[Federal Register Volume 74, Number 177 (Tuesday, September 15, 2009)]
[Notices]
[Pages 47210-47225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-22187]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-944]
Certain Oil Country Tubular Goods From the People's Republic of
China: Preliminary Affirmative Countervailing Duty Determination,
Preliminary Negative Critical Circumstances 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 certain oil country tubular goods from the People's Republic of
China. For information on the estimated subsidy rates, see the
``Suspension of Liquidation'' section of this notice.
DATES: Effective Date: September 15, 2009.
FOR FURTHER INFORMATION CONTACT: David Neubacher, Shane Subler, Magd
Zalok, Maryanne Burke, and Henry Almond, 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) 482-5823, (202) 482-0189, (202)
482-4162, (202) 482-5604, and (202) 482-0049, respectively.
SUPPLEMENTARY INFORMATION:
Case History
The following events have occurred since the publication of the
Department of Commerce's (``Department'') notice of initiation in the
Federal Register. See Certain Oil Country Tubular Goods from the
People's Republic of China: Initiation of Countervailing Duty
Investigation, 74 FR 20678 (May 5, 2009) (``Initiation Notice''), and
the accompanying Initiation Checklist.
On May 13, 2009, Maverick Tube Corporation, United States Steel
Corporation, TMK IPSCO, V&M Star LP, Wheatland Tube Corporation, Evraz
Rocky Mountain Steel, and United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers
International Union, AFL-CIO-CLC (``United Steelworkers'')
(collectively, the ``petitioners'') submitted new subsidy allegations
requesting the Department to expand its countervailing duty (``CVD'')
investigation to include additional subsidy programs.\1\ On June 4,
2009, the Department declined to investigate these allegations as the
petitioners did not allege the elements necessary for the imposition of
CVDs or failed to support these allegations with reasonably available
evidence. See Memorandum to Susan Kuhbach, Director, AD/CVD Operations,
Office 1, ``Analysis of Petitioners' New Subsidy Allegations'' (June 4,
2009).
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\1\ See the petitioners' Submission of New Subsidy Allegations
(May 13, 2009).
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On June 3, 2009, the Department selected four Chinese producers/
exporters of certain oil country tubular goods (``OCTG'') as mandatory
respondents, Jiangsu Changbao Steel Tube Co., Ltd. (``Changbao''),
Tianjin Pipe (Group) Co. (``TPCO''), Wuxi Seamless Oil Pipe Co., Ltd.
(``Wuxi''), and Zhejiang Jianli Enterprise Co., Ltd. (``Jianli''). See
Memorandum to John M. Andersen, Acting Deputy Assistant Secretary for
Antidumping and Countervailing Duty Operations, ``Respondent Selection
Memo'' (June 3, 2009). This memorandum is on file in the Department's
Central Records Unit in Room 1117 of the main Department building
(``CRU''). On the same date, we issued the CVD questionnaires to the
Government of the People's Republic of China (``GOC''), Changbao, TPCO,
Wuxi, and Jianli.
On June 10, 2009, the U.S. 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 certain
oil country tubular goods from the People's Republic of China
(``PRC''). See Certain Oil Country Tubular Goods from China;
Determinations, Investigation Nos. 701-TA-463 and 731-TA-1159, 74 FR
27559 (June 10, 2009).
On June 15, 2009, the Department postponed the deadline for the
preliminary determination in this investigation until September 8,
2009. See Certain Oil Country Tubular Goods from the People's Republic
of China: Postponement of Preliminary Determination in the
Countervailing Duty Investigation, 74 FR 28220 (June 15, 2009).
We received responses to our questionnaire from the GOC, Changbao,
TPCO, Wuxi, and Jianli on July 20, 2009. See the GOC's Original
Questionnaire Response (July 20, 2009) (``GQR''), Changbao's Original
Questionnaire Response (July 20, 2009) (``CQR''), TPCO's Original
Questionnaire Response (July 20, 2009) (``TQR''), Wuxi's Original
Questionnaire Response (July 20, 2009) (``WQR''), and Jianli's Original
Questionnaire Response (July 20, 2009) (``JQR''). On August 26, 2009,
TPCO provided a response on behalf of TPCO Charging Development Co.,
Ltd. (``TCQR''). On September 1, 2009, TPCO provided a response on
behalf of Tianjin Pipe Investment Holding Co., Ltd. (``TPCO Holding
QR'').
We sent supplemental questionnaires to Changbao, TPCO, Wuxi, and
Jianli on August 7, 2009 and to the GOC on July 27, 2009, August 11,
2009 and August 28, 2009. We received responses to these supplemental
questionnaires as follows: Changbao's First Supplemental Response on
August 21, 2009; Jianli's First Supplemental Response on August 21,
2009; TPCO's First Supplemental Response, part 1 on August 21, 2009,
and part 2 on August 26, 2009; Wuxi's First Supplemental response
(``W1SR'') on August 24, 2009; the GOC's Cross-Owned Affiliates
Supplemental on August 3, 2009; GOC's First Supplemental Response
(``G1SR'') on August 26, 2009; and GOC's Second Supplemental Response
(``G2SR'') on September 1, 2009.
On July 23, 2009, Maverick Tube Corporation requested that the
Department extend the deadline for the submission of new subsidy
allegations beyond the July 30, 2009 deadline established by the
Department's regulations. On July 24, 2009, we declined to extend the
deadline. On July 30, 2009, the petitioners submitted additional new
subsidy allegations to the Department.\2\ Jianli and the GOC
[[Page 47211]]
filed comments on the new subsidy allegations on August 3 and 5, 2009,
respectively. The Department is currently reviewing these new subsidy
allegations.
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\2\ The petitioners, collectively, alleged that the GOC confers
a subsidy on OCTG through its export restrictions on steel rounds.
Maverick Tube Corporation made allegations regarding subsidies to
respondent Jianli. United States Steel Corporation made allegations
regarding subsidies to respondents TPCO and Wuxi. TMK IPSCO, V&M
Star L.P., Wheatland Tube, Evraz Rocky Mountain Steel and the United
Steelworkers made allegations regarding subsidies to respondent
Changbao.
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On July 29, 2009, the petitioners submitted comments on the
questionnaire responses filed by the GOC and the respondents.\3\ The
petitioners provided comments on August 25, 26, 28 and 31, regarding
certain issues for the preliminary determination.\4\ Jianli provided
comments on September 1, 2009. The GOC provided comments on August 31,
2009, and September 4, 2009.
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\3\ Maverick Tube Corporation submitted comments on the JQR and
GQR. United States Steel Corporation submitted comments on the TQR
and WQR. TMK IPSCO, V&M Star L.P., Wheatland Tube, Evraz Rocky
Mountain Steel and the United Steelworkers submitted comments on the
CQR.
\4\ Maverick Tube Corporation, TMK IPSCO, V&M Star L.P.,
Wheatland Tube, Evraz Rocky Mountain Steel and the United
Steelworkers submitted comments relations related to the GOC.
Maverick Tube Corporation submitted comments on issues relating to
Jianli and the GOC. United States Steel Corporation submitted
comments on the provision of steel rounds and coke, TPCO, and Wuxi.
TMK IPSCO, V&M Star L.P., Wheatland Tube, Evraz Rocky Mountain Steel
and the United Steelworkers submitted comments on Changbao.
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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, 74 FR at 20678. We did not receive
comments concerning the scope of the antidumping duty (``AD'') and CVD
investigations of OCTG from the PRC.
Scope of the Investigation
The scope of this investigation consists of OCTG, which are hollow
steel products of circular cross-section, including oil well casing and
tubing, of iron (other than cast iron) or steel (both carbon and
alloy), whether seamless or welded, regardless of end finish (e.g.,
whether or not plain end, threaded, or threaded and coupled) whether or
not conforming to American Petroleum Institute (``API'') or non-API
specifications, whether finished (including limited service OCTG
products) or unfinished (including green tubes and limited service OCTG
products), whether or not thread protectors are attached. The scope of
the investigation also covers OCTG coupling stock. Excluded from the
scope of the investigation are: casing or tubing containing 10.5
percent or more by weight of chromium; drill pipe; unattached
couplings; and unattached thread protectors.
The merchandise subject to this investigation is currently
classified in the Harmonized Tariff Schedule of the United States
(``HTSUS'') under item numbers: 7304.29.10.10, 7304.29.10.20,
7304.29.10.30, 7304.29.10.40, 7304.29.10.50, 7304.29.10.60,
7304.29.10.80, 7304.29.20.10, 7304.29.20.20, 7304.29.20.30,
7304.29.20.40, 7304.29.20.50, 7304.29.20.60, 7304.29.20.80,
7304.29.31.10, 7304.29.31.20, 7304.29.31.30, 7304.29.31.40,
7304.29.31.50, 7304.29.31.60, 7304.29.31.80, 7304.29.41.10,
7304.29.41.20, 7304.29.41.30, 7304.29.41.40, 7304.29.41.50,
7304.29.41.60, 7304.29.41.80, 7304.29.50.15, 7304.29.50.30,
7304.29.50.45, 7304.29.50.60, 7304.29.50.75, 7304.29.61.15,
7304.29.61.30, 7304.29.61.45, 7304.29.61.60, 7304.29.61.75,
7305.20.20.00, 7305.20.40.00, 7305.20.60.00, 7305.20.80.00,
7306.29.10.30, 7306.29.10.90, 7306.29.20.00, 7306.29.31.00,
7306.29.41.00, 7306.29.60.10, 7306.29.60.50, 7306.29.81.10, and
7306.29.81.50.
The OCTG coupling stock covered by the investigation may also enter
under the following HTSUS item numbers: 7304.39.00.24, 7304.39.00.28,
7304.39.00.32, 7304.39.00.36, 7304.39.00.40, 7304.39.00.44,
7304.39.00.48, 7304.39.00.52, 7304.39.00.56, 7304.39.00.62,
7304.39.00.68, 7304.39.00.72, 7304.39.00.76, 7304.39.00.80,
7304.59.60.00, 7304.59.80.15, 7304.59.80.20, 7304.59.80.25,
7304.59.80.30, 7304.59.80.35, 7304.59.80.40, 7304.59.80.45,
7304.59.80.50, 7304.59.80.55, 7304.59.80.60, 7304.59.80.65,
7304.59.80.70, and 7304.59.80.80.
The HTSUS subheadings are provided for convenience and customs
purposes only, the written description of the scope of this
investigation is dispositive.
Period of Investigation
The period for which we are measuring subsidies, i.e., the period
of investigation (``POI''), is January 1, 2008, through December 31,
2008.
Critical Circumstances
In their April 8, 2009, petition, the petitioners requested that
the Department make an expedited finding that critical circumstances
exist with respect to imports of OCTG from the PRC. Section 703(e)(1)
of the Act states that if the petitioner alleges critical
circumstances, the Department will determine, on the basis of
information available to it at the time, if there is a reason to
believe or suspect the alleged countervailable subsidy is inconsistent
with the WTO Agreement on Subsidies and Countervailing Measures and
whether there have been massive imports of the subject merchandise over
a relatively short period.
In accordance with 19 CFR 351.206(c)(2)(i), because the petitioners
submitted a critical circumstances allegation more than 20 days before
the scheduled date of the preliminary determination, the Department
must issue a preliminary critical circumstances determination not later
than the date of the preliminary determination. See, e.g., Change in
Policy Regarding Timing of Issuance of Critical Circumstances
Determinations, 63 FR 55364 (October 15, 1998). However, due to
resource constraints and the complex issues involved in this case, we
were unable to accommodate the petitioners' request that the Department
make our determination on an expedited basis.
