70 FR 13460, March 21, 2005
DEPARTMENT OF COMMERCE
International Trade Administration
[C-533-842]
Final Affirmative Countervailing Duty Determination:
Bottle-Grade Polyethylene Terephthalate (PET) Resin From India
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) has reached a
final determination that countervailable subsidies are being provided
to producers and exporters of Bottle-Grade (BG) Polyethylene
Terephthalate (PET) Resin from India. For information on the estimated
countervailable subsidy rates, please see the ``Final Determination''
section of this notice.
EFFECTIVE DATE: March 21, 2005.
FOR FURTHER INFORMATION CONTACT: Douglas Kirby or Addilyn Chams-Eddine,
AD/CVD Operations, Office 6, Import Administration, U.S. Department of
Commerce, Room 7866, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202) 482-3782 or (202) 482-0648,
respectively.
SUPPLEMENTARY INFORMATION:
Case History
On August 30, 2004 the Department published the Notice of
Preliminary Affirmative Countervailing Duty Determination and Alignment
with Final Antidumping Duty Determination: Bottle-Grade Polyethylene
Terephthalate (PET) Resin from India, 69 FR 52866 (August 30, 2004)
(Preliminary Determination). Since the issuance of the Preliminary
Determination, the following events have occurred. Between September 9
and November 17, 2004, the Department issued supplemental
questionnaires to each of the respondent parties and all parties
submitted timely responses to the questionnaires. On September 29,
2004, the United States PET Resin Producers Coalition (Petitioner)
requested a hearing pursuant to 19 CFR 351.310(c) and the Department's
Preliminary Determination.
From December 2 through December 17, 2004, the Department conducted
verification of the questionnaire responses provided by the Government
of India (GOI) and the four respondent parties: Reliance Industries,
Ltd. (Reliance), Futura Polyesters, Ltd. (Futura), South Asia
Pertrochem Ltd. (SAPL), and Elque Polyesters Ltd. (Elque). The
Department issued the GOI and the Reliance Industries Ltd. (Reliance)
verification reports on January 25, 2005. See Memoranda to the File,
Countervailing Duty Investigation of Polyethylene Terephthalate (PET)
Resin from India: Verification of the Government of India's (GOI)
Questionnaire Responses (GOI Verification Report); and Countervailing
Duty Investigation of Polyethylene Terephthalate (PET) Resin from
India: Verification of Reliance Industries Ltd. (Reliance Verification
Report). The Department issued the Elque, Futura, and SAPL verification
reports on January 26, 2004. See Memoranda to the File, Countervailing
Duty Investigation of PET Resin from India: Verification of Elque Ltd.
(Elque Verification Report); Countervailing Duty Investigation of
Polyethylene Terephthalate (PET) Resin from India: Verification of
Futura Polyesters Ltd. (Futura Verification Report); and Countervailing
Duty Investigation of PET Resin from India: Verification of South Asia
Petrochem Ltd. (SAPL Verification Report). In addition, on February 14,
2005, the Department issued a memorandum containing our preliminary
analysis of the Export Oriented Unit (EOU) programs which we had noted
in the Preliminary Determination were programs for which additional
information was needed. See Memoranda to the File from Sean Carey,
Acting Program Manager, through Dana S. Mermelstein, Acting Director,
AD/CVD Operations, Office 6, to Barbara E. Tillman, Acting Deputy
Assistant Secretary, for Import Administration, Countervailing Duty
Investigation of Polyethylene Terephthalate (PET) Resin from India:
Preliminary Analysis of the Export Oriented Unit (EOU) Program on Duty
Drawback on Furnace Oil Procured from Domestic Oil Companies Program
and Purchases of Materials and Other Inputs Free of Central Excise Duty
(EOU Program Memorandum).
On February 4, 2005, case briefs were filed by the Petitioner, the
GOI, Reliance, and SAPL. On February 9, 2005, the Petitioner, Reliance,
and SAPL filed rebuttal briefs. Neither Futura nor Elque filed case or
rebuttal briefs. On February 11, 2005, the Petitioner withdrew its
request for a hearing.
