[Federal Register: November 30, 2007 (Volume 72, Number 230)]
[Notices]
[Page 67703-67711]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30no07-35]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-915]
Light-walled Rectangular Pipe and Tube from the People's Republic
of China: Preliminary Affirmative Countervailing Duty Determination and
Alignment of Final Countervailing Duty Determination with Final
Antidumping Duty Determination
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce preliminarily determines that
countervailable subsidies are being provided to producers and exporters
of light-walled rectangular pipe and tube from the People's Republic of
China. For information on the estimated subsidy rates, see the
``Suspension of Liquidation'' section of this notice.
EFFECTIVE DATE: November 30, 2007.
FOR FURTHER INFORMATION CONTACT: Damian Felton or Shane Subler, AD/CVD
Operations, Office 1, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
0133 and (202) 482-0189, respectively.
SUPPLEMENTARY INFORMATION:
Case History
The following events have occurred since the publication of the
Department of Commerce's (the Department) notice of initiation in the
Federal Register. See Notice of Initiation of Countervailing Duty
Investigation: Light-Walled Rectangular Pipe and Tube from the People's
Republic of China, 72 FR 40281 (July 24, 2007) (Initiation Notice).
On August 7, 2007, the Department selected the two largest Chinese
producers/exporters of light-walled rectangular pipe and tube (LWRP),
Qingdao Xiangxing Steel Pipe Co., Ltd. (Qingdao) and Zhangjiagang
Zhongyuan Pipe-Making Co., Ltd. (ZZPC), as mandatory respondents. See
Memorandum to Stephen J. Claeys, Deputy Assistant Secretary for Import
Administration, ``Respondent Selection'' (August 4, 2007). This
memorandum is on file in the Department's Central Records Unit in Room
B-099 of the main Department building (CRU). On August 7, 2007, we
issued the countervailing duty (CVD) questionnaire to the Government of
the People's Republic of China (GOC), Qingdao and ZZPC.
On August 22, 2007, the International Trade Commission (ITC) issued
its affirmative preliminary determination that there is a reasonable
indication that an industry in the United States is materially injured
by reason of allegedly subsidized imports of LWRP from the People's
Republic of China (PRC). See Light-Walled Rectangular Pipe and Tube
from China, Korea, Mexico and Turkey, Investigation Nos. 701-TA-449 and
731-TA-1118-1121, 72 FR 49310 (Preliminary) (August 28, 2007).
On August 24, 2007, we published a postponement of the preliminary
determination of this investigation until November 26, 2007. See Light-
Walled Rectangular Pipe and Tube from the People's Republic of China:
Notice of Postponement of Preliminary Determination in the
Countervailing Duty Investigation, 72 FR 48618 (August 24, 2007).
Petitioners\1\ filed a new subsidy allegation on August 29, 2007.
The GOC submitted comments responding to petitioners' new subsidy
allegation on September 10, 2007. On September 20, 2007, the Department
determined to investigate aspects of the newly alleged subsidy relating
to currency retention. See Memorandum to Susan Kuhbach, Director, AD/
CVD Operations, Office 1, ``New Subsidy Allegation'' (September 20,
2007). Questions regarding this newly alleged subsidy were sent to the
GOC and the respondent companies on September 20, 2007.
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\1\ Allied Tube & Conduit; Atlas Tube; Bull Moose Tube Company;
California Steel and Tube; EXLTUBE; Hannibal Industries; Levitt Tube
Company LLC, Maruichi American Corporation; Searing Industries;
Southland Tube; Vest Inc.; Welded Tube; and Western Tube and Conduit
(collectively, petitioners).
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We received responses to our CVD questionnaires from ZZPC, the GOC,
and a voluntary respondent, Kunshan Lets Win Steel Machinery Co., Ltd.
(``Lets Win'') on September 27, 2007, September 28, 2007, October 1,
2007, October 2, 2007, and October 3, 2007. Qingdao, however, did not
respond to the Department's CVD questionnaire. The petitioners filed
comments on the responses from ZZPC and Lets Win on October 9, 2007,
and comments on the GOC's responses on October 17, 2007.
On October 15, 2007, the Department accepted Lets Win as a
voluntary respondent to the proceeding pursuant to 19 CFR 351.204(d).
See Memorandum to Stephen J. Claeys, Deputy Assistant Secretary for
Import Administration, ``Voluntary Respondent Selection'' (October 15,
2007). Then, on October 24, 2007, the Department issued a letter giving
Qingdao a final opportunity to respond to the CVD questionnaire issued
on August 7, 2007. We never received a CVD questionnaire response from
Qingdao. We address the use of facts otherwise available for Qindago
below.
We issued supplemental questionnaires as follows: the GOC on
October 16, 2007, October 24, 2007, and November 19, 2007; Lets Win on
October 17, 2007; and ZZPC on October 17 and October 18, 2007. We
received responses to these supplemental questionnaires as follows: the
GOC on October 23, 2007, November 7, 2007 and November 21, 2007; ZZPC
on November 5, 2007, and November 14, 2007; and Lets Win on October 31,
2007. We received a corrected response from ZZPC on November 23, 2007,
but are not considering this submission for the purposes of this
preliminary determination. This submission came three days before the
preliminary
[[Page 67704]]
determination and, thus, the Department was unable to complete the
necessary analyses of ZZPC's submission. This data will be considered
for the final determination.
The GOC and petitioners filed comments in advance of the
preliminary determination on November 13 and 14, 2007, respectively.
Finally, Lets Win submitted an updated questionnaire response on
November 16, 2007, which was filed after the deadline originally set by
the Department.
Scope Comments
In accordance with the preamble to the Department's regulations, we
set aside a period of time in our initiation notice for parties to
raise issues regarding product coverage, and encouraged all parties to
submit comments within 20 calendar days of publication of that notice.
See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323, (May
19, 1997) and Initiation Notice, 72 FR at 40281. We did not receive any
comments.
Scope of the Investigation
The merchandise that is the subject of this investigation is
certain welded carbon-quality light-walled steel pipe and tube, of
rectangular (including square) cross section (LWR), having a wall
thickness of less than 4mm.
The term carbon-quality steel includes both carbon steel and alloy
steel which contains only small amounts of alloying elements.
Specifically, the term carbon-quality includes products in which none
of the elements listed below exceeds the quantity by weight
respectively indicated: 1.80 percent of manganese, or 2.25 percent of
silicon, or 1.00 percent of copper, or 0.50 percent of aluminum, or
1.25 percent of chromium, or 0.30 percent of cobalt, or 0.40 percent of
lead, or 1.25 percent of nickel, or 0.30 percent of tungsten, or 0.10
percent of molybdenum, or 0.10 percent of niobium, or 0.15 percent
vanadium, or 0.15 percent of zirconium. The description of carbon-
quality is intended to identify carbon-quality products within the
scope. The welded carbon-quality rectangular pipe and tube subject to
this investigation is currently classified under the Harmonized Tariff
Schedule of the United States (``HTSUS'') subheadings 7306.61.50.00 and
7306.61.70.60. While HTSUS subheadings are provided for convenience and
customs purposes, our written description of the scope of this
investigation is dispositive.