In determining whether there are ``massive imports'' over a
``relatively short period,'' pursuant to section 703(e)(1)(B) of the
Act, the Department normally compares the import volume of the subject
merchandise for three months immediately preceding the filing of the
petition (i.e., the base period) with the three months following the
filing of the petition (i.e., the comparison period). See 19 CFR
351.206(i). However, this regulation further provides that ``if the
Secretary finds that importers, or exporters or producers, had reason
to believe, at some time prior to the beginning of the proceeding that
a proceeding was likely, then the Secretary may consider a period of
not less than three months from that earlier time.'' In their critical
circumstances allegation, the petitioners allege that exporters and
producers had reason to believe a proceeding covering OCTG from the PRC
would likely be instituted as of July 2008. Consequently, the
petitioners request that the Department use January through July 2008
as the base period and July through December 2008 as the comparison
period.
In this allegation, the petitioners assert that producers and
exporters had reason to believe a proceeding was likely well in advance
to the ultimate filing of the petition based on the
[[Page 47212]]
following events: An October 2007 conference presentation alluding to a
possible ``trade case;'' \5\ the Department's November 2007 CVD
determinations covering carbon quality steel pipe and light-walled
rectangular pipe and tube; Canada's March 2008 imposition of AD and CVD
on ``seamless carbon or alloy steel oil and gas well casings;'' \6\ a
March 2008 statement from a PRC distributor of OCTG that ``only the
issuing of anti-dumping duties will be able to cut imports from
China;'' the Department's initiation of AD and CVD proceedings on
certain circular welded carbon quality steel line pipe from the
Republic of Korea and the PRC; the May and June affirmative findings by
the ITC and the Department regarding the above-mentioned pipe cases; a
June 2008 Associated Press article which states that the other pipe
rulings ``could be the first of a wave of victories by U.S. companies
battling Chinese imports;'' and, in July 2008, the European Union
(``EU'') initiated AD investigations of seamless tubular products from
the PRC. See Volume IV of the Petition (``Critical Circumstances
Allegation'') at 3-7 and Exhibits IV-1 through IV-7. The petitioners
allege that these events culminated in the July 21, 2008, warning by
Hou Yin of China Iron & Steel Association that ``the U.S. may start an
anti-dumping investigation on Chinese seamless pipes soon.'' See
Critical Circumstances Allegation at 6-7 and Exhibit IV-8.
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\5\ See Volume IV of the petition at 4 and page 15 of Exhibit V,
which states, in relevant part: ``Those who believe that OCTG prices
could spike also argue that a trade case could soon be filed against
Chinese OCTG producers. But that case may be hard to argue with
imports in general declining and mills reporting strong profits.''
\6\ We note that although the petitioners characterize this
Canadian proceeding as one covering OCTG, Canada did not initiate
proceedings against OCTG until August 24, 2009. See http://www.cbsa-asfc.gc.ca/sima-lmsi/i-e/ad1385/ad1385-i09-ni-eng.html
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Although the Department has found producers and exporters had
reason to believe that a proceeding was likely prior to a petition
being filed in prior cases,\7\ the evidence put forth by the
petitioners in this case does not indicate that producers and exporters
here had reason to believe that a proceeding was likely as of July
2008. The petitioners point to a litany of events dating back to
October 2007 to indicate that the industry was on notice of a potential
case. However, the bulk of those events occurred in what the
petitioners would have the Department use as the ``base period''--the
period where we are to assume the industry did not have reason to
believe a proceeding was likely. The petitioners point primarily to a
reported statement by a representative of the China Iron & Steel
Association that ``the U.S. may start an anti-dumping investigation on
Chinese seamless pipes soon, following the EU.'' This statement, taken
in the context of the other events cited by the petitioners, is not
enough to demonstrate that producers, exporters, and importers of OCTG
from the PRC had, or should have had, reason to believe the filing of a
petition was likely as of July 2008. The events cited by the
petitioners, unlike the events the Department has relied on in similar
cases, are very speculative. Therefore, we find that the petitioners
have not demonstrated that importers, exporters, or producers, had
reason to believe, at some time prior to the beginning of the
proceeding that a proceeding covering OCTG from the PRC was likely.
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\7\ See, e.g., Notice of Final Antidumping Duty Determination of
Sales at Less Than Fair Value and Affirmative Critical
Circumstances: Certain Frozen Fish Fillets from the Socialist
Republic of Vietnam, 68 FR 37116 (June 23, 2003), and accompanying
Issues and Decision Memorandum at Comment 7 (finding reason to
believe a case was likely based upon widely disseminated newspaper
articles stating: ``America's catfish industry, stung by dropping
prices triggered by a flood of cheaper fish from Vietnam, is gearing
up for a possible antidumping campaign'' and ``Vietnamese seafood
exporters are entering a new war on the U.S. market, as American
rivals are lobbying on an anti-dumping taxation''); and Notice of
Final Determination of Sales at Less Than Fair Value: Carbon and
Certain Alloy Steel Wire Rod From Germany, 67 FR 55802 (August 30,
2002) and accompanying Issues and Decision Memorandum at Comment 6
(finding reason to believe a case was likely based upon trade
publication which ``alerted steel wire rod importers, exporters, and
producers the proceedings concerning the subject merchandise were
likely in a number of countries'').
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Consequently, in accordance with 19 CFR 351.206(i), we are using
the three months preceding the filing of the petition as the base
period (i.e., January to March 2009) and the three months following the
filing of the petition as the comparison period (i.e., April to June
2009). The data provided by the respondents and the data for shipments
by other exporters from the ITC's Dataweb (adjusted to remove shipments
made by the four respondents participating in this investigation) show
there were no massive increases in shipments, as required by 19 CFR
351.206(h). For further discussion, see the Memorandum to the File Re
``Critical Circumstances Analysis'' (September 8, 2009), on file in the
Department's CRU. Notwithstanding whether any respondents received any
subsidies inconsistent with the WTO Agreement on Subsidies and
Countervailing Measures, because we find that there was no massive
increase in shipments from the base period to the comparison period, we
preliminarily find that critical circumstances do not exist with regard
to OCTG from the PRC.
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''), and the accompanying Issues and Decision
Memorandum (``CFS Decision Memorandum''). In CFS from the PRC, the
Department found that:
given the substantial differences between the Soviet-style economies
and China'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.
See CFS Decision Memorandum, at Comment 6. The Department has affirmed
its decision to apply the CVD law to the PRC in subsequent final
determinations. See, e.g., Circular Welded Carbon Quality Steel Pipe
from the People's Republic of China: Final Affirmative Countervailing
Duty Determination and Final Affirmative Determination of Critical
Circumstances, 73 FR 31966 (June 5, 2008), and accompanying Issues and
Decision Memorandum (``CWP Decision Memorandum''), at Comment 1.
Additionally, for the reasons stated in the CWP Decision
Memorandum, we are using the date of December 11, 2001, the date on
which the PRC became a member of the World Trade Organization, as the
date from which the Department will identify and measure subsidies in
the PRC. See CWP Decision Memorandum, at Comment 2.
Use of Facts Otherwise Available and Adverse Inferences
Sections 776(a)(1) and (2) of 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.
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
[[Page 47213]]
the best of its ability to comply with a request for information.
GOC
The Department is investigating the alleged provision of steel
rounds for less than adequate remuneration by the GOC and we requested
information from the GOC about the PRC's steel rounds industry in
general, and about the specific companies that produced the steel
rounds purchased by the mandatory respondents. In both respects, the
GOC has failed to provide the requested information within the
established deadlines.
Regarding the PRC's steel rounds industry in general, the GOC
responded in its July 20, 2009, initial questionnaire response that the
term ``steel rounds'' was not clearly defined, but that it understood
the term to refer to steel billets in a round shape that can be used to
produce OCTG. Based on that definition, the GOC went on to state that
there are no official statistics readily available regarding the
production and consumption of this product in the PRC and that the GOC
was working to gather the requested information. In its August 26,
2009, supplemental questionnaire response, the GOC reported that it had
not identified any additional information regarding the steel rounds
industry in large part because steel rounds are an input product and
the National Statistics Bureau does not maintain data on inputs. On
August 28, 2009, the Department sent a second supplemental
questionnaire on this issue, asking the GOC to provide the production
and consumption generally of the broader category of products, ``steel
billets.'' The GOC responded on September 1, 2009, that the data
requested by the Department are not available because the National
Statistics Bureau also does not keep data on this product.
Regarding the second aspect of our investigation of this alleged
subsidy, the specific companies that produced the steel rounds
purchased by the mandatory respondents, the Department asked the GOC to
provide particular ownership information for these producers so that we
could determine whether the producers are ``authorities'' within the
meaning of section 771(5)(B) of the Act. Specifically, we stated in our
questionnaire that the Department normally treats producers that are
majority owned by the government or a government entity as
``authorities.'' Thus, for any steel rounds producers that were
majority government-owned, the GOC only needed to provide the
additional ownership information described below if it wished to argue
that those producers were not ``authorities.'' For each of the steel
rounds producers that were not majority-owned by the government, the
Department requested the following information: translations of the
2007 and 2008 annual reports (if the 2008 report was not yet available,
the 2006 and 2007 annual reports); translation of the most recent
capital verification report; translation of the most recent articles of
association; the names of the ten largest shareholders and the total
number of shareholders, indicating any affiliations between these
shareholders and the government; the total level (percentage) of
government ownership of the company's shares, the names of all
government entities that own shares in the company, and the amount of
shares held by each; a statement of whether any of the shares held by
government entities have any special rights, priorities, or privileges,
e.g., with regard to voting rights or other management or decision-
making for the company, or whether there are any restrictions on
conducting, or acting through, extraordinary meetings of shareholders,
or whether there any restrictions on the shares held by private
shareholders; a description of the nature of the private shareholders'
interest in the company, e.g., operational, strategic, or investment-
related, etc.; whether any members of the board of directors, or other
senior company officials, were appointed by the government or by the
government entities that hold shares in the company; whether any
directors on the company's board of directors are government officials
or otherwise affiliated with a government agency or other government-
owned companies; the extent to which the company has pursued government
industrial policies or interests; the extent to which operational or
strategic decisions that are made by the management or board of
directors subject to government review or approval; whether the company
was created pursuant to specific Chinese statutes; other means through
which the government exercises influence over this company; and, if the
company has a foreign strategic investor(s), the role of this
shareholder and the rights of this shareholder with respect to the
number of board members it may nominate and select, and whether the
foreign investor nominated the president or CEO of the company.
In its initial questionnaire response, the GOC provided a partial
response addressing the creation of steel rounds producers by statute
and stating that it does not exercise influence over the steel rounds
producers in which it has an ownership interest. In its supplemental
questionnaire responses, the GOC provided a list of the companies that
produced the steel rounds purchased by the mandatory respondents and
classified each according to one of three ownership types: SOE (have 50
percent or more government ownership); privately held, or FIE (foreign
invested enterprise). None of the requested documentation was provided
for any of these producers. Instead, the GOC stated that ``the data
gathered and supplied by the GOC and the respondents already in this
investigation should accomplish the Department's purpose.''
On August 28, 2009, the petitioners submitted comments that
included information indicating that numerous steel rounds producers
designated by the GOC as being privately held or as foreign invested
enterprises (``FIEs'') are, in fact, majority-government owned. Thus,
the GOC not only failed to provide the requested documentation
regarding the ownership of the steel rounds producers, but record
information indicates that the GOC's designation of certain producers
was incorrect. On this basis, we preliminarily determine that the GOC
has not acted to the best of its ability to provide the information
needed for this investigation and, hence, has failed to cooperate.
Consequently, an adverse inference is warranted in the application of
facts available. As adverse facts available (``AFA''), we are treating
all but one of the producers of steel rounds supplied to the mandatory
respondents as authorities. The one exception is Tuoketuo County
Mengfeng Special Steel Company, Ltd. (``Mengfeng''), which was owned by
respondent, Wuxi, at the time Mengfeng began producing billets in 2008.
