68 FR 52747, September 5, 2003
DEPARTMENT OF COMMERCE
International Trade Administration
[C-122-846] [C-122-848]
Final Affirmative Countervailing Duty Determinations: Certain
Durum Wheat and Hard Red Spring Wheat from Canada
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Final Affirmative Countervailing Duty Determinations:
Certain Durum Wheat and Hard Red Spring Wheat from Canada.
-----------------------------------------------------------------------
SUMMARY: The Department of Commerce has made final determinations that
countervailable subsidies are being provided to certain producers and
exporters of certain durum wheat and hard red spring wheat from Canada.
For information on the estimated countervailing duty rates, please see
the ``Suspension of Liquidation'' section, below.
EFFECTIVE DATE: September 5, 2003.
FOR FURTHER INFORMATION CONTACT: Audrey Twyman, Stephen Cho, or Daniel
Alexy, Office of Antidumping/Countervailing Duty Enforcement, Group 1,
Import Administration, U.S. Department of Commerce, Room 3099, 14th
Street and Constitution Avenue, NW, Washington, DC 20230; telephone
(202) 482-3534, (202) 482-3798 and (202) 482-1540, respectively.
SUPPLEMENTARY INFORMATION:
Petitioners
The petitioners in these investigations are the North Dakota Wheat
Commission (hard red spring wheat), United States Durum Growers
Association (durum wheat), and the Durum Growers Trade Action Committee
(durum wheat) (collectively, the ``petitioners'').
Period of Investigations
The period for which we are measuring subsidies is August 1, 2001
to July 31, 2002, which coincides with the fiscal year of the Canadian
Wheat
[[Page 52748]]
Board (``CWB''), the sole responding exporter. See 19 CFR Sec.
351.204(b)(2).
Case History
The following events have occurred since the publication of the
preliminary determinations in the Federal Register on March 10, 2003.
See Preliminary Affirmative Countervailing Duty Determinations and
Alignment of Final Countervailing Duty Determinations with Final
Antidumping Duty Determinations: Certain Durum Wheat and Hard Red
Spring Wheat from Canada, (68 FR 11374) (``Preliminary
Determinations'').
On March 17, 2003, the petitioners submitted ministerial error
allegations relating to the Preliminary Determinations. The Department
of Commerce ('the Department'') addressed these ministerial allegations
in the April 1, 2003, memorandum to Susan Kuhbach entitled
``Ministerial Error Allegations for Preliminary Determination,'' which
is on file in the Department's Central Records Unit in Room B-099 of
the main Department building (``CRU''). The Department sent out
supplemental questionnaires to the Government of Canada (``GOC'') and
the CWB on March 18, 2003 and received responses to these supplemental
questionnaires between March 27 and April 14, 2003. On May 5, 2003, the
Department issued a memorandum entitled ``Preliminary Determination for
the Initial Payment Guarantee Program'' in which the Department
preliminarily determined that the GOC's guarantee of the CWB's initial
payment to producers does not confer a measurable subsidy on hard red
spring or durum wheat. See May 5, 2003, memorandum to Acting Assistant
Secretary Joseph A. Spetrini from Deputy Assistant Secretary Jeffrey
May which is on file in the CRU. The Department's Preliminary
Determinations had not addressed this new subsidy allegation raised by
the petitioners.
On May 16, 2003, the CWB requested an extension of the final
determinations for the dumping and countervailing duty investigations,
therefore the Department published a Notice of Postponement of Final
Antidumping Determinations and Extension of Provisional Measures and
Postponement of Final Countervailing Duty Determinations: Certain Durum
Wheat and Hard Red Spring Wheat from Canada, (68 FR 35381) on June 13,
2003.
The Department conducted verifications of the questionnaire
responses submitted by the GOC, the provincial governments (e.g., the
Government of Alberta (``GOA'') and the Government of Saskatchewan
(``GOS'')), and the CWB from May 5 through May 14, 2003 in Canada. We
received case briefs from the GOC, GOA, GOS, CWB and the petitioners
between June 20 to 23, 2003. These same parties submitted rebuttal
briefs between June 27 to June 30, 2003. We held a hearing in these
investigations on July 8, 2003.
Scope of Investigations
For purposes of these investigations, the products covered are (1)
durum wheat and (2) hard red spring wheat.