Use of Facts Otherwise Available
Sections 776(a)(1) and (2) of the Tariff Act of 1930, as amended
(the Act), provide that the Department shall apply ``facts otherwise
available'' if, inter alia, necessary information is not on the record
or an interested party or any other person: (A) withholds information
that has been requested; (B) fails to provide information within the
deadlines established, or in the form and manner requested by the
Department, subject to subsections (c)(1) and (e) of section 782 of the
Act; (C) significantly impedes a proceeding; or (D) provides
information that cannot be verified as provided by section 782(i) of
the Act.
Where the Department determines that a response to a request for
information does not comply with the request, section 782(d) of the Act
provides that the Department will so inform the party submitting the
response and will, to the extent practicable, provide that party the
opportunity to remedy or explain the deficiency. If the party fails to
remedy the deficiency within the applicable time limits and subject to
section 782(e) of the Act, the Department may disregard all or part of
the original and subsequent responses, as appropriate. Section 782(e)
of the Act provides that the Department ``shall not decline to consider
information that is submitted by an interested party and is necessary
to the determination but does not meet all applicable requirements
established by the administering authority'' if the information is
timely, can be verified, is not so incomplete that it cannot be used,
and if the interested party acted to the best of its ability in
providing the information. Where all of these conditions are met, the
statute requires the Department to use the information if it can do so
without undue difficulties.
In this case, Qingdao did not provide information we requested that
is necessary to determine a countervailing duty rate for this
preliminary determination. Specifically, Qingdao did not respond to the
Department's requests on August 7, 2007, and October 24, 2007, to
respond to the CVD questionnaire. Thus, in reaching our preliminary
determination, pursuant to sections 776(a)(2)(A) and (C) of the Act, we
have based Qingdao's countervailing duty rate on facts otherwise
available.
We have also identified one program for which the GOC did not
provide the requested information. Specifically, in our questionnaire,
we asked the GOC to provide information about the hot-rolled steel
industry in the PRC (including a description of the industry, users of
hot-rolled steel in the PRC, and whether hot-rolled steel producers are
state-owned enterprises (SOEs)). The GOC limited its response to the
``hot-rolled steel narrow strip'' industry, claiming that LWRP is
produced chiefly from this form of hot-rolled steel. In our
supplemental questionnaire, we asked the GOC to provide the requested
information for the hot-rolled steel industry as a whole. While some
limited information was provided in the GOC's supplemental
questionnaire response (November 7, 2007), the GOC did not provide a
breakdown of the production accounted for by SOEs or that accounted for
by private producers. Thus, in reaching our preliminary determination,
pursuant to sections 776(a)(2)(A) and (C) of the Act, we are relying on
facts otherwise available to determine the countervailable subsidy
conferred by the government's provision of hot-rolled steel for less
than adequate remuneration.
Section 776(b) of the Act further provides that the Department may
use an adverse inference in applying the facts otherwise available when
a party has failed to cooperate by not acting to the best of its
ability to comply with a request for information. Section 776(b) of the
Act also authorizes the Department to use as adverse facts available
(AFA) information derived from the petition, the final determination, a
previous administrative review, or other information placed on the
record.
Section 776(c) of the Act provides that, when the Department relies
on secondary information rather than on information obtained in the
course of an investigation or review, it shall, to the extent
practicable, corroborate that information from independent sources that
are reasonably at its disposal. Secondary information is defined as
``{i{time} nformation derived from the petition that gave rise to the
investigation or review, the final determination concerning the subject
merchandise, or any previous review under section 751 concerning the
subject merchandise.'' See Statement of Administrative Action (SAA)
accompanying the Uruguay Round Agreements Act, H. Doc. No. 316, 103d
Cong., 2d Session (1994) at 870. Corroborate means that the Department
will satisfy itself that the secondary information to be used has
probative value. See SAA at 870. To corroborate secondary information,
the Department will, to the extent practicable, examine the reliability
and relevance of the information to be used. The SAA emphasizes,
however, that the Department need not prove that the
[[Page 67705]]
selected facts available are the best alternative information. See SAA
at 869.
In selecting from among the facts available for Qingdao, the
Department has determined that an adverse inference is warranted,
pursuant to section 776(b) of the Act. By failing to submit a response
to the Department's CVD questionnaire, Qingdao did not cooperate to the
best of its ability in this investigation. Accordingly, we find that an
adverse inference is warranted to ensure that Qingdao will not obtain a
more favorable result than had it fully complied with our request in
this investigation.
Similarly, we are applying an adverse inference in selecting among
the facts available for valuing the benefit conferred by the GOC's
provision of hot-rolled steel for less than adequate remuneration. In
its response, the GOC stated, ``it is difficult to provide a definitive
assessment'' of the share of hot-rolled production accounted for by
SOEs and private suppliers because there are so many producers in
China. See GOC supplemental questionnaire response (November 7, 2007)
at 9. The failure to provide this information within the established
deadlines has impeded our investigation. Moreover, the GOC has not
provided us with any plausible explanation as to why it cannot provide
us with the information within the established deadlines. Thus, we
preliminarily conclude that the GOC has failed to act to the best of
its ability.
Selection of the Adverse Facts Available Rate
In deciding which facts to use as AFA, section 776(b) of the Act
and 19 CFR 351.308(c)(1) authorize the Department to rely on
information derived from (1) the petition, (2) a final determination in
the investigation, (3) any previous review or determination, or (4) any
information placed on the record. It is the Department's practice to
select, as AFA, the highest calculated rate in any segment of the
proceeding. See, e.g., Certain In-shell Roasted Pistachios from the
Islamic Republic of Iran: Final Results of Countervailing Duty
Administrative Review, 71 FR 66165 (November 13, 2006), and
accompanying Issues and Decision Memorandum at ``Analysis of
Programs.''