As explained below under ``Subsidies Valuation Information--Attribution
of Subsidies'' subsidies to this supplier are being attributed to OCTG
produced and sold by Wuxi. Record evidence makes clear that Mengfeng
was majority owned and controlled by Wuxi, a privately owned company.
As noted above, the GOC also failed to provide requested
information about the production and consumption of steel rounds or
billets generally. In light of this, we preliminarily determine that
the GOC has not acted to the best of its ability to provide the
information needed for this investigation and, hence, has failed to
cooperate. Consequently, an adverse inference is warranted in the
application of facts available. As AFA, we are assuming that the GOC's
dominance of the market in the PRC for
[[Page 47214]]
this input results in significant distortion of the prices and, hence,
that use of an external benchmark is warranted.
The Department's practice when selecting an adverse rate from among
the possible sources of information is to ensure that the result is
sufficiently adverse ``as to effectuate the statutory purposes of the
adverse facts available rule 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 Statement of
Administrative Action (``SAA'') accompanying the Uruguay Round
Agreements Act, H. Doc. No. 316, 103d Cong., 2d Session (1994), at 870.
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 ``information
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 e.g., SAA, at 870. The Department considers
information to be corroborated if it has probative value. See id. 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 selected facts available are the best alternative
information. See SAA, at 869.
To corroborate the Department's treatment of the companies that
produced the steel rounds and billets purchased by the mandatory
respondents as authorities and our finding that the GOC dominates the
domestic market for this input, we are relying on Circular Welded
Carbon Quality Steel Line Pipe from the People's Republic of China:
Final Affirmative Countervailing Duty Determination, 73 FR 70961
(November 24, 2008) (``Line Pipe from the PRC''). In that case, the
Department determined that the GOC owned or controlled the entire hot-
rolled steel industry in the PRC. See Line Pipe from the PRC and
accompanying Issues and Decision Memorandum at Comment 1. Evidence on
the record of this investigation shows that many steel producers in the
PRC are integrated, producing both long products (rounds and billets)
and flat products (hot-rolled steel). (See Memorandum to the File,
``Additional Information on Steel Rounds,'' dated September 8, 2009).
Consequently, government ownership in the hot-rolled steel industry is
a reasonable proxy for government ownership in the steel rounds and
billets industry.
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. See U.S. Internal Revenue Service Publication 946 (2008), How
to Depreciate Property, at Table B-2: Table of Class Lives and Recovery
Periods. 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)-(v) 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.
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. 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, 600-604 (CIT 2001).
Changbao
Changbao responded on behalf of itself and one affiliate, Jiangsu
Changbao Precision Steel Tube Co., Ltd. (``Precision''), a producer of
subject merchandise. The nature of the affiliation is proprietary, but
based on 19 CFR 351.525(b)(vi), we preliminarily determine that these
companies are ``cross-owned.'' See CQR at 3. Therefore, pursuant to 19
CFR 351.525(b)(6)(ii), we are attributing the subsidies received by
either Changbao and/or Precision to the combined sales of both
companies.
Changbao identified several other affiliated companies, but
reported that these affiliates do not produce the subject merchandise
or provide inputs. Id. Therefore, because these companies do not
produce subject merchandise or otherwise fall within the situations
described in 19 CFR 351.525(b)(6)(iii)-(v), we do not reach the issue
of whether these companies and Changbao are cross-owned within the
meaning of 19 CFR 351.525(b)(6)(vi) and we are not including these
companies in our subsidy calculations.
Jianli
Jianli responded on behalf of itself and three affiliates: Zhejiang
Jianli Steel Tube Co., Ltd, (``Jianli Steel Tube''), Zhuji Jiansheng
Machinery Co., Ltd. (formerly Zhejiang Jianli OCTG Seamless Pipe Co.,
Ltd.) (``Jiansheng''), and Zhejiang Jianli Industry Group Co., Ltd.
(``Jianli Industry'') (collectively, the ``Jianli Group''). These
companies are cross-owned within the meaning of 19 CFR
351.525(b)(6)(vi) by virtue of high levels of common ownership. Jianli
reported that Jianli Steel Tube produced OCTG for sale to Jianli and
Jiansheng for further processing. See JQR at 6. Jianli also reported
that Jiansheng purchased OCTG from Jianli and Jianli Steel Tube for
further processing and to sell both domestically and in the export
market. Id. Therefore, pursuant to 19 CFR 351.525(b)(6)(ii), we are
attributing the subsidies received by Jianli, Jianli Steel Tube, or
Jiansheng to the combined sales of these companies, excluding the sales
between them.
Regarding Jianli Industry, Jianli reported that this company is the
holding company for the Jianli Group. See JQR at 4. Therefore, pursuant
to 19 CFR 351.525(b)(6)(iii), we are attributing the subsidies received
by Jianli Industry to the combined sales of the Jianli
[[Page 47215]]
Group, excluding sales between the group companies.
In its questionnaire response, Jianli also acknowledged that it has
several other affiliated parties in addition to the three companies
named above. See JQR at 5. However, Jianli reported that these
affiliates do not produce the subject merchandise and do not provide
inputs to Jianli. Therefore, because these companies do not produce
subject merchandise or otherwise fall within the situations outlined in
19 CFR 351.525(b)(6)(iii)-(v), we do not reach the issue of whether
these companies and Jianli are cross-owned within the meaning of 19 CFR
351.525(b)(6)(vi) and we are not including these companies in our
subsidy calculations.
TPCO
As of this preliminary determination, TPCO has responded to the
Department's original and supplemental questionnaires on behalf of
itself; Tianjin Pipe Iron Manufacturing Co., Ltd. (``TPCO Iron'');
Tianguan Yuantong Pipe Product Co., Ltd. (``Yuantong''); Tianjin Pipe
International Economic and Trading Co., Ltd. (``IETC''); and TPCO
Charging Development Co., Ltd. (``Charging''). These companies are
cross-owned within the meaning 19 CFR 351.525(b)(6)(vi) because of
TPCO's substantial ownership position in each of them.
TPCO stated that TPCO Iron provides ``molten and direct reduced
iron'' to TPCO and that Yuantong provides ``threading and other
finishing processes to TPCO Group's OCTG production.'' \8\ Because TPCO
Iron produced an input to TPCO's production of subject merchandise
during the POI, we are preliminarily attributing subsidies received by
TPCO Iron to TPCO, in accordance with 19 CFR 351.525(b)(6)(iv).
Yuantong had direct involvement in the production of subject
merchandise during the POI. Thus, we are preliminarily attributing
subsidies received by Yuantong to TPCO, in accordance with 19 CFR
351.525(b)(6)(ii).
---------------------------------------------------------------------------
\8\ See TQR at 5.
---------------------------------------------------------------------------
Regarding IETC, TPCO stated, ``{IETC{time} is the trading company
through which TPCO Group exports all subject merchandise.'' Because
IETC exported subject merchandise during the POI, we are preliminarily
cumulating the benefit from subsidies received by IETC with subsidies
provided to TPCO, in accordance with 19 CFR 351.525(c).
With regard to Charging, TPCO stated that Charging acts as a
trading company and does not produce any merchandise.\9\ Instead,
Charging purchased and provided steel rounds to TPCO during the POI.
Because Charging is not an input producer, we are not treating Charging
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 steel rounds for less than adequate
remuneration as having been transferred to TPCO through Charging's
transfer of the steel rounds to TPCO, consistent with 19 CFR
351.525(b)(6)(v).
---------------------------------------------------------------------------
\9\ See TCQR at 4 and 5.
---------------------------------------------------------------------------
During the period December 11, 2003, through September 8, 2004,
TPCO Holding held a majority interest in TPCO. Under 19 CFR
351.525(b)(6)(iii), we would normally attribute subsidies received by
TPCO Holding during the period December 11, 2003, through September 8,
2004, to TPCO. TPCO Holding's questionnaire response dated September 1,
2009, however, indicated that TPCO Holding received no non-recurring
subsidies during the period December 11, 2003, through September 8,
2004.
TPCO reported that it intended to provide a response on behalf of
Tianjin TEDA Investment Holding Co., Ltd. (``TEDA''). TPCO explained
that TEDA maintains a majority equity stake in TPCO. As of this
preliminary determination, TPCO has not provided a questionnaire
response.
In a supplemental questionnaire dated August 7, 2009, we asked TPCO
questions about certain affiliates that may have met the cross-
ownership standard under 19 CFR 351.525(b)(6)(vi) and one or more of
the attribution standards under 19 CFR 351.525(b)(6)(ii-v). TPCO
provided responses to these questions in its August 21, 2009, response
at 1-15. Based on TPCO's responses, we preliminarily determine that
none of these affiliates met both the cross-ownership standard of 19
CFR 351.525(b)(6)(vi) and one or more of the attribution standards
under 19 CFR 351.525(b)(6)(ii-v). Thus, we have not included any
subsidies to these companies in the subsidy calculation.
For other affiliated companies that TPCO identified in Exhibits 1
and 2 of the TQR, TPCO either held a small ownership share during the
POI or identified the companies as having no involvement with subject
merchandise. Thus, we have not included any subsidies to these
companies in the subsidy calculation.
In their August 28, 2009 submission, the petitioners requested that
the Department use the unconsolidated sales value of TPCO and its
cross-owned affiliates (net of intercompany sales) to calculate the
subsidy rate for each program. Under 19 CFR 351.525(b)(6)(iii), the
Department will attribute subsidies bestowed on a parent or holding
company to the consolidated sales of the parent or holding company and
its subsidiaries. TPCO was a parent company to other companies during
the POI. On page 13 of the TQR, TPCO stated, ``TPCO Group consolidates
those entities it holds more than 50% equity shares and also those
indirectly owned subsidiaries it owns more than 50% equity shares.'' In
accordance with 19 CFR 351.525(b)(6)(iii), we are preliminarily
attributing subsidies to TPCO to the consolidated sales of TPCO and its
subsidiaries.
Therefore, based on information currently on the record, we
preliminarily determine that cross-ownership within the meaning of 19
CFR 351.525(b)(6)(vi) exists between TPCO, TPCO Iron, Yuantong, IETC,
and Charging. We are preliminarily attributing subsidies received by
TPCO to the consolidated sales of TPCO and its subsidiaries. See 19 CFR
351.525(b)(6)(iii). TPCO Iron, Yuantong, and Charging are consolidated
into TPCO's sales; thus, we are preliminarily attributing subsidies
received by TPCO Iron, Yuantong, and Charging to TPCO's consolidated
sales (excluding sales between TPCO and these three affiliates). For
IETC, we preliminarily have cumulated IETC's subsidy benefits with
TPCO's subsidy benefits. See 19 CFR 351.525(c).
Wuxi
Wuxi identified numerous companies with which it is affiliated and
responded on behalf of itself, a ``productive'' FIE and a producer of
subject merchandise, as well as affiliates Jiangsu Fanli Steel Pipe
Co., Ltd. (``Fanli''), a producer of subject merchandise, and Tuoketuo
County Mengfeng Special Steel Co., Ltd. (``Mengfeng''), an affiliated
input supplier. Based on Wuxi's high level of ownership in Fanli and
Mengfeng, we preliminarily determine that Wuxi is cross-owned with
Fanli and Mengfeng within the meaning of 19 CFR 351.525(b)(6)(vi).
Fanli is a producer of subject merchandise and provided ``green pipe''
to Wuxi during the POI. See WQR, at 2. Thus, we are preliminarily
attributing subsidies received by Wuxi and Fanli to their combined
sales, excluding the sales between them, in accordance with 19
[[Page 47216]]
CFR 351.525(b)(6)(ii). Wuxi's affiliate Mengfeng produces steel billets
and provided a small amount to Wuxi during the POI. See WQR, at 2 and
3. Record evidence supports that billets are dedicated to Wuxi's
production of the downstream product, OCTG. Therefore, for purposes of
this preliminary determination, subsidies received by Mengfeng would be
attributed to Wuxi in accordance with 19 CFR 351.525(b)(6)(iv).