1. Durum Wheat
Imports covered by this investigation are all varieties of durum
wheat from Canada. This includes, but is not limited to, a variety
commonly referred to as Canada Western Amber Durum. The merchandise
subject to this investigation is currently classifiable under the
following Harmonized Tariff Schedule of the United States (``HTSUS'')
subheadings: 1001.10.00.10, 1001.10.00.91, 1001.10.00.92,
1001.10.00.95, 1001.10.00.96, and 1001.10.00.99. Although the HTSUS
subheadings are provided for convenience and customs purposes, our
written description of the scope of this proceeding is dispositive.
2. Hard Red Spring Wheat
Imports covered by this investigation are all varieties of hard red
spring wheat from Canada. This includes, but is not limited to,
varieties commonly referred to as Canada Western Red Spring, Canada
Western Extra Strong, and Canada Prairie Spring Red. The merchandise
subject to this investigation is currently classifiable under the
following HTSUS subheadings: 1001.90.10.00, 1001.90.20.05,
1001.90.20.11, 1001.90.20.12, 1001.90.20.13, 1001.90.20.14,
1001.90.20.16, 1001.90.20.19, 1001.90.20.21, 1001.90.20.22,
1001.90.20.23, 1001.90.20.24, 1001.90.20.26, 1001.90.20.29,
1001.90.20.35, and 1001.90.20.96. This investigation does not cover
imports of wheat that enter under the subheadings 1001.90.10.00 and
1001.90.20.96 that are not classifiable as hard red spring wheat.
Although the HTSUS subheadings are provided for convenience and customs
purposes, our written description of the scope of this proceeding is
dispositive.
Scope Comments
Since the Department's Preliminary Determinations, we have received
several requests for exclusions from and clarifications of the scope of
these investigations. On April 24, 2003, Montana Flour & Grains and
Kamut International requested that the Department exclude Khorasan
wheat from the scope of these investigations. The GOC made the same
request on July 31, 2003. On June 27, 2003, the Organic Trade
Association requested that the Department exclude organically produced
wheat from the scope of these investigations. On July 29, 2003,
Cargill, Incorporated (``Cargill'') requested that the Department
clarify the scope of these investigations and specifically exclude from
the scope Canadian Eastern Soft Red Winter Wheat and Canadian Eastern
Hard Red Winter Wheat. On July 30, 2003, the petitioners submitted
comments on all but the Cargill submission, and also raised an
additional issue concerning Canadian feed wheat. We have considered
these requests and the comments from interested parties. We have
determined that organically grown wheat is covered by the scope of
these investigations and that the scope of the hard red spring
investigation should be clarified by adding the following language to
the scope: ``This investigation does not cover imports of wheat that
enter under the subheadings 1001.90.10.00 and 1001.90.20.96 that are
not classifiable as hard red spring wheat.'' For a complete discussion
of these scope issues, see the August 28, 2003, Scope Exclusion and
Clarification Requests: Khorasan Wheat, Organic Wheat, Canadian Eastern
Soft Red Winter Wheat, Canadian Eastern Hard Red Winter Wheat, and
Canadian Feed Wheat memorandum, which is on file in the CRU.
Injury Test
Because Canada is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Tariff Act of 1930, as amended (``the
Act''), the International Trade Commission (``ITC'') is required to
determine whether imports of the subject merchandise from Canada
materially injure, or threaten material injury to, a U.S. industry. On
November 25, 2002, the ITC transmitted to the Department its
preliminary determinations finding that there is a reasonable
indication that an industry in the United States is being materially
injured by reason of imports from Canada of durum and hard red spring
wheat. See Durum and Hard Red Spring Wheat from Canada, 67 FR 71589
(December 2, 2002).
Analysis of Comments Received
All issues raised in the case and rebuttal briefs by parties to
these investigations are addressed in the ``Issues and Decision
Memorandum for the Final Countervailing Duty
[[Page 52749]]
Determinations of the Investigations of Certain Durum Wheat and Hard
Red Spring Wheat from Canada'' from Jeffrey May, Deputy Assistant
Secretary, Import Administration, to James J. Jochum, Assistant
Secretary for Import Administration, dated August 28, 2003, (``Decision
Memorandum''), which is hereby adopted by this notice. Attached to this
notice as an Appendix is a list of the issues which parties have raised
and to which we have responded in the Decision Memorandum. Parties can
find a complete discussion of all issues raised in these investigations
and the corresponding recommendations in this public memorandum which
is on file in the CRU. In addition, a complete version of the Decision
Memorandum can be accessed directly on the Internet at http://www.enforcement.trade.gov/frn/summary/list.htm
under the heading ``Canada.''