The Department's practice when selecting an adverse margin from
among the possible sources of information is to ensure that the margin
is sufficiently adverse ``as to effectuate the purpose of the facts
available role to induce respondents to provide the Department with
complete and accurate information in a timely manner.'' See Notice of
Final Determination of Sales at Less than Fair Value: Static Random
Access Memory Semiconductors From Taiwan; 63 FR 8909, 8932 (February
23, 1998). The Department's practice also ensures ``that the party does
not obtain a more favorable result by failing to cooperate than if it
had cooperated fully.'' See SAA at 870. In choosing the appropriate
balance between providing a respondent with an incentive to respond
accurately and imposing a rate that is reasonably related to the
respondent's prior commercial activity, selecting the highest prior
margin ``reflects a common sense inference that the highest prior
margin is the most probative evidence of current margins, because, if
it were not so, the importer, knowing of the rule, would have produced
current information showing the margin to be less.'' See Rhone Poulenc,
Inc. v. United States, 899 F. 2d 1185, 1190 (Fed. Cir. 1990).
Because Qingdao failed to act to the best of its ability, as
discussed above, for each program examined, we made the adverse
inference that Qingdao benefitted from the program unless the record
evidence made it clear that Qingdao could not have received benefits
from the program because, for example, we have preliminarily found the
program not countervailable. See, e.g., Certain Cold-Rolled Carbon
Steel Flat Products From Korea; Final Affirmative CVD Determination, 67
FR 62102 (October 3, 2002) and accompanying Issues and Decision
Memorandum at ``Methodology and Background Information.'' To calculate
the program rates, we have generally relied upon the highest program
rate calculated for any responding company in this investigation as
adverse facts available. See Certain In-shell Roasted Pistachios from
the Islamic Republic of Iran: Final Results of Countervailing Duty
Administrative Review, 71 FR 66165 (November 13, 2006) and accompanying
Issues and Decision Memorandum at ``Analysis of Programs.''
Thus, for programs based on the provision of goods at less than
adequate remuneration, we have used the ZZPC rate for the provision of
hot-rolled steel for less than adequate remuneration. For value added
tax (VAT) and grant programs, we are unable to utilize company-specific
rates from this proceeding because neither Lets Win nor ZZPC received
any countervailable subsidies from these subsidy programs. Therefore,
for VAT and grant programs we are applying the highest subsidy rate for
any program otherwise listed, which in this instance is ZZPC's rate for
the provision of hot-rolled steel for less than adequate remuneration.
Finally, for the seven alleged income tax programs pertaining to
either the reduction of the income tax rates or the payment of no
income tax, we have applied an adverse inference that Qingdao paid no
income tax during the period of investigation (i.e., calendar year
2006). The standard income tax rate for corporations in the PRC is 30
percent, plus a 3 percent provincial income tax rate. Therefore, the
highest possible benefit for these seven income tax rate programs is 33
percent. We are applying the 33 percent AFA rate on a combined basis
(i.e., the seven programs combined provided a 33 percent benefit). This
33 percent AFA rate does not apply to income tax deduction or credit
programs. For income tax deduction or credit programs we are applying
the highest subsidy rate for any program otherwise listed, which in
this instance is ZZPC's rate for the provision of hot-rolled steel at
less than adequate remuneration. See Memorandum to the File, entitled
Selection of the Adverse Facts Available Rate for Qingdao Xiangxing
Steel Pipe Co., Ltd.'' (November 26, 2007) (this memorandum is on file
in the Department's CRU).
We do not need to corroborate the calculated subsidy rates we are
using as AFA because they are not considered secondary information as
they are based on information obtained in the course of this
investigation. See section 776(c) of the Act; see also the SAA at 870.
Regarding the GOC's failure to provide requested information
regarding the hot-rolled steel industry in the PRC, the Department is
preliminarily rejecting prices in the PRC as possible benchmarks for
determining whether hot-rolled steel is being provided for less than
adequate remuneration. Instead, as described in the Programs
Preliminarily Determined to be Countervailable/Provision of Inputs for
Less than Adequate Remuneration/Hot-rolled Steel section below, we are
using a world market price as the benchmark to value this subsidy.
Because this information is taken from the petition, it is
secondary information and must be corroborated to the extent
practicable. We have compared the world-market prices being used to the
prices of hot-rolled steel imports into the PRC during the POI, and
find that the world-market prices are reliable and relevant. See
Memorandum from Damian Felton to Susan Kuhbach Re: Preliminary
Affirmative Countervailing Duty Determination: Light-walled Rectangular
Pipe and Tube from the
[[Page 67706]]
People's Republic of China; Preliminary Results Calculation Memorandum
for Zhangjiagang Zhongyuan Pipe-Making Co., Ltd.; Jiangsu Qiyuan Group
Co., Ltd.; Jiangsu Zhongjia Steel Co., Ltd.; Zhangjiagang Zhongxin
Steel Product Co., Ltd.; and Zhangjiagang Baoshuiqu Jiaqi International
Business Co., Ltd. (November 26, 2007) (ZZPC Calculation Memorandum).
Alignment of Final Countervailing Duty Determination with Final
Antidumping Duty Determination
On July 24, 2007, the Department initiated the countervailing duty
and antidumping duty investigations of LWRP from the PRC. See
Initiation Notice and Initiation of Antidumping Duty Investigations:
Light-Walled Rectangular Pipe and Tube from Republic of Korea, Mexico,
Turkey, and the People's Republic of China, 72 FR 40274 (July 24,
2007). The countervailing duty investigation and the antidumping duty
investigation have the same scope with regard to the merchandise
covered.
On November 16, 2007, petitioners submitted a letter, in accordance
with section 705(a)(1) of the Act, requesting alignment of the final
countervailing duty determination with the final determination in the
companion antidumping duty investigation of LWRP from the PRC.
Therefore, in accordance with section 705(a)(1) of the Act and 19 CFR
351.210(b)(4), we are aligning the final countervailing duty
determination with the final determination in the companion antidumping
duty investigation of LWRP from the PRC. The final countervailing duty
determination will be issued on the same date as the final antidumping
duty determination, which is currently scheduled to be issued on April
7, 2008. See Notice of Postponement of Preliminary Determination of
Antidumping Duty Investigation: Light-Walled Rectangular Pipe and Tube
from the People's Republic of China, 72 FR 65564 (November 21, 2007).
Application of the Countervailing Duty Law to Imports from the PRC
On October 25, 2007, the Department published Coated Free Sheet
Paper from the People's Republic of China: Final Affirmative
Countervailing Duty Determination, 72 FR 60645 (October 25, 2007) (CFS
from the PRC). In that determination, the Department found, ''. . .
given the substantial differences between the Soviet-style economies
and the PRC's economy in recent years, the Department's previous
decision not to apply the CVD law to these Soviet-style economies does
not act as a bar to proceeding with a CVD investigation involving
products from China.'' CFS from the PRC, and accompanying Issues and
Decision Memorandum at Comment 6; see also Memorandum to David M.
Spooner, ``Countervailing Duty Investigation of Coated Free Sheet Paper
from the People's Republic of China - Whether the Analytical Elements
of the Georgetown Steel Opinion are Applicable to China's Present-day
Economy,'' (March 29, 2007) at 2 (Georgetown Steel Memo).
