0.83 per hour listed on the
Department's website. See Petition at Exhibit 14.
The Petitioners calculated surrogate financial ratios (factory
overhead, selling, general and administrative expenses (SG&A) and
profit) using the publicly available financial statements from India
Furniture Products, Ltd., an Indian producer of wooden bedroom
furniture for the period (March 1, 2002-March 31, 2003), the most
recently available financial period.
Based on comparisons of EP to NV, calculated in accordance with
section 773(c) of the Act, the estimated recalculated dumping margin
for wooden bedroom furniture ranges from 158.74 percent to 440.96
percent.
Fair Value Comparisons
Based on the data provided by the Petitioners, there is reason to
believe that imports of wooden bedroom furniture from China are being,
or are likely to be, sold in the United States 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 and is threatened with
material injury, by reason of the imports of the subject merchandise
sold at less than NV. The Petitioners contend that the industry's
injured condition is evident in: (1) increasing imports' market share
and apparent domestic consumption; (2) declining employment; (3)
declining production and capacity utilization; (4) plant closures; and
(5) lost sales and revenues. See Initiation Checklist at Attachment V
(Injury).
The Department assessed the allegations and supporting evidence
regarding material injury and causation and determined that these
allegations are supported by accurate and adequate evidence and meet
the statutory requirements for initiation.
Initiation of Antidumping Investigation
Based upon our examination of the Petition on wooden bedroom
furniture from China, we find 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 wooden bedroom
furniture from China are being, or are likely to be, sold in the United
States at less than fair value. Unless postponed, 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 government
representatives of China.
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, no later than mid-January,
whether there is a reasonable indication that imports of wooden bedroom
furniture from China are causing material injury, or threatening to
cause material injury, to a U.S. industry. A negative ITC determination
will result in this 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: December 10, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-31129 Filed 12-16-03; 8:45 am]
BILLING CODE 3510-DS-S