The Department also allowed parties a separate opportunity to file
comments and rebuttal comments on our EOU Program Memorandum. On
February 17, 2005, such comments were filed by the Petitioner, the GOI,
Reliance and SAPL. On February 22, 2005, the Petitioner submitted
rebuttal comments. Also, on February 17, 2005, Reliance requested that
the Department proceed with a hearing. On February 18, and February
[[Page 13461]]
22, 2005, the Petitioner requested that the Department reject
Reliance's request for a hearing as untimely. The Department concurred
with the Petitioner that under section 351.310 of the Department's
regulations, the request for a hearing was untimely. See Memorandum to
the File from Douglas M. Kirby, Case Analyst, Office 6, Import
Administration, to Dana S. Mermelstein, Acting Director, AD/CVD
Operations, Office 6, Countervailing Duty Investigation: Polyethylene
Terephthalate (PET) Resin from India; Response to the February 17, 2005
Submission of Reliance Industries Limited (Reliance), dated February
24, 2005.
Period of Investigation
The period of investigation (POI) for which we are measuring
subsidies is April 1, 2003, through March 31, 2004, which corresponds
to the most recently completed fiscal year for all of the respondent
companies. See section 351.204(b)(2) of the Department's regulations.
Scope of the Investigation
The merchandise covered by this investigation is polyethylene
terephthalate (PET) bottle-grade resin, defined as having an intrinsic
viscosity of at least .68 deciliters per gram but not more than .86
deciliters per gram. The scope includes bottle-grade PET resin that
contains various additives introduced in the manufacturing process. The
scope does not include post-consumer recycle (PCR) or post-industrial
recycle (PIR) PET resin; however, included in the scope is any bottle-
grade PET resin blend of virgin PET bottle-grade resin and recycled PET
(RPET). Waste and scrap PET are outside the scope of the investigation.
Fiber-grade PET resin, which has an intrinsic viscosity of less than
.68 deciliters per gram, is also outside the scope of the
investigation.
The merchandise subject to this investigation is properly
classified under subheading 3907.60.0010 of the Harmonized Tariff
Schedule of the United States (HTSUS); however, merchandise classified
under HTSUS subheading 3907.60.0050 that otherwise meets the written
description of the scope is also subject to these investigations.
Although the HTSUS subheadings are provided for convenience and customs
purposes, the written description of the merchandise under
investigation is dispositive.
Analysis of Comments Received
All issues raised by the interested parties in their case and
rebuttal briefs, as well as their comments on our EOU Program Memorandum
are addressed in the ``Issues and Decision Memorandum'' (Decision Memorandum),
dated March 14, 2005, which is hereby adopted by this notice. A list of the
issues which parties have raised is attached to this notice as Appendix I.
Parties can find a complete discussion of all issues raised in this
investigation and the corresponding recommendations in this public memorandum,
which is on file in the Central Records Unit (CRU) at Room B099 of the main
Commerce building. A complete version of the Decision Memorandum is available
at http://www.enforcement.trade.gov under the heading ``Federal Register Notices.''
The paper copy and the electronic version of the Decision Memorandum are
identical in content.
Final Determination
In accordance with section 705(c)(1)(B)(i) of the Act, we have
determined individual rates for Reliance, SAPL, Futura, and Elque. To
calculate the ``all others'' rate, we weight-averaged the individual
company rates by each company's respective sales of subject merchandise
made to the United States during the POI. These rates are summarized in
the table below:
------------------------------------------------------------------------
Subsidy
rate
Producer/exporter (percent ad
valorem)
------------------------------------------------------------------------
Reliance Industries Ltd.................................... 20.26
South Asia Petrochem Ltd................................... 19.08
Futura Polyesters Ltd...................................... 6.15
Elque Polyesters Ltd....................................... 12.41
All Others................................................. 14.63
------------------------------------------------------------------------
Suspension of Liquidation
In accordance with our preliminary affirmative determination, we
instructed U.S. Customs and Border Protection (CBP) to suspend
liquidation of all entries of PET Resin from India, which were entered
or withdrawn from warehouse, for consumption on or after August 30,
2004, the date of the publication of our Preliminary Determination in
the Federal Register. In accordance with section 703(d) of the Act, we
instructed CBP to discontinue the suspension of liquidation for
merchandise entered on or after December 28, 2004, but to continue the
suspension of liquidation of entries made between August 30, 2004,
through December 27, 2004.