More recently, the Department preliminarily determined that it is
appropriate and administratively desirable to identify a uniform date
from which the Department will identify and measure subsidies in the
PRC for purposes of the CVD law. See Circular Welded Carbon Quality
Steel Pipe from the People's Republic of China: Preliminary Affirmative
Countervailing Duty Determination; Preliminary Affirmative
Determination of Critical Circumstances; and Alignment of Final
Countervailing Duty Determination with Final Antidumping Duty
Determination, 72 FR 63875 (November 13, 2007) (CWP from the PRC). In
CWP from the PRC, we preliminarily determined that date to be December
11, 2001, the date on which the PRC became a member of the WTO.
Therefore, for the reasons outlined in CWP from the PRC, we have
limited our analysis to subsidies bestowed after December 11, 2001, for
this preliminary determination.
Period of Investigation
The period for which we are measuring subsidies, or the period of
investigation (POI), is calendar year 2006.
Subsidies Valuation Information
Allocation Period
The average useful life (AUL) period in this proceeding as
described in 19 CFR 351.524(d)(2) is 15 years according to the U.S.
Internal Revenue Service's 1977 Class Life Asset Depreciation Range
System for assets used to manufacture primary steel mill products. No
party in this proceeding has disputed this allocation period.
Attribution of Subsidies
The Department's regulations at 19 CFR 351.525(b)(6)(i) state that
the Department will normally attribute a subsidy to the products
produced by the corporation that received the subsidy. However, 19 CFR
351.525(b)(6)(ii) directs that the Department will attribute subsidies
received by certain other companies to the combined sales of those
companies if (1) cross-ownership exists between the companies, and (2)
the cross-owned companies produce the subject merchandise, are a
holding or parent company of the subject company, produce an input that
is primarily dedicated to the production of the downstream product, or
transfer a subsidy to a cross-owned company. The Court of International
Trade (CIT) has upheld the Department's authority to attribute
subsidies based on whether a company could use or direct the subsidy
benefits of another company in essentially the same way it could use
its own subsidy benefits. See Fabrique de Fer de Charleroi v. United
States, 166 F. Supp. 2d. 593, 604 (CIT 2001).
According to 19 CFR 351.525(b)(6)(vi), cross-ownership exists
between two or more corporations where one corporation can use or
direct the individual assets of the other corporation(s) in essentially
the same ways it can use its own assets. This regulation states that
this standard will normally be met where there is a majority voting
interest between two corporations or through common ownership of two
(or more) corporations.
Lets Win: Lets Win responded on behalf of itself, a Taiwanese-owned
``productive'' foreign invested enterprise. Lets Win also named two
affiliates involved in the company's export activities. These companies
are located outside of the PRC and are not included in our analysis.
ZZPC: In its response, ZZPC identified numerous affiliated
companies and responded on behalf of itself, a producer of the subject
merchandise, and four of its affiliates: ZZPC's parent company, Jiangsu
Qiyuan Group Co., Ltd. (Group); and three input suppliers to ZZPC,
Jiangsu Zhongjia Steel Co., Ltd. (JZS), Zhangjiagang Zhongxin Steel
Product Co., Ltd. (ZZSP), and Zhangjiagang Baoshuiqu Jiaqi
International Business Co., Ltd. (Jiaqi). The remaining affiliates do
not produce subject merchandise or otherwise fall within the situations
described in 19 CFR 351.525(b)(6)(iii)-(v). Therefore, they are not
addressed further here.
The details of the affiliations between ZZPC, Group, JZS, ZZSP, and
Jiaqi are proprietary and, hence, addressed separately. See ZZPC
Calculation Memorandum. Based on the reported information, we
preliminarily determine that ZZPC, Group, JZS, ZZSP, and Jiaqi are
cross-owned companies within the meaning of 19 CFR 35.525(b)(6)(vi).
Because they are cross-owned and because Group is the parent
company of
[[Page 67707]]
ZZPC, we preliminarily determine that any subsidies bestowed on Group
are properly attributed to Group's consolidated sales under 19 CFR
351.525(b)(6)(iii). With respect to Jiaqi, this company is a trading
company and does not produce any merchandise. Instead, it purchased and
provided inputs to ZZPC during the POI. Because it is not an input
producer, we are not treating Jiaqi as an input supplier as described
in 19 CFR 351.525(b)(6)(iv) (which refers to subsidies received by the
input producer). Instead, for the preliminary determination, we are
treating any subsidies conferred by the government's provision of hot-
rolled steel for less than adequate remuneration as having been
transferred to ZZPC through Jiaqi's resale of the hot-rolled steel to
ZZPC, consistent with 19 CFR 351.525(b)(6)(v).
ZZPC's other input suppliers, JZS and ZZSP, provide ZZPC with steel
strip. These companies are not trading companies: both produce cold-
rolled steel. The types of inputs they provide to ZZPC are proprietary
and are addressed separately. See ZZPC Calculation Memorandum.
In its November 13, 2007, submission, the GOC argues, inter alia,
that any hot-rolled or cold-rolled products sold by JZS and ZZSP cannot
be considered ``primarily dedicated'' to the production of LWRP or any
particular downstream products, as that term is used in 19 CFR
351.525(b)(6)(iv). We agree that there is no evidence on the record to
support a finding that these cold-rolled products are primarily
dedicated to ZZPC's production of the downstream product and,
therefore, for purposes of this preliminary determination we are not
attributing any subsidies received by these cross-owned cold-rolled
steel producers to LWRP produced by ZZPC.
However, for any hot-rolled steel products which ZZPC purchased
from JZS or ZZSP, we preliminarily determine that these companies are
not input suppliers as described in 19 CFR 351.525(b)(6)(iv). Instead,
as with the trading company, Jiaqi, we are treating any subsidies
conferred by the government's provision of hot-rolled steel for less
than adequate remuneration as having been transferred to ZZPC through
JZS' and ZZSP's sale of hot-rolled steel products to ZZPC, consistent
with 19 CFR 351.525(b)(6)(v).
Creditworthiness
Petitioners alleged that Baosteel received countervailable loans
and that it was uncreditworthy (see Initiation Notice, 72 FR at 36671).
Because we did not select Baosteel as a mandatory respondent in this
investigation, we are making no finding regarding that company's
creditworthiness.