However, for this preliminary determination, we are finding no
subsidies to Mengfeng.
In a supplemental questionnaire dated August 7, 2009, we asked Wuxi
about certain other affiliates. Wuxi provided responses to these
questions in its supplemental questionnaire response. See W1SR, at 1-7.
With respect to Wuxi's affiliate, Wuxi Longhua Steel Pipe Co., Ltd.
(``Wuxi Longhua''), which had been involved in the sales and processing
of oil pipes prior to the POI, Wuxi did not provide a questionnaire
response. Rather, Wuxi claims the conditions of 19 CFR
351.525(b)(6)(ii) through (v) do not apply to Wuxi Longhua because it
did not produce subject merchandise, is not a holding company or a
parent company of Wuxi and has not received a subsidy and transferred
it to Wuxi. Wuxi also reported that while Wuxi Longhua had previously
resold inputs to Wuxi, it did not produce or resell inputs to Wuxi
during the POI. See W1SR, at 2 and 3. We received Wuxi's supplemental
response shortly before the deadline for this preliminary determination
and have not been able to fully analyze Wuxi Longhua's relationship
with Wuxi and its involvement in the production of subject merchandise
in accordance with 19 CFR 351.525(b)(6). Consequently, for this
preliminary determination, we are excluding Wuxi Longhua from the
subsidy calculation, but will continue to examine this issue for the
final determination.
Wuxi also corrected certain information in its W1SR with respect to
affiliate Wuxi Huayi Investment Company (``Wuxi Huayi''). See Wuxi's
correction letter, dated August 24, 2009. Details of Wuxi Huayi's
relationship are proprietary and, therefore, are addressed separately.
See Preliminary Determination Calculation Memorandum for Wuxi, dated
September 8, 2009. We received Wuxi's correction letter shortly before
the deadline for this preliminary determination and have not been able
to fully analyze Wuxi Huayi's relationship with Wuxi and its
involvement in the production of subject merchandise in accordance with
19 CFR 351.525(b)(6). Consequently, for this preliminary determination,
we are excluding Wuxi Huayi from the subsidy calculation, but will
continue to examine this issue for the final determination.
After examining additional information from Wuxi's responses, we
find the remaining affiliates do not produce subject merchandise, or
otherwise fall within the situations described in 19 CFR
351.525(b)(6)(iii) to (v). As such, we have preliminarily excluded
these companies from the subsidy calculations.
Benchmarks and Discount Rates
Benchmarks for Short-Term RMB Denominated Loans
Section 771(5)(E)(ii) of the Act explains that the benefit for
loans is the ``difference between the amount the recipient of the loan
pays on the loan and the amount the recipient would pay on a comparable
commercial loan that the recipient could actually obtain on the
market.'' Normally, the Department uses comparable commercial loans
reported by the company for benchmarking purposes.\10\ If the firm did
not have any comparable commercial loans during the period, the
Department's regulations provide that we ``may use a national interest
rate for comparable commercial loans.'' \11\
---------------------------------------------------------------------------
\10\ See 19 CFR 351.505(a)(3)(i).
\11\ See 19 CFR 351.505(a)(3)(ii).
---------------------------------------------------------------------------
As noted above, section 771(5)(E)(ii) of the Act indicates that the
benchmark should be a market-based rate. For the reasons explained in
CFS from the PRC,\12\ loans provided by Chinese banks reflect
significant government intervention in the banking sector and do not
reflect rates that would be found in a functioning market. Because of
this, any loans received by respondents from private Chinese or
foreign-owned banks would be unsuitable for use as benchmarks under 19
CFR 351.505(a)(2)(i). Similarly, we cannot use a national interest rate
for commercial loans as envisaged by 19 CFR 351.505(a)(3)(ii).
Therefore, because of the special difficulties inherent in using a
Chinese benchmark for loans, the Department is selecting an external
market-based benchmark interest rate. The use of an external benchmark
is consistent with the Department's practice. For example, in Softwood
Lumber from Canada, the Department used U.S. timber prices to measure
the benefit for government-provided timber in Canada.\13\
---------------------------------------------------------------------------
\12\ See CFS from the PRC at Comment 10.
\13\ See Notice of Final Affirmative Countervailing Duty
Determination and Final Negative Critical Circumstances
Determination: Certain Softwood Lumber Products From Canada, 67 FR
15545 (April 2, 2002) (``Softwood Lumber from Canada'') and
accompanying Issues and Decision Memorandum at ``Analysis of
Programs, Provincial Stumpage Programs Determined to Confer
Subsidies, Benefit.''
---------------------------------------------------------------------------
We are calculating the external benchmark using the regression-
based methodology first developed in CFS from the PRC \14\ and more
recently updated in LWTP from the PRC.\15\ This benchmark interest rate
is based on the inflation-adjusted interest rates of countries with per
capita GNIs similar to the PRC, and takes into account a key factor
involved in interest rate formation, that of the quality of a country's
institutions, that is not directly tied to the state-imposed
distortions in the banking sector discussed above.
---------------------------------------------------------------------------
\14\ See CFS from the PRC at Comment 10.
\15\ See Lightweight Thermal Paper From the People's Republic of
China: Final Affirmative Countervailing Duty Determination, 73 FR
57323 (October 2, 2008) (``LWTP from the PRC'') and accompanying
Issues and Decision Memorandum (``LWTP Decision Memo'') at 20-25.
---------------------------------------------------------------------------
Following the methodology developed in CFS from the PRC, we first
determined which countries are similar to the PRC in terms of gross
national income (``GNI''), based on the World Bank's classification of
countries as: low income; lower-middle income; upper-middle income; and
high income. The PRC falls in the lower-middle income category, a group
that includes 55 countries as of July 2007. As explained in CFS from
the PRC, this pool of countries captures the broad inverse relationship
between income and interest rates.
Many of these countries reported lending and inflation rates to the
International Monetary Fund and they are included in that agency's
international financial statistics (``IFS''). With the exceptions noted
below, we have used the interest and inflation rates reported in the
IFS for the countries identified as ``low middle income'' by the World
Bank. First, we did not include those economies that the Department
considered to be non-market economies for AD purposes for any part of
the years in question, for example: Armenia, Azerbaijan, Belarus,
Georgia, Moldova, Turkmenistan. Second, the pool necessarily excludes
any country that did not report both lending and inflation rates to IFS
for those years. Third, we removed any country that reported a rate
that was not a lending rate or that based its lending rate on foreign-
currency denominated instruments. For example, Jordan reported a
deposit rate, not a lending rate, and the rates reported by Ecuador and
Timor L'Este are dollar-denominated rates; therefore, the rates for
these three countries have been
[[Page 47217]]
excluded. Finally, for each year the Department calculated an
inflation-adjusted short-term benchmark rate, we have also excluded any
countries with aberrational or negative real interest rates for the
year in question.
The resulting inflation-adjusted benchmark lending rates are
provided in the respondents' preliminary calculation memoranda. See
e.g., Preliminary Determination Calculation Memoranda for, Jiangsu
Changbao Steel Tube Co., Ltd., Tianjin Pipe (Group) Co., Wuxi Seamless
Oil Pipe Co., Ltd., and Zhejiang Jianli Enterprise Co., Ltd. (September
8, 2009). Because these are inflation-adjusted benchmarks, it is
necessary to adjust the respondents' interest payments for inflation.
This was done using the PRC inflation figure as reported in the IFS.
Id.
Benchmarks for Long-Term Loans
The lending rates reported in the IFS represent short- and medium-
term lending, and there are not sufficient publicly available long-term
interest rate data upon which to base a robust benchmark for long-term
loans. To address this problem, the Department has developed an
adjustment to the short- and medium-term rates to convert them to long-
term rates using Bloomberg U.S. corporate BB-rated bond rates. See
Light-Walled Rectangular Pipe and Tube From the People's Republic of
China: Final Affirmative Countervailing Duty Investigation
Determination, 73 FR 35642 (June 24, 2008) and accompanying Issues and
Decision Memorandum (``LWRP Decision Memo'') at 8. In Citric Acid from
the PRC, this methodology was revised by switching from a long-term
mark-up based on the ratio of the rates of BB-rated bonds to applying a
spread which is calculated as the difference between the two-year BB
bond rate and the n-year BB bond rate, where n equals or approximates
the number of years of the term of the loan in question. See Citric
Acid and Certain Citrate Salts From the People's Republic of China:
Final Affirmative Countervailing Duty Determination, 74 FR 16836 (April
13, 2009) (``Citric Acid from the PRC'') and accompanying Issues and
Decision Memorandum (``Citric Acid Decision Memo'') at Comment 14.
Finally, because these long-term rates are net of inflation as noted
above, we adjusted the PRC respondents' payments to remove inflation.
Benchmarks for Foreign Currency-Denominated Loans
For foreign currency-denominated short-term loans, the Department
used as a benchmark the one-year dollar interest rates for the London
Interbank Offering Rate (``LIBOR''), plus the average spread between
LIBOR and the one-year corporate bond rates for companies with a BB
rating. See LWTP Decision Memo at 10. For long-term foreign currency-
denominated loans, the Department added the applicable short-term LIBOR
rate to a spread which is calculated as the difference between the one-
year BB bond rate and the n-year BB bond rate, where n equals or
approximates the number of years of the term of the loan in question.
Discount Rates
Consistent with 19 CFR 351.524(d)(3)(i)(A), we have used, as our
discount rate, the long-term interest rate calculated according to the
methodology described above for the year in which the government agreed
to provide the subsidy.
Analysis of Programs
Based upon our analysis of the petition and the responses to our
questionnaires, we preliminarily determine the following:
I. Programs Preliminarily Determined To Be Countervailable
A. Policy Loans
The Department is examining whether OCTG producers receive
preferential lending through state-owned commercial or policy banks.
According to the allegation, preferential lending to the OCTG industry
is supported by the GOC through the issuance of national and provincial
five-year plans; industrial plans for the steel sector; catalogues of
encouraged industries, and other government laws and regulations. The
GOC has responded that policy guidance documents do not require banks
to provide preferential, discounted, or policy loans to specific
enterprises. Moreover, banking laws in the PRC require commercial banks
to operate independently of the government and in accordance with
commercial norms. Thus, the GOC claims that there is no policy lending
in regard to the OCTG industry as alleged by the petitioners.
Based on our review of the information and responses of the GOC and
mandatory respondents, we preliminarily determine that loans received
by the OCTG industry from state-owned commercial banks (``SOCBs'') were
made pursuant to government directives.
Record evidence demonstrates that the GOC, through its directives,
has highlighted and advocated the development of the OCTG industry. At
the national level, the GOC has placed an emphasis on the development
of high-end, value-added steel products through foreign investment as
well as through technological research, development, and innovation. In
laying out this strategy, the GOC has identified the specific products
it has in mind. For example, an ``objective'' of The 10th Five-Year
Plan for the Metallurgical Industry was to develop key steel types that
were mainly imported; high strength, anticrushing and corrosion
resistant petroleum pipe was among the listed products. Moreover, among
the ``Policy Measures'' set out in the plan for achieving its
objectives was the encouragement of enterprises to cooperate with
foreign enterprises, particularly in the production and development of
high value-added products and high-tech products. See GQR at Exhibit
GOC-A-1.
Similarly, in the Development Policies for the Iron and Steel
Industry (July 2005) at Article 16, the GOC states that it will `` * *
* enhance the R&D, design, and manufacture level in relation to the key
technology, equipment and facilities for the Chinese steel industry.''