The paper copy and electronic version of the Decision Memorandum are
identical in content.
Suspension of Liquidation
In accordance with section 705(c)(1)(B)(i) of the Act, we have
calculated an individual net subsidy rate for each manufacturer of the
subject merchandise. In accordance with sections 777A(e)(2)(B) and
705(c)(5)(A) of the Act, we have set the ``all others'' rate as CWB's
rate, because it is the only exporter/manufacturer investigated. We
determine the total estimated net subsidy rate for the CWB and ``all
others'' to be:
--------------------------------------------------------------------------
Net Subsidy Rate Net Subsidy Rate
Exporter/Manufacturer (Hard Red Spring Wheat) (Durum Wheat)
--------------------------------------------------------------------------
Canadian Wheat Board.......... 5.29 percent 5.29 percent
All Others.................... 5.29 percent 5.29 percent
--------------------------------------------------------------------------
As a result of our Preliminary Determinations and pursuant to
section 705(c)(1)(B)(ii) of the Act, we instructed the U.S. Bureau of
Customs and Border Protection (``BCBP'') to suspend liquidation of all
entries of durum wheat and hard red spring wheat from Canada which were
entered or withdrawn from warehouse, for consumption on or after March
10, 2003, the date of the publication of the Preliminary Determinations
in the Federal Register. In accordance with section 703(d) of the Act,
we instructed the BCBP to discontinue the suspension of liquidation for
subject merchandise for countervailing duty purposes entered on or
after July 8, 2003, but to continue the suspension of liquidation of
entries made from March 10, 2003, through July 7, 2003.
We will issue countervailing duty orders and reinstate the
suspension of liquidation under section 706(a) of the Act if ITC issues
final affirmative injury determinations, and will require a cash
deposit of estimated countervailing duties for such entries of
merchandise in the amounts indicated above. If the ITC determines that
material injury, or threat of material injury, does not exist, these
proceedings will be terminated and all estimated duties deposited or
securities posted as a result of the suspension of liquidation will be
refunded or canceled.
ITC Notification
In accordance with section 705(d) of the Act, we have notified the
ITC of our determinations. In addition, we are making available to the
ITC all non-privileged and non-proprietary information related to these
investigations. We will allow the ITC access to all privileged and
business proprietary information in our files, provided the ITC
confirms that it will not disclose such information, either publicly or
under an Administrative Protective Order (``APO''), without the written
consent of the Assistant Secretary for Import Administration.
Return or Destruction of Proprietary Information
In the event that the ITC issues final negative injury
determination, this notice will serve as the only reminder to parties
subject to an APO of their responsibility concerning the destruction of
proprietary information disclosed under APO in accordance with 19 CFR
351.305(a)(3). Failure to comply is a violation of the APO.
These determinations are published pursuant to sections 703(f) and
777(i) of the Act.
Dated: August 28, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
APPENDIX
List of Comments and Issues in the Decision Memorandum
Comment 1: The Department Should Treat the Government-Leased Railcars
Differently from the Government-Owned Railcars.
Comment 2: The Provision of Government-Owned and Leased Railcars is
Tied to Non-U.S. Markets.
Comment 3: The Provision of Rail Cars Does Not Result in an Indirect
Subsidy to the CWB.
Comment 4: Countervailablility of Subsidies Given to Third Party
Service Providers.
Comment 5: The Governments' Entrustment or Direction of the Railways to
Provide Rail Service.
Comment 6: The Provision of Government-Owned and Leased Railcar Confers
No Benefit.
Comment 7: Measurement of Benefit from the Government-Provided
Railcars.
Comment 8: The Revenue Cap Does Confer a Benefit.
Comment 9: The Rail Freight Revenue Cap Does Not Provide a Financial
Contribution.
Comment 10: The Department Should Determine That the Revenue Cap Does
Not Provide a Financial Contribution Because It is Consistent With
Market Principles.
Comment 11: The Benefit of the Revenue Cap Extends to All CWB
Shipments, Including Shipments to the United States.
Comment 12: The Closure Fee for Grain Dependent Branch Lines Confers a
Financial Contribution.
Comment 13: Impact of the Lending and Initial Payment Guarantees on the
CWB's Cost of Borrowing.
Comment 14: The Benchmark.
Comment 15: The Borrowing Guarantee is Tied to Non-U.S. Markets.
Comment 16: The Department's Analysis of the Initial Payment Guarantee
is Based on Incomplete and Inaccurate Data.
[FR Doc. 03-22662 Filed 9-4-03; 8:45 am]