Analysis of Programs
Based upon our analysis of the petition and the responses to our
questionnaires, we determine the following:
I. Programs Preliminarily Determined to Be Countervailable
A. Income Tax Subsidies for Foreign Invested Enterprises (FIEs)
Reduced Income Tax Rates for FIEs Based on Location
FIEs are encouraged to locate in designated coastal economic zones,
special economic zones, and economic and technical development zones in
the PRC through preferential tax rates. This program was originally
created in 1988 under the Provisional Regulations of the Ministry of
Finance of the People's Republic of China Concerning the Reduction and
Exemption from Enterprise Income Tax and Consolidated Industrial and
Commercial Tax for the Encouragement of Foreign Investment in Coastal
Open Economic Zones and is currently administered under the Income Tax
Law of the People's Republic of China for Enterprises with Foreign
Investment and Foreign Enterprises (FIE Tax Law). Under Article 7 of
the FIE Tax Law, ``productive'' FIEs located in the designated economic
zones pay corporate income tax at a reduced rate of either 15 or 24
percent, depending on the zone. According to the GOC, the FIE Tax Law
has been repealed effective January 1, 2008, and there are no
provisions regarding this program in the new Income Tax Law of the
People's Republic of China for Enterprises.
Lets Win is located in a coastal economic development zone and paid
income tax at the reduced rate of 24 percent during the POI.
We preliminarily determine that the reduced income tax rate paid by
``productive'' FIEs under this program confers a countervailable
subsidy. The reduced rate is a financial contribution in the form of
revenue forgone by the GOC and it provides a benefit to the recipient
in the amount of the tax savings. See section 771(5)(D)(ii) of the Act
and 19 CFR 351.509(a)(1). We further determine preliminarily that the
reduction afforded by this program is limited to enterprises located in
designated geographic regions and, hence, is specific under section
771(5A)(D)(iv) of the Act.
To calculate the benefit, we treated the income tax savings enjoyed
by Lets Win as a recurring benefit, consistent with 19 CFR
351.524(c)(1), and divided the company's tax savings received during
the POI by the company's total sales during that period. To compute the
amount of the tax savings, we compared the rate Lets Win would have
paid in the absence of the program (30 percent) with the rate it paid
(24 percent).
On this basis, we preliminarily determine that Lets Win received a
countervailable subsidy of 0.27 percent ad valorem under this program.
B. Provision of Inputs for Less than Adequate Remuneration
Hot-rolled Steel
Hot-rolled steel suppliers in the PRC have varying ownership
structures including state ownership, joint stock companies with state
and foreign ownership, collective ownership, and wholly private
ownership. According to the GOC, prices for hot-rolled steel are not
set by regulation. Instead, Chinese producers set prices taking into
account their production costs and supply and demand considerations.
The GOC further claims that prices are differentiated in the hot-rolled
steel market, with both state-owned and private producers pricing at
different levels for the same product and that, at any given point in
time, pricing leaders can be private or state-owned producers.
During the POI, the ZZPC companies purchased from state-owned
suppliers, collectives, and privately-owned companies. Lets Win
provided information that it purchased hot-rolled steel only from
privately-owned suppliers.
We preliminarily determine that the GOC provided hot-rolled steel
to certain of the ZZPC companies during the POI for less than adequate
remuneration through the GOC-owned steel companies. In its response,
the GOC listed the industries that use hot-rolled steel: construction,
machinery and equipment (including industrial boilers, internal
combustion engines, machine tools, electrical tools, smelter equipment,
chemical equipment, feedstock processing machinery, packaging
machinery, tractors, pollution prevention and remediation equipment,
electricity generators and electrical motors, among others),
automotive, pipe and tube, shipbuilding, railway industries (including
profiled bar for rail construction and locomotive engines),
petrochemical (including oil country tubular goods), household
appliances, and freight containers. See GOC supplemental questionnaire
response (November 7, 2007) at 10. We preliminarily find that these
industries
[[Page 67708]]
are ``limited in number'' and, hence, that the provision of hot-rolled
steel is de facto specific under section 771(5A)(D)(iii)(I) of the Act.
See also Notice of Final Affirmative Countervailing Duty: Certain Cold-
Rolled Carbon Flat Steel Products from the Republic of Korea, 67 FR
62102 (October 3, 2002) and accompanying Issues and Decision Memorandum
at Comment 1 and Comment 2, where the Department found that Posco's
provision of hot-rolled coil was countervailable.
We further determine preliminarily that the GOC's provision of hot-
rolled steel through its state-owned producers is a government
financial contribution within the meaning of section 771(5)(D)(iii) of
the Act and that it confers a benefit on ZZPC because the good is being
sold for less than adequate remuneration as described in section
771(5)(E)(iv) of the Act. In determining what constitutes adequate
remuneration, the Department is not relying on prices in the PRC, as
explained in the Selection of the Adverse Facts Available Rate section,
above. Instead, in accordance with 19 CFR 351.511(a)(2), we have used a
world market price as a benchmark to compare to the respondent's
reported purchase prices from state-owned steel suppliers.
Specifically, we used the ``World Export Price'' from Steel
Benchmarker, as provided in Exhibit 173, Attachment 2, Volume IV, of
the Petition (July 6, 2007).
We have rejected internal prices in the PRC because we do not know
the share of steel produced and sold by SOEs in the PRC. As explained
in the preambular language addressing 19 CFR 351.511(a), ``While we
recognize that government involvement in a market may have some impact
on the price of the good or service in that market, such distortion
will normally be minimal unless the government provider constitutes a
majority, or in certain circumstances, a substantial portion of the
market.'' See Countervailing Duties; Final Rule, 63 FR 65348, 65377
(November 25, 1998) (CVD Preamble). Because we are not able to gauge
the extent of government involvement in the PRC hot-rolled steel
market, we have made the adverse inference that the market is dominated
by SOEs and that this distorts the prices for this product in the PRC.
To calculate the benefit, we compared the monthly weighted-average
prices paid by the ZZPC companies for hot-rolled steel purchased from
SOEs to the average monthly prices reported in Steel Benchmarker. Steel
Benchmarker does not include prices for January - March 2006;
therefore, we have used the April 2006 price as a surrogate. We treated
the difference in the amounts that ZZPC would have paid using the Steel
Benchmarker prices to the amounts actually paid as the benefit, and
divided the benefit by ZZPC's total sales. On this basis, we
preliminarily determine that ZZPC received a countervailable benefit of
2.99 percent ad valorem.
In its November 14, 2007 submission, ZZPC reported that the hot-
rolled steel strip purchased by JZS from the SOE, Shangahi Baosteel
Steel Products Trade Co., Ltd., Wuxi Branch is used to produce
electronic pipe, which ZZPC claims is non-subject merchandise. ZZPC
provided no evidence to support these claims. Therefore, for the
preliminary determination, we are treating this steel as having been
used as an input for LWRP.