To accomplish this, the GOC states it will provide support to key steel
projects relying on domestically produced and newly developed equipment
and facilities, through tax and interest assistance, and scientific
research expenditures. See GQR at Exhibit GOC-A-21. Later in 2005, the
GOC implemented the Decision of the State Council on Promulgating the
``Interim Provisions on Promoting Industrial Structure Adjustment'' for
Implementation (No. 40 (2005)) (``Decision 40'') in order to achieve
the objectives of the Eleventh Five-Year Plan. See Memorandum to File
from David Neubacher, Analyst regarding ``Additional Documents Placed
on the Record'' (September 8, 2009). Decision 40 references the
Directory Catalogue on Readjustment of Industrial Structure
(``Industrial Catalogue''), which outlines the projects which the GOC
deems ``encouraged,'' ``restricted,'' and ``eliminated,'' and describes
how these projects will be considered under government policies. OCTG
was named in the Industrial Catalogue as an ``encouraged project.'' See
Petition at Exhibit III-14. For the ``encouraged'' projects, Decision
40 outlines several support options available to the government,
including financing.
Turning to the provincial and municipal plans, the Department has
described the inter-relatedness of national level plans and directives
with those at the sub-national level. See LWTP Decision Memo at Comment
6.
[[Page 47218]]
Based on our review of the sub-national plans submitted by the GOC in
this investigation, we find that they mirror the national government's
objective of supporting and promoting the production of innovative and
high-value added products, including OCTG. Examples from the five-year
plans of the provinces and/or municipalities where each of the
respondents is located follow:
Outline of the 10th Five-Year Plan for the National Economic and
Social Development of Tianjin City: ``For metallurgical industry, we
attach importance to the development of high quality and efficiency
steel products and high grade metal products, such as seamless steel
tube and cold rolled sheet, and carry out the oil steel pipe
extension and east-movement project of steel.'' See GQR at Exhibit
GOC-A-15.
Outline of the 11th Five-Year Program for the Development of the
Industrial Economy of Tianjin: ``We shall also focus on those steel
tube industries mainly engaged in oil country tubular goods and high
grade furnace tubular goods through careful thorough efforts and
build a new specialized oil country tubular goods production base
placing oil casing first and high added value products such as oil
pipes and drill pipes second.'' See GQR at Exhibit GOC-A-16.
Notice of Tianjin Municipal People's Government Concerning the
Printing and Distribution of the Outline for the 11th Five-Year
Program for the National Economic and Social Development in Tianjin
Binhai New Area: ``4. Constructing deep processing base of petroleum
steel pipe and high quality steel material--We shall quicken
technology innovation and structural adjustment, extend industrial
link, enhance the concentration effort, strive the commanding point
of the industry, consolidate and develop the leading position of
deep processing of petroleum steel pipe and high quality steel
material.'' See G1SR at Exhibit GOC-SUPP-18.
An Outline of Adjustment and Development Plan for Industrial
Structure of Jiangsu Province During the 11th Five-Year Plan:
``Emphasize on the development of high-quality steel products with
high added value and high technological content such as motor
plates, shipbuilding steel plates, * * * pinion steel, oil well
billet, special pipes and sticks, and highly qualified high-carbon
hard wires.'' See G1SR at Exhibit GOC-SUPP-15.
The Outline of the 11th Five-Year Program for the National
Economic and Social Development in Xuyi County: ``Cultivating large-
scale enterprises--Adopting the way of developing large-scale
enterprises and expanding existing enterprises and conglomerates. We
should encourage and assist the enterprises, such as * * * Fanli
Steel Pipes.'' See G1SR at Exhibit GOC-SUPP-9.
Outline of the 11th Five-Year Program for the National Economic
and Social Development of Wuxi: ``New Material Industry. We will
take such industries as metallurgy, chemical industry and so on as
the foundation, prioritize products of several domains such as new
composition material and high polymer * * * special steel and
product, * * * and so on,'' See GQR at Exhibit GOC-A-12.
The Outline of the Tenth Five-Year Plan for the National Economy
and Social Development of Zhejiang Province: ``make great efforts to
improve the industrial level, product grade and the international
competitiveness'' (with regard to the province's goal of adjusting
and optimizing the industrial structure). See GQR at Exhibit GOC-A-
5.
The Outline of the 11th Five-Year Program for the National
Economy and Social Development in Zhejiang Province: ``We will
change the economic growth pattern. We will speed up the pace of
independent innovation, strengthen the supporting role of talented
persons and science and technology in economic growth, insist on
taking an industrialized path, and push forward the strategic
readjustment of economic structure.'' See GQR at Exhibit GOC-A-6.
The 11th Five-Year Plan for National Economic and Social
Development of Zhuji: ``Improving input mechanism and constructing
`modern industrial highland.' We will help enterprises to put
projects into places in accordance with industry guiding directory
of the state, forcefully renovate and upgrade traditional
industries, and specially foster and develop high-tech industries
and more potent new industries.'' See GQR at Exhibit GOC-A-8.
Finally, we examined the loan documentation provided by the GOC and
noted language for certain loans which also reflects the GOC's
directives to support the OCTG industry. As this information is
business proprietary, it is discussed in a separate memorandum. See
Memorandum to the File from David Neubacher regarding ``BPI Loan Memo''
(September 8, 2009).
In addition to its claim that policy guidance documents do not
provide for preferential, discounted, or policy loans to specific
enterprises, the GOC has cited to the Circular on Improving the
Administration of Special Loans (YINFA {1999{time} No. 228)
(``Circular'') and Articles 4 and 7 of the Law of the People's Republic
of China on Commercial Banks (``Banking Law'') to argue that policy
loans are prohibited and that commercial banks in the PRC operate
independently from the government and base their decisions on market
norms. See G1SR at 7. First, we note that the Circular was written
expressly to four specific banks (Agricultural Bank of China,
Industrial Bank of China, Bank of China, and China Construction Bank),
and not to commercial banks in general. Moreover, we note that the
Banking Law, at Article 34, also states that banks shall ``carry out
their loan business upon the needs of the national economy and the
social development and under the guidance of the State industrial
policies.'' See G1SR at GOC-SUPP-19. Thus, the Banking Law, in some
measure, stipulates that lending procedures be based on the guidance of
government industrial policy.
As noted in Citric Acid from the PRC: \16\
\16\ See Citric Acid from the PRC, 74 FR 16836 and Citric Acid
Decision Memo, at Comment 5.
---------------------------------------------------------------------------
In general, the Department looks to whether government plans or
other policy directives lay out objectives or goals for developing
the industry and call for lending to support those objectives or
goals. Where such plans or policy directives exist, then we will
find a policy lending program that is specific to the named industry
(or producers that fall under that industry).\17\ Once that finding
is made, the Department relies upon the analysis undertaken in CFS
from the PRC \18\ to further conclude that national and local
government control over the SOCBs results in the loans being a
financial contribution by the GOC. \19\
\17\ See CFS Decision Memorandum, at 49; and LWTP Decision Memo,
at 98.
\18\ See CFS Decision Memorandum, at Comment 8.
\19\ See OTR Tires from the PRC IDM, at 15; and LWTP Decision
Memo, at 11.
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Therefore, on the basis of the record information described above,
we preliminarily determine that the GOC has a policy in place to
encourage the development of production of OCTG through policy lending.
Therefore, the loans to OCTG producers from Policy Banks and SOCBs in
the PRC constitute a direct financial contribution from the government,
pursuant to section 771(5)(D)(i) of the Act, and they provide a benefit
equal to the difference between what the recipients paid on their loans
and the amount they would have paid on comparable commercial loans (see
section 771(5)(e)(2)). Finally, we determine that the loans are de jure
specific because of the GOC's policy, as illustrated in the government
plans and directives, to encourage and support the growth and
development of the OCTG industry.
To calculate the benefit under the policy lending program, we used
the benchmarks described under ``Subsidies Valuation--Benchmarks and
Discount Rates'' above. See also 19 CFR 351.505(c). On this basis, we
determine that Changbao received a countervailable subsidy of 0.30
percent ad valorem, Jianli received a countervailable subsidy of 0.02
percent ad valorem, TPCO received a countervailable subsidy of 1.59
percent ad valorem, and Wuxi received a countervailable subsidy of 1.35
percent ad valorem under this program.
[[Page 47219]]
B. Export Loans From the Export-Import Bank of China
On page 17 of the GQR, the GOC reported that the Export-Import Bank
of China (``EIBC'') provided TPCO with three loans that were
outstanding during the POI. The GOC claimed that two of the loans
related to non-export business, and that the third loan did not relate
to TPCO's production of OCTG.
Based on the proprietary description of these loans at page 17 of
the GOC's response, however, we preliminarily find that one of the
loans is a countervailable export loan from the EIBC. As a loan from a
government policy bank, this loan constitutes a direct financial
contribution from the government, pursuant to section 771(5)(D)(i) of
the Act. We further determine that the export loan is specific under
section 771(5A)(B) of the Act because receipt of the financing is
contingent upon export. Also, we determine that the export loan confers
a benefit within the meaning of section 771(5)(E)(ii) of the Act.
To calculate the benefit under this program, we compared the amount
of interest paid against the export loan to the amount of interest that
would have been paid on a comparable commercial loan. As our benchmark,
we used the short-term interest rates discussed above in the
``Benchmarks and Discount Rates'' section. To calculate the net
countervailable subsidy rate, we divided the benefit by TPCO's export
sales value for the POI. On this basis, we determine the net
countervailable subsidy rate to be 0.08 percent ad valorem.
C. Provision of Steel Rounds for Less Than Adequate Remuneration
As discussed under ``Use of Facts Otherwise Available and Adverse
Inferences,'' above, we are preliminarily relying on ``adverse facts
available'' for our analysis regarding the GOC's provision of steel
rounds and billets to OCTG producers. First, as a result of the GOC's
failure to provide requested ownership information for the companies
that produced the steel rounds and billets purchased by the mandatory
respondents in this investigation, we are treating all of the steel
rounds and billets, except those supplied by one cross-owned supplier
to Wuxi, as having been provided by an ``authority,'' within the
meaning of section 771(5)(B). Therefore, we preliminarily determine
that the OCTG producers have received a financial contribution in the
form of the provision of a good. See section 771(5)(D)(iii).
To determine whether this financial contribution results in a
subsidy to the OCTG producers, we followed 19 CFR 351.511(a)(2) for
identifying an appropriate market-based benchmark for measuring the
adequacy of the remuneration for the steel rounds and billets. The
potential benchmarks listed in this regulation, in order of preference
are: (1) Market prices from actual transactions within the country
under investigation for the government-provided good (e.g., actual
sales, actual imports, or competitively run government auctions)
(``tier one'' benchmarks); (2) world market prices that would be
available to purchasers in the country under investigation (``tier
two'' benchmarks); or (3) prices consistent with market principles
based on an assessment by the Department of the government-set price
(``tier three'' benchmarks). As we explained in Softwood Lumber from
Canada, the preferred benchmark in the hierarchy is an observed market
price from actual transactions within the country under investigation
because such prices generally would be expected to reflect most closely
the prevailing market conditions of the purchaser under investigation.
See Softwood Lumber from Canada and accompanying Issues and Decision
Memorandum at ``Analysis of Programs, Provincial Stumpage Programs
Determined to Confer Subsidies, Benefit.''
Beginning with tier one, we must determine whether the prices from
actual sales transactions involving Chinese buyers and sellers are
significantly distorted. As explained in the CVD Preamble: ``Where it
is reasonable to conclude that actual transaction prices are
significantly distorted as a result of the government's involvement in
the market, we will resort to the next alternative {tier two{time} in
the hierarchy.'' See Countervailing Duties; Final Rule, 63 FR 65348,
65377 (November 25, 1998) (``CVD Preamble''). The CVD Preamble further
recognizes that distortion can occur when the government provider
constitutes a majority, or in certain circumstances, a substantial
portion of the market.