If the International Trade Commission (ITC) issues a final
affirmative injury determination, we will issue a countervailing duty
order, reinstate suspension of liquidation under section 706(a) of the
Act for all entries, and require a cash deposit of estimated
countervailing duties for such entries of merchandise at the rates
indicated above. If the ITC determines that material injury, or threat
of material injury, does not exist, this proceeding 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 will notify the
ITC of our determination. In addition, we are making available to the
ITC all non-privileged and non-proprietary information related to this
investigation. We will allow the ITC access to all privileged and
business proprietary information in our files, provided that 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 a final negative injury
determination, this notice will serve as the only reminder to parties
subject to 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.
This determination is issued and published pursuant to sections
705(d) and 777(i) of the Act.
Dated: March 14, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
Appendix I: Issues and Decision Memorandum
I. List of Comments
Comment 1: Futura's Debonding and Adjustment to Duty Free Exemptions
Comment 2: Futura's Central Sales Tax Reimbursement
Comment 3: WBIDC Investment in SAPL
Comment 4: DEPS Credit Offset
Comment 5: EOU Exemptions on Raw Materials
Comment 6: Program-Wide Change of DEPS Rate
Comment 7: Numerator and Denominator for the EPCGS Subsidy Calculation
Comment 8: Benchmark Interest Rates for EPCGS
Comment 9: EPCGS Benefits Received in the POI
Comment 10: Allocation of EPCGS Benefits and 0.5 Percent Test
Comment 11: Reliance's Loan Benchmarks for State of Maharashtra (SOM)
and State of Gujarat (SOG) Sales Tax Incentive Programs
Comment 12: Average Useful Life (AUL) for SAPL's Assets
Comment 13: Effective Interest Rate of SAPL's Pre-Shipment Export Loans
Comment 14: Treatment of Exemptions on Imported Capital Goods
Comment 15: SAPL's Cash Deposit Rate
Comment 16: Central Sales Tax Reimbursements on Raw Materials
Comment 17: EOU Duty Drawback on Furnace Oil
II. Subsidies Valuation Information
A. Loan Benchmarks
B. Allocation Period
C. Trading Company Subsidies
III. Analysis of Programs
A. Programs Determined To Confer Subsidies
1. GOI Programs
a. Pre- and Post-Shipment Export Financing
b. Duty Entitlement Passbook Scheme (DEPS)
c. Income Tax Exemption Scheme, Section 80 HHC
d. Export Promotion Capital Goods Scheme (EPCGS)
e. Export Oriented Units (EOUs) Program: Duty Drawback on
Furnace Oil Procured From Domestic Oil Companies
f. Export Oriented Units (EOUs) Program: Duty-Free Import of
Capital Goods and Raw Materials
g. Export Oriented Units (EOUs) Program: Reimbursement of
Central Sales Tax (CST) Paid on Materials Procured Domestically
2. State Programs
a. State of Gujurat (SOG) Program: Sales Tax Incentive Scheme
b. State of Maharashtra (SOM) Program: Sales Tax Incentive Scheme
c. State of West Bengal (SWB) Sales Tax Incentive Scheme
B. GOI Program Determined To Be Not Countervailable
Export Oriented Units (EOUs) Programs: Purchase of Material and
Other Inputs Free of Central Excise Duty
C. Programs Determined To Be Not Used
GOI Programs
a. Status Certificate Program
b. Market Development Assistance
c. Income Tax Exemption Scheme (Sections 10A and 10B)
d. Loan Guarantees from the GOI
e. Special Economic Zones (SEZs) formerly called Export Processing Zones (EPZs)
D. Program Determined To Be Terminated
Exemption of Export Credit From Interest Taxes GOI Programs
IV. Analysis of Comments
V. Recommendation
[FR Doc. E5-1219 Filed 3-18-05; 8:45 am]