Water
According to the GOC, water suppliers in the PRC are highly
localized. Many suppliers are SOEs, particularly in cities, but there
is also private ownership. Water prices generally are regulated by the
local governments. See, e.g., the Regulation on Administration of City
Water Supply (Decree 158 of the State Council, 1994), GOC response
(September 28, 2007) at Exhibit 118.
The GOC has provided the water rate schedules in effect during the
POI for Zhangjiagang, where ZZPC is located. Rate changes were effected
during the POI and both sets of rates were submitted.
The GOC states that all users within a given rate category pay the
same fixed rate per ton. However, based on our comparison, the rates
actually paid by ZZPC are lower than the published rates for industrial
users. In our supplemental questionnaire to ZZPC, we asked about this
discrepancy and, while ZZPC claims it did not receive a discount, it
did not adequately explain why its rates diverged from the published
rates.
Based on this, we preliminarily determine that the GOC's provision
of water to ZZPC during the POI confers a countervailable subsidy. The
provision of water to this company is de facto specific because ZZPC
pays a different price from the price paid by all industrial users in
this jurisdiction. See section 771(5A)(D)(iii)(I) of the Act.
We further determine preliminarily that the GOC's provision of
water is a financial contribution within the meaning of section
771(5)(D)(iii) of the Act and that it confers a benefit on ZZPC because
the good is being sold for less than adequate remuneration as described
in section 771(5)(E)(iv) of the Act. In determining what constitutes
adequate remuneration, the Department is relying on the schedules of
prices paid by other industrial users in Zhangjiagang City during the
POI. We are using this benchmark because no market-determined prices
for water have been provided for this jurisdiction and we have no
information indicating that there is a world-market price for water.
See 19 CFR 351.511(a)(i) and (ii). Consequently, we are selecting a
benchmark under 19 CFR 351.511(a)(iii). As stated in the preambular
language discussing that section of our regulations, where the
government is the sole provider of a good or service, including in the
case of water, the Department may assess whether the government price
was set in accordance with market principles, which may include an
analysis of whether there is price discrimination among the users of
the good or service that is provided and that ``{w{time} e would only
rely on a price discrimination analysis if the government good or
service is provided to more than a specific enterprise or industry, or
group thereof.'' See CVD Preamble at 63 FR 65378. In the case of
Zhangjiagang City, the GOC has reported that there are over 1,000
industrial users paying the published schedule rates for water.
Therefore, we preliminarily determine that the published rate for
industrial users of water in Zhangjiagang City is an appropriate
benchmark for determining whether the GOC provided water to ZZPC for
less than adequate remuneration.
To calculate the benefit, we compared the monthly weighted-average
prices paid by ZZPC for water with the published rates for industrial
users of water in Zhangjiagang City. We treated the difference in the
amounts that ZZPC would have paid using the published rates to the
amounts actually paid as the benefit, and divided the benefit by ZZPC's
total sales. On this basis, we preliminarily determine that ZZPC
received a countervailable benefit of less than 0.005 percent ad
valorem.
Where the countervailable subsidy rate for a program is less than
.005 percent, the program is not included in the total countervailing
duty rate. See, e.g., Final Results of Countervailing Duty
Administrative Review: Low Enriched Uranium from France, 70 FR 39998
(July 12, 2005), and the accompanying Issues and Decision Memorandum,
at ``Purchases at Prices that Constitute 'More than Adequate
Remuneration''' (citing Final Results of Administrative Review: Certain
Softwood Lumber Products from Canada, 69 FR 75917 (December 20,
[[Page 67709]]
2004), and the accompanying Issues and Decision Memorandum, ``Other
Programs Determined to Confer Subsidies'').
Regarding Lets Win, the GOC provided the rate schedule that came
into effect on September 10, 2006, for the water authority in Kunshan.
Subsequent to that date, the rates actually paid by Lets Win were less
than, equal to, or in excess of the newly established rates for
industrial water users, suggesting that it took some time for the new
rates to be reflected in the bills and payments. We intend to request
an explanation from Lets Win and to request the rate schedule for the
period prior to September 10, 2006, and will address whether the GOC
provided water to Lets Win for less than adequate remuneration in our
final determination.
II. Programs Preliminarily Determined to Be Not Countervailable
A. Government Policy Lending Program
In CFS from the PRC, the Department found Government Policy Lending
to provide a countervailable subsidy because record evidence indicated
that: (i) the GOC had a policy in place to encourage and support the
growth and development of the forestry and paper industry through
preferential financing initiatives as illustrated in the GOC's five-
year plans and industrial policies; and (ii) the GOC's policy toward
the paper industry was carried out by the central and local governments
through the provision of loans extended by GOC Policy Banks and state-
owned commercial banks. See CFS from the PRC and accompanying Issues
and Decision Memorandum at Comment 8.
In this investigation, the evidence submitted to date does not
support a finding that the LWRP industry in the PRC received
preferential financing pursuant to the GOC's Iron and Steel Policy.
Therefore, we preliminarily determine that producers and exporters of
LWRP in the PRC did not receive government policy loans. We will,
however, continue to investigate whether the GOC's Iron and Steel
Policy or other plans apply to the LWRP industry, and, if so, the
purpose of those policies and whether preferential lending was provided
to the LWRP industry pursuant to those policies.
B. Provision of Inputs for Less than Adequate Remuneration
Electricity
Electricity: According to the GOC, electricity in the PRC is
produced by numerous power plants and it is transmitted for local
distribution by two state-owned transmission companies, State Grid and
China South Power Grid. Generally, prices for uploading electricity to
the grid and transmitting it are regulated by the GOC, as are the final
sales prices. See, e.g., Circular on Implementation Measures Regarding
Reform of Electricity Prices, (FAGAIJIAGE {2005{time} No. 514,
National Development and Reform Commission) at Appendix 3, Provisional
Measures on Prices for Sales of Electricity at Article 29 (``Government
departments in charge of pricing at various levels shall be responsible
for the administration and supervision of electricity sales prices.''),
GOC response (September 28, 2007) at Exhibit 114.
Electricity consumers are divided into broad categories such as
residential, commercial, large-scale industry and agriculture. The
rates charged vary across customer categories and within customer
categories based on the amount of electricity consumed. Moreover, among
industrial users, certain industries are specifically broken out and
these industries receive special, discounted rates. Based on our review
of the rate schedules submitted for Jiangsu Province (where both Lets
Win and ZZPC are located), discounted rates are established for
producers of calcium carbide, electrolyte caustic soda, synthetic
ammonia, yellow phosphorus with electric furnace, chlorine alkali,
electrolyzed aluminum, and fertilizer. Thus, there is not a discounted
rate for LWRP producers and, according to the GOC, the types of
industries in Jiangsu province that fall into the large-scale industry
category (which includes the LWRP producers) cover virtually all
economic sectors outside of agriculture and services.