As explained under ``Use of Facts Otherwise Available and Adverse
Inferences,'' above, we are preliminarily relying on ``adverse facts
available'' to determine that GOC authorities play a significant role
in the PRC market for steel rounds and billets. Because of the dominant
role played by GOC authorities in the production of steel rounds and
billets, we preliminarily determine that the prices actually paid in
the PRC for steel rounds and billets during the POI are not appropriate
tier one benchmarks under our regulations.
Turning to tier two benchmarks, i.e., world market prices available
to purchasers in the PRC, the petitioners have put on the record data
from the Steel Business Briefing (``SBB'') regarding monthly export
prices for billet from Latin America, Turkey, and the Black Sea/Baltic.
See the petitioners' April 20, 2009, submission, ``Response to the
Department Questionnaire Concerning the Imposition of Countervailing
Duties,'' at Exhibit 22, Attachments A-C.
We preliminarily determine that the SBB data should be used to
derive a world market price for steel rounds and billets that would be
available to purchasers in the PRC. We note that the Department has
relied on pricing data from industry publications such as SBB in recent
CVD proceedings involving the PRC. See CWP Decision Memorandum at 11
and LWRP Decision Memo at 9. Also, 19 CFR 351.511(a)(2)(ii), states
that where there is more than one commercially available world market
price, the Department will average the prices to the extent
practicable. Therefore, we first derived a world market SBB price by
averaging the monthly prices for Latin America, Turkey and the Black
Sea/Baltic.
Under 19 CFR 351.511(a)(2)(iv), when measuring the adequacy of
remuneration under tier one or tier two, the Department will adjust the
benchmark price to reflect the price that a firm actually paid or would
pay if it imported the product, including delivery charges and import
duties. Regarding delivery charges, we have included the freight costs
that would be incurred in shipping wire rod from Latin America, Turkey
and the Black Sea/Baltic to the PRC. We have also added import duties,
as reported by the GOC, and the VAT applicable to imports of steel
rounds and billet into the PRC.
Comparing the adjusted benchmark prices to the prices paid by the
respondents for their steel rounds and billet, we preliminarily
determine that steel rounds and billet were provided for less than
adequate remuneration and that a subsidy exists in the amount of the
difference between the benchmark and what the respondents paid. See 19
CFR 351.511(a).
Finally, with respect to specificity, the GOC has stated that steel
rounds are used by the OCTG industry. Therefore, we preliminarily
determine that this subsidy is specific because the recipients are
limited in number. See section 771(5A)(D)(iii)(I) of the Act.
Therefore, we preliminarily determine that the GOC conferred a
countervailable subsidy on Changbao, Jianli, TPCO, and Wuxi through the
[[Page 47220]]
provision of steel rounds for less than adequate remuneration. To
calculate the subsidy, we took the difference between the delivered
world market price and what each respondent paid for steel rounds
during the POI. On this basis, we preliminarily calculated a net
countervailable ad valorem subsidy rate of 24.03 percent for Changbao,
30.45 percent for Jianli, 5.89 percent for TPCO, and 21.45 percent for
Wuxi.
D. The State Key Technology Project Fund
TPCO reported that it received funds from the State Key Technology
Renovation Fund in 2003. In Exhibit V-1 of the GQR, the GOC provided
the notice for implementation of the fund. The notice states that the
purpose of the program is to ``support the technological renovation of
key industries, key enterprises and key products. * * * The notice also
states, ``The enterprises shall be mainly selected from large-sized
state-owned enterprises and large-sized state holding enterprises among
the 512 key enterprises, 120 pilot enterprise groups and the leading
enterprises of the industries.''
The Department has previously found this program to be
countervailable. See Certain New Pneumatic Off-the-Road Tires From the
People's Republic of China: Final Affirmative Countervailing Duty
Determination and Final Negative Determination of Critical
Circumstances, 73 FR 40480 (July 15, 2008) and accompanying Issues and
Decision Memorandum.
We preliminarily determine that TPCO received a countervailable
subsidy under the State Key Technology Renovation Fund. We find that
this grant is a direct transfer of funds within the meaning of section
771(5)(D)(i) of the Act, providing a benefit in the amount of the
grant. See 19 CFR 351.504(a). Further, we preliminarily determine that
the grant provided under this program is limited as a matter of law to
certain enterprises; i.e., large-sized state-owned enterprises and
large-sized state holding enterprises among the 512 key enterprises.
Hence, we preliminarily find that the subsidy is specific under section
771(5A)(D)(i) of the Act.
To calculate the countervailable subsidy, we used our standard
methodology for non-recurring grants. See 19 CFR 351.524(b). Because
the grant exceeded 0.5 percent of TPCO's sales in the year the grant
was approved (i.e., 2003), we have allocated the benefit over the 15-
year AUL using the discount rate described under the ``Benchmarks and
Discount Rates'' section above. We attributed the subsidy amount for
the POI to TPCO's consolidated sales. On this basis, we preliminarily
determine the countervailable subsidy to be 0.01 percent ad valorem for
TPCO.
E. ``Two Free, Three Half'' Program
Under Article 8 of the FIE Tax Law, an FIE that is ``productive''
and is scheduled to operate for more than ten years may be exempted
from income tax in the first two years of profitability and pay income
taxes at half the standard rate for the next three years. See GQR at
Exhibit GOC-FF-3. The Department has previously found this program
countervailable. See, e.g., CFS Decision Memorandum at 11-12 (Analysis
of Programs, I. Programs Determined to be Countervailable for GE, B.
The ``Two-Free/Three Half'' Program) and Citric Acid Decision Memo at
15-16 (Analysis of Programs. I. Programs Determined to be
Countervailable, D. The ``Two-Free, Three Half'' Program).
Jianli Steel Tube and Jiansheng reported using this program during
the POI. See JQR at 30.
We preliminarily determine that the exemption or reduction of the
income tax paid by productive FIEs under this program confers a
countervailable subsidy. The exemption/reduction 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 also
preliminarily determine that the exemption/reduction afforded by this
program is limited as a matter of law to certain enterprises, i.e.,
``productive'' FIEs and, hence, is specific under section 771(5A)(D)(i)
of the Act. See CFS Decision Memorandum, at Comment 14.
To calculate the benefit, we treated the income tax savings enjoyed
by Jianli Steel Tube, and Jiansheng as a recurring benefit, consistent
with 19 CFR 351.524(c)(1). To compute the amount of the tax savings, we
compared the income tax rate the above companies would have paid in the
absence of the program (30 percent) with the income tax rate the
company actually paid (15 or 0 percent). We divided Jianli Steel Tube's
and Jiansheng's tax savings received during the POI by the combined
sales of Jianli, Jinali Steel Tube, and Jiansheng, minus inter-company
sales during the POI. On this basis, we preliminarily determine that
Jianli received a countervailable subsidy of 0.20 percent ad valorem
under this program.
F. Preferential Tax Program for Foreign-Invested Enterprises Recognized
as High or New Technology Enterprises
According to the Circular of the State Council Concerning the
Approval of the National Development Zones for New and High Technology
Industries and the Relevant Policies and Provisions at Article 2 and 4
of Appendix III (``Regulations on the Tax Policy for the National New
and High Technology Industries Parks''), new and high technology
enterprises located in new and high technology parks shall pay a
reduced income tax rate of 15 percent. See GQR at Exhibit GOC-FF-1. The
GOC noted that a similar rule is provided at Article 7.3 of the FIE
Income Tax Law and Article 73(5) of the Implementing Rules of the
Foreign Investment Enterprise and Foreign Enterprise Income Tax Law.
See GQR at 96.
Wuxi reported that it used the program during the POI. See WQR at
26.
We preliminarily determine that the reduction in the income tax
paid by high or new technology FIEs under this program confers a
countervailable subsidy. The exemption/reduction is a financial
contribution in the form of revenue forgone by the government 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 also
preliminarily determine that the reduction afforded by this program is
limited as a matter of law to certain enterprises, i.e., new and high
technology FIEs, and, hence, is specific under section 771(5A)(D)(i) of
the Act. The program is also specific pursuant to 771(5A)(D)(iv) as
only ratified new and high technology enterprises located in new and
high technology parks approved by the State Council can pay the reduced
tax rate.
To calculate the benefit for Wuxi, we treated the income tax
savings enjoyed by the company 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 combined sales of Wuxi and Fanli. To compute the
amount of the tax savings, we compared the rate Wuxi would have paid in
the absence of the program (30 percent) with the rate the company paid
(15 percent). On this basis, we preliminarily determine the
countervailable subsidy attributable to Wuxi to be 1.63 percent ad
valorem under this program.
[[Page 47221]]
G. Local Income Tax Exemption and Reduction Programs for ``Productive''
Foreign-Invested Enterprises
Under Article 9 of the FIE Tax Law, the provincial governments have
the authority to exempt FIEs from the local income tax of three
percent. See GQR at Exhibit GOC-FF-3. According to the Regulations on
Exemption and Reduction of Local Income Tax of FIEs in Jiangsu
Province, a ``productive'' FIE in Jiangsu Province may be exempted from
the three percent local income tax during the ``Two Free, Three Half''
period. Additionally, according to Article 6, FIEs eligible for the
reduced income tax rate of 15 percent can also be exempted from paying
local income tax. See GQR at Exhibit GOC-HH-3. According to the
Provisional Rules on Exemption of Local Income Tax for FIEs and Foreign
Enterprises (Decree 14 of Zhejiang Government, 1991) at Article 4,
productive FIES in Zhejiang Province are exempted from paying the local
income tax for the first two years after their first profitable year,
and pay at a reduced (half) rate for the next three consecutive years.
See G1SR at Exhibit GOC-SUPP-35. The Department has previously found
this program to be countervailable. See, e.g., CFS Decision Memorandum
at 12-13 (Analysis of Programs, I. Programs Determined to be
Countervailable for GE, D. Local Income Tax Exemption and Reduction
Program for ``Productive'' FIEs) and Citric Acid Decision Memo at 21
(Analysis of Programs, I. Programs Determined to be Countervailable, I.
Local Income Tax Exemption and Reduction Program for ``Productive''
FIEs).
Jianli Steel Tube, Jiansheng, and Wuxi reported using this program
during the POI. See JQR at 33 and WQR at 26.
We preliminarily determine that the exemption from or reduction in
the local income tax received by ``productive'' FIEs under this program
confers a countervailable subsidy. The exemption or reduction is a
financial contribution in the form of revenue forgone by the government
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 also preliminarily determine that the exemption or reduction
afforded by this program is limited as a matter of law to certain
enterprises, i.e., ``productive'' FIEs, and, hence, is specific under
section 771(5A)(D)(i) of the Act.
To calculate the benefit for Jianli Steel Tube, Jiansheng, and
Wuxi, we treated the income tax savings enjoyed by the companies as a
recurring benefit, consistent with 19 CFR 351.524(c)(1). To compute the
amount of the tax savings, we compared the local income tax rate that
the companies would have paid in the absence of the program (i.e.,
three percent) with the income tax rate the companies actually paid.
For Jianli Steel Tube and Jiansheng, we divided the companies' tax
savings received during the POI by the combined sales of Jianli, Jinali
Steel Tube, and Jiansheng minus inter-company sales during the POI.
For Wuxi, we divided the company's tax savings received during the
POI by the combined sales of Wuxi and Fanli.
On this basis, we preliminarily determine that Jianli received a
countervailable subsidy of 0.02 percent ad valorem and Wuxi received a
countervailable subsidy of 0.33 percent ad valorem under this program.