Based on the record evidence, we preliminarily determine that the
provision of electricity to large-scale enterprises in the PRC is
neither de jure nor de facto specific. Although producers in a few
particular industries are eligible for discounts under the law, all
other large-scale enterprises within a locality pay the same rate for
their electricity. Moreover, the absence of price discrimination among
most users may also support a preliminary finding that electricity is
not being provided to LWRP producers for less than adequate
remuneration. See Programs Preliminarily Determined to Be
Countervailable/Provision of Goods for Less Than Adequate Remuneration/
Water, above.
On this basis, we preliminarily determine that the GOC's provision
of electricity does not confer a countervailable subsidy.
C. VAT Rebates (originally referred to as “Export Incentive Payments Characterized as VAT Rebates”)
According to the GOC, the ``exemption, deduction and refund'' of
VAT applies if a manufacturer exports its self-produced goods by itself
or via a trading company. See Article 1 of the Circular on Further
Promotion of Methodology of ``Exemption, Deduction, and Refund'' of Tax
for Exported Goods (CAISHUI (2002) No. 7), GOC response (September 28,
2007) at Exhibit 98. Under the ``VAT refund system,'' when a producer/
exporter purchases inputs (e.g,, raw materials, components, fuel and
power) it pays a VAT based on the purchase price of inputs. The GOC
reported the VAT rates paid by LWRP producers/exports for inputs are as
follows: raw materials and electricity - 17 percent; and, fuel and
water - 13 percent. Once the exporter/producer exports subject
merchandise, a VAT payment and tax exemption form is prepared and filed
with the relevant state tax authority. LWRP exporters received a VAT
refund of 13 percent of the export price during the POI.
The Department's regulations state that in the case of an exemption
upon export of indirect taxes, a benefit exists only to the extent that
the Department determines that the amount exempted ``exceeds the amount
levied with respect to the production and distribution of like products
when sold for domestic consumption.'' 19 CFR 351.517(a); see also 19
CFR 351.102 (for a definition of ``indirect tax''). Information in the
companies' responses shows that Lets Win and ZZPC paid the VAT on their
inputs, and applied for and received a VAT refund on their export
sales.
To determine whether a benefit was provided under this program, the
Department analyzed whether the amount of VAT exempted during the POI
exceeded the amount levied with respect to the production and
distribution of like products when sold for domestic consumption.
Because the VAT rate levied on LWRP in the domestic market (17 percent)
exceeded the amount of VAT exempted upon the export of LWRP (13
percent), the Department preliminarily determines that, for the
purposes of this investigation, the VAT refund received upon the export
of LWRP does not confer a countervailable benefit.
The GOC has additionally reported that effective July 1, 2007, the
VAT refund rate for exports of LWRP was set at zero percent.
[[Page 67710]]
III. Post-POI Programs
E. Government Restraints on Exports
Hot-rolled Steel and Zinc: Petitioners alleged that the GOC
restrains exports of hot-rolled steel and zinc by means of export
taxes, which artificially suppress the price a producer in the PRC can
charge for these inputs into LWRP.
In its response, the GOC provided the Announcement on Adjustment of
Provisional Import or Export Duty for Certain Merchandises (PRC Customs
Announcement No. 22, 2007) See GOC questionnaire response (September
28, 2007) at Exhibit 122. This document shows that on May 30, 2007, the
GOC announced a provisional export duty rate for hot-rolled steel of
five percent and an increase in the provisional export duty rate for
zinc from five percent to ten percent. These changes were implemented
retroactively to begin on July 1, 2006.
The POI for this investigation is January 1, 2006, through December
31, 2006, and the export restraints allegedly giving rise to a subsidy
were announced on May 30, 2007, i.e., after the POI. Although the
export duties were implemented retroactively, there is no basis to
conclude that the export duties affected the prices paid by the
respondents for hot-rolled steel and zinc prior to May 30, 2007,
because those purchases had already been made. Therefore, any subsidy
conferred by the export duties on hot-rolled steel and zinc would
properly be addressed under our Program-wide Change regulation, 19 CFR
351.526(a). That regulation states that the Department may take a
program-wide change into account in establishing the estimated
countervailing duty cash deposit rate if: (1) the Department determines
that subsequent to the period of investigation or review, but before a
preliminary determination in an investigation, a program-wide change
has occurred; and (2) the Department is able to measure the change in
the amount of countervailable subsidies provided under the program in
question.
In this investigation, Lets Win submitted its monthly purchase
prices for hot-rolled steel and zinc for periods prior to and following
the May 30, 2007 announcement. ZZPC did not purchase zinc, but ZZPC
submitted its purchase prices for hot-rolled steel. The data show
fluctuations in the prices of these inputs both before and after the
announcement of the export duties. Moreover, the data available for the
months after the announcement are limited. For these reasons, we cannot
measure the subsidy, if any, arising from the imposition of the export
duties, and we are not including these alleged subsidy programs in our
cash-deposit rates.
IV. Programs Determined To Be Terminated
A. Exemption from Payment of Staff and Worker Benefits for Export-oriented Industries
The Department has determined that this program was terminated on
January 1, 2002, with no residual benefits. See CFS from the PRC and
accompanying Issues and Decision Memorandum at ``Programs Determined to
be Terminated.''
V. Programs Preliminarily Determined To Be Not Used By Lets Win and
ZZPC
We preliminarily determine that Lets Win and ZZPC did not apply for
or receive benefits during the POI under the programs listed below.
A. Loans and Interest Subsidies Provided Pursuant to the Northeast
Revitalization Program
B. The ``Two Free, Three Half'' Program
C. Local Income Tax Exemption and Reduction Program for ``Productive''
FIEs
D. Income Tax Exemption Program for Export-oriented FIEs
E. Corporate Income Tax Refund Program for Reinvestment of FIE Profits
in Export-oriented Enterprises
F. Reduced Income Tax Rate for Technology and Knowledge Intensive FIEs
G. Reduced Income Tax Rate for High or New Technology FIEs
H. Preferential Tax Policies for Research and Development at FIEs
I. Income Tax Credits on Purchases of Domestically Produced Equipment
by Domestically Owned Companies
J. Income Tax Credits on Purchases of Domestically Produced Equipment
by FIEs
K. Program to Rebate Antidumping Legal Fees in Shenzen and Zhejiang
Provinces
L. Funds for ``Outward Expansion'' of Industries in Guangdong Province
M. Export Interest Subsidy Funds for Enterprises Located in Shenzhen
and Zhejiang Provinces
N. Loans Pursuant to Liaoning Province's Five-year Framework
O. VAT and Tariff Exemptions on Imported Equipment
P. VAT Rebates on Domestically Produced Equipment
Q. The State Key Technologies Renovation Project Fund
R. Grants to Loss-making State-owned Enterprises
S. Provision of Inputs for Less Than Adequate Remuneration: Natural Gas
T. Foreign Currency Retention Program
For purposes of this preliminary determination, we have relied on
the GOC's and responding companies' responses to preliminarily
determine non-use of the programs listed above. During the course of
verification, the Department will further investigate whether these
programs were used by respondent companies during the POI.
VI. Programs for Which More Information is Required
A. Provision of Land for Less than Adequate Remuneration
Citing Article 29 of the Implementation Rules of the Law on
Administration of Land, land-use rights can be obtained from the
government in one of three ways: 1) purchase; 2) lease; and 3) as an
equity investment. See GOC response (September 28, 2007) at Exhibit
121. The GOC further states that the price of land-use rights may be
determined by means of public bidding, auction, independent appraisal,
and negotiation. According to the GOC, no formal appraisal was
conducted in connection with the sale of land use rights to Lets Win or
ZZPC. Instead, the purchase prices for these companies' land use rights
``were determined through arm's length negotiations, taking into
consideration the prices of land in the neighboring area, local
economic development level, and the specific conditions of the land
under consideration.'' See GOC Supplemental Questionnaire Response
(November 7, 2007) at 17.
Lets Win reported that it purchased its land use rights from its
local county government in March 2001. ZZPC reported that it owns land
use rights for three lots. For two lots, the land use rights were
purchased prior to December 11, 2001. Because these purchases occurred
prior to December 11, 2001, we preliminarily determine that the GOC's
provision of these land use rights does not confer a countervailable
subsidy. See Application of the Countervailing Duty Law to Imports from
the PRC section, above.
ZZPC purchased its third lot from the Zhangjiagang Jingang Town
Assets Management Company after December 11, 2001. According to ZZPC
and the GOC, no appraisals or valuations of the land use rights were
conducted to support this purchase.
It is difficult for the Department to reconcile the GOC's claim
that the local land authority took into consideration ``the prices of
land in the neighboring area, local economic development level, and the
specific conditions of the land''
[[Page 67711]]
with the fact that no appraisal or valuation was conducted. Neither the
GOC nor ZZPC has provided any explanation of the process used by the
Zhangjiagang Jingang Town Assets Management Company or ZZPC to
establish the value of the land use rights, a description of the
negotiation process, or the prices for land use rights for comparable
plots. Without this information, we are not able to determine whether
the provision of land to ZZPC should be considered specific within the
meaning of section 771(5A) of the Act and, if so, how to determine what
would constitute adequate remuneration for the land use rights.
We intend to seek further information on these questions and to
issue an interim analysis describing our preliminary findings with
respect to this program before the final determination so that parties
will have the opportunity to comment on our findings before the final
determination. In the meantime, we invite parties to submit information
and argument on the basis for making a specificity determination with
respect to the provision of land and how adequate remuneration should
be determined. These submissions should be made no later than December
21, 2007.
Verification
In accordance with section 782(i)(1) of the Act, we will verify the
information submitted by the respondents prior to making our final
determination.
Suspension of Liquidation
In accordance with section 703(d)(1)(A)(i) of the Act, we
calculated an individual rate for each exporter/manufacturer of the
subject merchandise. We preliminarily determine the total estimated net
countervailable subsidy rates to be:
------------------------------------------------------------------------
Net Subsidy
Exporter/Manufacturer Rate
------------------------------------------------------------------------
Kunshan Lets Win Steel Machinery Co., Ltd.................. 0.27
percent
Qingdao Xiangxing Steel Pipe Co............................ 77.85
percent
Zhangjiagang Zhongyuan Pipe-making Co., Ltd., Jiangsu 2.99
Qiyuan Group Co, Ltd...................................... percent
All-Others................................................. 2.99
percent
------------------------------------------------------------------------
Sections 703(d) and 705(c)(5)(A) of the Act state that for
companies not investigated, we will determine an all-others rate by
weighting the individual company subsidy rate of each of the companies
investigated by each company's exports of the subject merchandise to
the United States. However, the all-others rate may not include zero
and de minimis rates or any rates based solely on the facts available.
In this investigation, because we have only one rate that can be used
to calculate the all-others rate, ZZPC's rate, we have assigned that
rate to all-others.
In accordance with sections 703(d)(1)(B) and (2) of the Act, we are
directing CBP to suspend liquidation of all entries of LWRP from the
PRC that are entered, or withdrawn from warehouse, for consumption on
or after the date of the publication of this notice in the Federal
Register, and to require a cash deposit or bond for such entries of
merchandise in the amounts indicated above. Neither the suspension of
liquidation nor the requirement for a cash deposit or bond will apply
to merchandise produced and exported by Lets Win because the Department
has preliminarily determined that Lets Win received de minimis
subsidies.
ITC Notification
In accordance with section 703(f) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all non-privileged and non-proprietary information relating to this
investigation. 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, without the written consent
of the Assistant Secretary for Import Administration.
In accordance with section 705(b)(2) of the Act, if our final
determination is affirmative, the ITC will make its final determination
within 45 days after the Department makes its final determination.
Disclosure and Public Comment
In accordance with 19 CFR 351.224(b), we will disclose to the
parties the calculations for this preliminary determination within five
days of its announcement.
Case briefs for this investigation must be submitted no later than
one week after the issuance of the last verification report. See 19 CFR
351.309(c) (for a further discussion of case briefs). Rebuttal briefs
must be filed within five days after the deadline for submission of
case briefs, pursuant to 19 CFR 351.309(d)(1). A list of authorities
relied upon, a table of contents, and an executive summary of issues
should accompany any briefs submitted to the Department. Executive
summaries should be limited to five pages total, including footnotes.
Section 774 of the Act provides that the Department will hold a
public hearing to afford interested parties an opportunity to comment
on arguments raised in case or rebuttal briefs, provided that such a
hearing is requested by an interested party. If a request for a hearing
is made in this investigation, the hearing will tentatively be held two
days after the deadline for submission of the rebuttal briefs, pursuant
to 19 CFR 351.310(d), at the U.S. Department of Commerce, 14th Street
and Constitution Avenue, N.W., Washington, D.C. 20230. Parties should
confirm by telephone the time, date, and place of the hearing 48 hours
before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, within 30 days of the publication of this notice, pursuant to 19
CFR 351.310(c). Requests should contain: (1) the party's name, address,
and telephone; (2) the number of participants; and (3) a list of the
issues to be discussed. Oral presentations will be limited to issues
raised in the briefs.
This determination is published pursuant to sections 703(f) and
777(i) of the Act.
Dated: November 26, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-23283 Filed 11-29-07; 8:45 am]
BILLING CODE 3510-DS-S