H. Income Tax Credits for Domestically Owned Companies Purchasing
Domestically Produced Equipment
According to the Provisional Measures on Enterprise Income Tax
Credit for Investment in Domestically Produced Equipment for Technology
Renovation Projects (CAI SHU ZI {290{time} No. 290), a domestically
invested company may claim tax credits on the purchase of domestic
equipment if the project is compatible with the industrial policies of
the GOC. Specifically, a tax credit up to 40 percent of the purchase
price of the domestic equipment may apply to the incremental increase
in tax liability from the previous year. See G2SR at 12. The Department
has previously found this program countervailable. See, e.g., Circular
Welded Carbon Quality Steel Line Pipe from the People's Republic of
China: Final Affirmative Countervailing Duty Determination, 73 FR
70961, (November 24, 2008) and accompanying Issues and Decision
Memorandum at 25-26 (V. Analysis of Programs, A. Programs Determined to
be Countervailable, 8. Income Tax Credits on Purchases of Domestically-
Produced Equipment by Domestically Owned Companies).
Fanli reported using this program during the POI. See WQR at 15.
We preliminarily determine that income tax credits for the purchase
of domestically produced equipment are countervailable subsidies. The
tax credits are a financial contribution in the form of revenue forgone
by the government and provide a benefit to the recipients 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 preliminarily determine that these tax
credits are contingent upon use of domestic over imported goods and,
hence, are specific under section 771(5A)(C) of the Act.
To calculate the benefit, we treated the income tax savings enjoyed
by Fanli as a recurring benefit, consistent with 19 CFR 351.524(c)(1),
and divided the company's tax savings by the combined total sales of
Wuxi and Fanli, minus inter-company sales, during the POI. On this
basis, we preliminarily determine that a countervailable subsidy of
0.16 percent ad valorem exists for Wuxi under this program.
I. Subsidies Provided in the Tianjin Binhai New Area and the Tianjin
Economic and Technological Development Area
TPCO reported that it used two programs for companies in the
Tianjin Binhai New Area (TBNA): the Science and Technology Fund Program
and the Accelerated Depreciation Program. TPCO received a grant under
the Science and Technology Fund Program and paid reduced income taxes
under the Accelerated Depreciation Program. TPCO also reported that it
purchased land-use rights and rented land-use rights for different
plots of land within the TBNA during the POI and prior to the POI.
Science and Technology Fund
The GOC's measures for the Science and Technology Fund, which the
GOC provided at Exhibit GOC-DD-4 of the GQR, describe the fund's
purpose as follows: (1) Promote the construction of the science-
technology infrastructure in TBNA; (2) enhance science-technology
renovation and service abilities; (3) improve the business environment
of renovation entrepreneurship; and (4) construct a new science-
technology renovation system. On page 84 of the GQR, the GOC stated
that eligibility for the program is limited to enterprises within the
TBNA Administrative Committee's jurisdiction.
We preliminarily determine that TPCO received a countervailable
subsidy during the POI under the TBNA Science and Technology Fund
Program. We find that this grant is a direct transfer of funds within
the meaning of section 771(5)(D)(i) of the Act, providing a benefit in
the amount of the grant. See 19 CFR 351.504(a). We further determine
preliminarily that grants under this program are limited to enterprises
located in a designated geographic region (i.e., the TBNA). Hence, the
grants are specific under section 771(5A)(D)(iv) of the Act.
To calculate the countervailable subsidy, we used our standard
methodology for non-recurring grants. See 19 CFR 351.524(b). Because
the
[[Page 47222]]
benefit was less than 0.5 percent of TPCO's consolidated sales during
the POI, we have preliminarily expensed the entire amount to the POI.
See 19 CFR 351.524(b)(2). On this basis, we preliminarily determine the
countervailable subsidy to be 0.03 percent ad valorem for TPCO.
Accelerated Depreciation Program
Regarding the Accelerated Depreciation program, the GOC circular
for the program (submitted at Exhibit DD-9 of the GOC's July 21, 2009,
response) stipulates that enterprises in the TBNA may shorten the
depreciation period of certain fixed assets by a maximum of 40 percent
of the present depreciation period. On page 91 of the response, the GOC
stated that eligibility for the program is limited to enterprises
within the TBNA.
We preliminarily determine that TPCO received a countervailable
subsidy during the POI under the Accelerated Depreciation program. The
Accelerated Depreciation program constitutes a financial contribution
in the form of revenue forgone within the meaning of section
771(5)(D)(ii) of the Act, with the benefit equaling the income tax
savings (see 19 CFR 351.510(a)). The program affected TPCO's income
taxes for the 2007 tax year. Thus, under the normal standard in 19 CFR
351.509(b), TPCO received a benefit from this program in 2008, when it
filed its 2007 annual tax return. Further, 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 divided the reduction in TPCO's income
taxes resulting from the program by TPCO's consolidated sales, in
accordance with 19 CFR 351.524(c)(1) and 19 CFR 351.525(b)(6)(iii). On
this basis, we preliminarily determine the countervailable subsidy to
be 0.51 percent ad valorem for TPCO.
Land
Regarding land, TPCO and its reporting cross-owned affiliates are
all located in the TBNA, and TPCO, TPCO Iron, and Yuantong have
purchased ``granted'' land-use rights within the TBNA. At page 41 of
the GQR, the GOC reported that TPCO obtained its land-use rights in
accordance with Article 11 of Decree 21 of the Ministry of Land and
Resources. Article 11, at Exhibit P-2 of the GQR, establishes
provisions for the ``agreement-based assignment of the right to use
State-owned land.'' Article 11 States that the ``agreement-based
assignment of the right to use State-owned land'' refers to the land
user's right to use State-owned land for a certain period, and to the
land user's payment of a fee to the state for the land-use right. TPCO
and TPCO Iron purchased their land-use rights from the Dongli District
Land and Resource Administration Bureau, and Yuantong purchased its
land-use rights from the Tianjin Port Bonded Zone Land and Resource
Administration Bureau.
The Department determined in LWS that the provision of land-use
rights constitutes the provision of a good within the meaning of
section 771(5)(D)(iii) of the Act.\20\ The Department also found that
when the land is in an industrial park located within the seller's
(e.g., county's or municipality's) jurisdiction, the provision of the
land-use rights is regionally specific (see section 771(5A)(D)(iv) of
the Act).\21\ In the instant investigation, the TBNA is a designated
area that includes the jurisdictions that provided land-use rights to
TPCO and its cross-owned affiliates during the POI. Therefore,
consistent with LWS, we preliminarily find that TPCO's purchases of
granted land-use rights give rise to countervailable subsidies to the
extent that the purchases conferred a benefit.
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\20\ See Laminated Woven Sacks from the People's Republic of
China: Final Affirmative Countervailing Duty Determination and Final
Affirmative Determination, in Part, of Critical Circumstances, 73 FR
35639 (June 24, 2008) (``LWS''), and accompanying Issues and
Decision Memorandum at Comment 8.
\21\ Id. at Comment 9.
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To determine whether TPCO received a benefit, we have analyzed
potential benchmarks in accordance with 19 CFR 351.511(a). First, we
look to whether there are market-determined prices within the country.
See 19 CFR 351.511(a)(2)(i). In LWS, the Department determined that
``Chinese land prices are distorted by the significant government role
in the market'' and, hence, that tier one benchmarks do not exist.\22\
The Department also found that tier two benchmarks (world market prices
that would be available to purchasers in China) are not
appropriate.\23\ See 19 CFR 351.511(a)(2)(ii). Therefore, the
Department determined the adequacy of remuneration by reference to tier
3 and found that the sale of land-use rights in China was not
consistent with market principles because of the overwhelming presence
of the government in the land-use rights market and the widespread and
documented deviation from the authorized methods of pricing and
allocating land.\24\ See 19 CFR 351.511(a)(2)(iii). There is
insufficient new information on the record of this investigation to
warrant a change from the findings in LWS.
---------------------------------------------------------------------------
\22\ Id. at Comment 10.
\23\ Id. at section IV.A.1, ``Analysis of Programs--Government
Provision of Land for Less Than Adequate Remuneration.''
\24\ Id. at Comment 10.
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For these reasons, we are not able to use Chinese or world market
prices as a benchmark. Therefore, we are preliminarily comparing the
price that TPCO paid for its granted land-use rights with comparable
market-based prices for land purchases in a country at a comparable
level of economic development that is reasonably proximate to, but
outside of, China. Specifically, we are preliminarily comparing the
price TPCO paid to sales of certain industrial land in industrial
estates, parks, and zones in Thailand, consistent with LWS.
To calculate the benefit, we computed the amount that TPCO would
have paid for its granted land-use rights and subtracted the amount
TPCO actually paid for each purchase. For purchases in which the
subsidy amount exceeded 0.5 percent of TPCO's sales in the year of
purchase, we have used the discount rate described under the Benchmarks
and Discount Rates section above to allocate the benefit over the life
of the land-use rights contract. For these purchases, we divided the
amount allocated to the POI by TPCO's consolidated sales during the
POI. For purchases in which the benefit was less than 0.5 percent of
TPCO's consolidated sales in the year of the purchase, we have
preliminarily expensed the entire amount to the year in which TPCO
purchased the land-use rights. See 19 CFR 351.524(b)(2). On this basis,
we preliminarily determine the total countervailable subsidy for all of
TPCO's land-use rights purchases to be 0.11 percent ad valorem during
the POI.
TPCO also reported that it rented certain land parcels within the
TBNA from TPCO Holding during the POI. Specifically, TPCO reported that
it operates on the largest of these three parcels under a lease
agreement that it signed with TPCO Holding in 2005. TPCO also stated
that it will compensate TPCO Holding for the lease of two other parcels
under terms that TPCO and TPCO Holding will memorialize in 2009.
On page 4 of the TPCO Holding QR, TPCO stated that TPCO Holding
``has been continuously wholly-owned by the Tianjin State-owned Assets
Supervision and Administration Commission.'' Thus, we preliminarily
determine that
[[Page 47223]]
TPCO Holding was an authority within the meaning of section 771(5)(B)
of the Act at the time of the lease agreement and throughout the POI.
Moreover, because the leased properties are all within the TBNA, the
subsidy is specific (section 771(5A)(D)(iv) of the Act). Therefore,
consistent with OTR Tires, we preliminarily find that TPCO's lease of
land under the 2005 lease gives rise to a countervailable subsidy to
the extent that the lease conferred a benefit.\25\
---------------------------------------------------------------------------
\25\ See Certain New Pneumatic Off-The-Road Tires from the
People's Republic of China: Final Affirmative Determination of Sales
at Less Than Fair Value and Partial Affirmative Determination of
Critical Circumstances, 73 FR 40485 (July 15, 2008) (``OTR Tires''),
and the accompanying Issues and Decision Memorandum at Comment F.12.
---------------------------------------------------------------------------
To determine whether TPCO received a benefit, we are following the
same steps outlined above for the purchase of land-use rights.
Specifically, we are preliminarily comparing the rent TPCO paid to
industrial rental rates for factory space in Thailand during the POI.
We are preliminarily attributing the subsidy to TPCO's consolidated
sales, in accordance with 19 CFR 351.525(b)(6)(iii).
On this basis, we preliminarily determine the countervailable
subsidy to be 2.55 percent ad valorem for TPCO.
TPCO also reported that IETC purchased office space from a real
estate company. We do not have sufficient information to determine
whether IETC's purchase gave rise to a countervailable subsidy. We
intend to seek additional information on this issue after the
preliminary determination.
J. Loan and Interest Forgiveness for SOEs
On pages 8-9 of TPCO's September 1, 2009, correction submission,
TPCO reported that in 2006 and 2008 it settled claims related to loans
that were part of a debt-to-equity transaction occurring in 2001. Two
asset management companies held the claims against TPCO.
We preliminarily determine that through this settlement the GOC
forgave debt owed by TPCO and, thus, provided a financial contribution
to TPCO in the form of a direct transfer of funds (section 771(5)(D)(i)
of the Act). The benefit to TPCO is the amount of the debt forgiven
(section 771(5)(D)(i) of the Act and 19 CFR 351.508(a)). Additionally,
we preliminarily determine that this subsidy is de facto specific
because it is limited to TPCO (section 771(5A)(D)(iii)(I) of the Act).
Approval for forgiveness of part of the debt occurred in 2006, and
approval for forgiveness of the remainder of the debt occurred in 2008.
To calculate the countervailable subsidy for the debt forgiveness
approved in each year, we used our standard methodology for non-
recurring benefits. See 19 CFR 351.524(b). Because the amount of the
2006 portion of the debt forgiveness exceeded 0.5 percent of TPCO's
sales in 2006, we have allocated the benefit over the 15-year AUL using
the discount rate described under the Benchmarks and Discount Rates
section above. We attributed the subsidy amount for the POI to TPCO's
consolidated sales. On this basis, we preliminarily determine the
countervailable subsidy to be 0.07 percent ad valorem for TPCO.
For the debt forgiveness approved in 2008, the benefit was less
than 0.5 percent of TPCO's consolidated sales during the POI. Thus, we
have preliminarily expensed the entire amount to the POI. See 19 CFR
351.524(b)(2). On this basis, we preliminarily determine the
countervailable subsidy to be 0.07 percent ad valorem for TPCO.
II. Programs Preliminarily Determined To Be Not Used by Respondents or
To Not Provide Benefits During the POI
A. Other Loans to Jianli
We requested and received loan documentation from the GOC
concerning certain loans provided to Jianli. Based upon our examination
of these loans, we preliminary determine that these loans are
countervailable for reasons other than those described above under
``Policy Lending.'' As all of the information relating to these loans
is business proprietary, we have discussed our analysis in a separate
memorandum. See BPI Loan Memo.
However, based on our analysis, the benefit to Jianli under this
program is less than 0.005 percent ad valorem. As such, consistent with
our past practice, we would not include this program in our preliminary
net countervailing duty rate. See, e.g., CFS from the PRC at ``Analysis
of Programs, Programs Determined Not To Have Been Used or Not To Have
Provided Benefits During the POI for GE,'' and Final Results of
Countervailing Duty Administrative Review: Low Enriched Uranium from
France, 70 FR 39998 (July 12, 2005), and accompanying Issues and
Decision Memorandum at ``Purchases at Prices that Constitute `More than
Adequate Remuneration,''' (``Uranium from France'') (citing Notice of
Final Results of Countervailing Duty Administrative Review and
Rescission of Certain Company-Specific Reviews: Certain Softwood Lumber
Products From Canada, 69 FR 75917 (December 20, 2004), and accompanying
Issues and Decision Memorandum at ``Other Programs Determined to Confer
Subsidies'').
B. Sub-Central Government Programs To Promote Famous Export Brands and
China World Top Brands
TPCO reported that it received a grant under this program in 2007.
On page 50 of the TQR, TPCO stated that the program relates to TPCO's
trademark and does not relate to any specific merchandise.
We preliminarily determine that the total amount of the grant was
less than 0.5 percent of TPCO's consolidated and unconsolidated sales
in 2007. Thus, without prejudice to whether this is a countervailable
subsidy, we preliminarily have allocated the benefit exclusively to
2007 pursuant to 19 CFR 351.524(b)(2). As a result, we preliminarily
determine that TPCO received no benefit from this program during the
POI.
C. Jiangsu Province Famous Brands
Wuxi reported that it received a grant under this program. See WQR
at 26 and W1SR at 24-25. The GOC also provided information on the
program. See G1SR at 39-45.
Based on our analysis, any potential benefit to Wuxi under this
program is less than 0.005 percent ad valorem. As such, consistent with
our past practice, we would not include this program in our preliminary
net countervailing duty rate. See, e.g., CFS from the PRC at ``Analysis
of Programs, Programs Determined Not To Have Been Used or Not To Have
Provided Benefits During the POI for GE,'' and Uranium from France.
Therefore, without prejudice to whether this is a countervailable
subsidy, we preliminarily determine that Wuxi received no benefit from
this program during the POI.
D. Export Incentive Payments Characterized as ``VAT Rebates''
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.'' See 19 CFR 351.517(a); see also
19 CFR 351.102 (for a definition of ``indirect tax'').
To determine whether the GOC provided a benefit under this program,
we compared the VAT exemption upon export to the VAT levied with
respect to the production and distribution of like products when sold
for domestic
[[Page 47224]]
consumption. On page 39 of the GQR, the GOC reported that the VAT
levied on OCTG sales in the domestic market (17 percent) exceeded the
amount of VAT exempted upon the export of OCTG (13 percent). Thus, we
preliminarily determine that the VAT exempted upon the export of OCTG
does not confer a countervailable benefit.
Based upon responses by the GOC, Changbao, TPCO, Wuxi, and Jianli,
we preliminarily determine that the above companies did not apply for
or receive benefits during the POI under the programs listed below.
A. Preferential Loan Programs
1. Treasury Bond Loans to Northeast
2. Preferential Loans for State-Owned Enterprises
3. Preferential Loans for Key Projects and Technologies
4. Loans and Interest Subsidies Provided Pursuant to the Northeast
Revitalization Program
B. Equity Programs
1. Debt-to-Equity Swap for Pangang
2. Equity Infusions
C. Tax Benefit Programs
1. Preferential Income Tax Policy for Enterprises in the Northeast
Region
2. Forgiveness of Tax Arrears For Enterprises in the Old Industrial
Bases of Northeast China
D. Tariff and Indirect Tax Programs
1. Stamp Exemption on Share Transfers Under Non-Tradable Share
Reform
2. Value Added Tax (``VAT'') and Tariff Exemptions for Purchases of
Fixed Assets Under the Foreign Trade Development Fund
E. Land Grants and Discounts
1. Provision of Land Use Rights for Less Than Adequate Remuneration
to Huludao
2. Provision of Land to SOEs for Less Than Adequate Remuneration
F. Provision of Inputs for Less than Adequate Remuneration
1. Provision of Hot-Rolled Steel (flat products) for Less than
Adequate Remuneration
2. Provision of Coking Coal for Less than Adequate Remuneration
G. Grant Programs
1. Foreign Trade Development Fund (Northeast Revitalization
Program)
2. Export Assistance Grants
3. Program to Rebate Antidumping Fees
4. Subsidies for Development of Famous Export Brands and China
World Top Brands
5. Grants to Loss-Making SOEs
6. Export Interest Subsidies
H. Other Regional Programs
1. Five Points, One Line Program
2. High-Tech Industrial Development Zones
I. Subsidies for Foreign-Invested Enterprises
1. Reduced Income Tax Rates for Export-Oriented FIEs
III. Program Preliminarily Determined Not Countervailable
Provision of Low-cost Coke Through the Imposition of Export Restraints
Petitioners alleged that the GOC imposed export restrictions on
coke in the form of export quotas, related export licensing and export
duties. Petitioners maintain that such export restraints had a direct
and discernable effect on the Chinese domestic prices of coke, thereby,
artificially lowering them compared to world market prices.
Accordingly, petitioners asserted that the GOC's export restraints on
coke provided a countervailable subsidy to Chinese OCTG producers
during the POI.
The Department has countervailed export restraint allegations in
only a limited number of cases. In Leather from Argentina, we found an
embargo on hide exports to provide a countervailable subsidy to
Argentine leather producers based on a long-term historical price
comparison that demonstrated a clear link between the imposition of the
embargo and the divergence of prices.\26\ In Coated Free Sheet Paper
from Indonesia: Final Affirmative Countervailing Duty Determination, 72
FR 60642 (October 25, 2007) (``CFS from Indonesia''), we found that a
log embargo provided a countervailable benefit to paper producers, in
part, based upon independent studies that stated that the log embargo
provided a subsidy to downstream producers.\27\ The information on the
record with respect to coke does not support such a finding. Therefore,
we preliminary determine that this program is not countervailable.
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\26\ See Final Affirmative Countervailing Duty Determination and
Countervailing Duty Order; Leather from Argentina; Final Affirmative
Countervailing Duty Determination and Countervailing Duty Order, 55
FR 40212 (October 2, 1990) (``Leather from Argentina'').
\27\ See Coated Free Sheet Paper from Indonesia: Final
Affirmative Countervailing Duty Determination, 72 FR 60642 (October
25, 2007) (``CFS from Indonesia'') and accompanying Issues and
Decision Memorandum, at Comment 22.
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IV. Programs for Which More Information Is Required
A. Exemptions for SOEs From Distributing Dividends to the State
In TSR1a at Exhibit S1-10, TPCO provided the amount of dividends
that it distributed to its owners during the POI. Based on proprietary
information in this exhibit, we intend to seek additional information
on this program after the preliminary determination.
B. Government Provision of Electricity for Less than Adequate
Remuneration
Recently, the Department found that ``that the provision of
electricity in the PRC confers a countervailable subsidy.'' See Certain
Kitchen Shelving and Racks from the People's Republic of China: Final
Affirmative Countervailing Duty Determination, 74 FR 37012 (July 27,
2009), and accompanying Issues and Decision Memorandum (``Kitchen Racks
Issues and Decision Memorandum'') at Comment 11. That finding was based
on facts available. See Kitchen Racks Decision Memorandum at pages 5-6
and Comment 11. Id.
In the instant investigation, the GOC has provided certain
requested information regarding the provision of electricity. However,
the Department has requested additional information on this program
which is still outstanding and we intend to seek further information
regarding the GOC's electricity rate-setting policy after the
preliminary determination.
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 producer/exporter of the subject
merchandise individually investigated. We preliminarily determine the
total estimated net countervailable subsidy rates to be:
[[Page 47225]]
------------------------------------------------------------------------
Net subsidy
Exporter/Manufacturer rate
------------------------------------------------------------------------
Jiangsu Changbao Steel Tube Co. and Jiangsu Changbao 24.33
Precision Steel Tube Co., Ltd............................
Tianjin Pipe (Group) Co., Tianjin Pipe Iron Manufacturing 10.90
Co., Ltd., Tianguan Yuantong Pipe Product Co., Ltd.,
Tianjin Pipe International Economic and Trading Co.,
Ltd., and TPCO Charging Development Co., Ltd.............
Wuxi Seamless Pipe Co, Ltd., Jiangsu Fanli Steel Pipe Co, 24.92
Ltd, Tuoketuo County Mengfeng Special Steel Co., Ltd.....
Zhejiang Jianli Enterprise Co., Ltd., Zhejiang Jianli 30.69
Steel Steel Tube Co., Ltd., Zhuji Jiansheng Machinery
Co., Ltd., and Zhejiang Jianli Industry Group Co., Ltd...
All Others................................................ 21.33
------------------------------------------------------------------------
In accordance with sections 703(d) and 705(c)(5)(A) of the Act, for
companies not investigated, we determined an ``all others'' rate by
weighting the individual company subsidy rate of each of the companies
investigated by the company's exports of the subject merchandise to the
United States. The ``all others'' rate does not include zero and de
minimis rates or any rates based solely on the facts available. In
accordance with sections 703(d)(1)(B) and (2) of the Act, we are
directing U.S. Customs and Border Protection (``CBP'') to suspend
liquidation of all entries of OCTG 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.
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. Due to the anticipated timing of verification
and issuance of verification reports, 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)(i) (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. See 19 CFR
351.309(c)(2) and (d)(2).
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 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, NW., Washington, DC 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 Acting
Assistant Secretary for Import Administration, U.S. Department of
Commerce, Room 1870, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230, 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. See id.
This determination is published pursuant to sections 703(f) and
777(i) of the Act.
Dated: September 8, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. E9-22187 Filed 9-14-09; 8:45 am]
BILLING CODE 3510-DS-P