[Federal Register Volume 75, Number 172 (Tuesday, September 7, 2010)]
[Notices]
[Pages 54302-54322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-22204]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-968]
Aluminum Extrusions From the People's Republic of China:
Preliminary Affirmative Countervailing Duty Determination
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) preliminarily
determines that countervailable subsidies are being provided to
producers and exporters of aluminum extrusions from the People's
Republic of China (the PRC). For information on the estimated subsidy
rates, see the ``Suspension of Liquidation'' section of this notice.
DATES: Effective Date: September 7, 2010.
FOR FURTHER INFORMATION CONTACT: Eric B. Greynolds, AD/CVD Operations,
Office 3, Import Administration, U.S. Department of Commerce, Room
4014, 14th Street and Constitution Avenue, NW., Washington, DC 20230;
telephone: 202-482-6071.
SUPPLEMENTARY INFORMATION:
Case History
On March 31, 2010, the Department received the petition filed in
proper form by the petitioners.\1\ The Department initiated the
investigation on April 20, 2010. See Aluminum Extrusions from the
People's Republic of China: Initiation of Countervailing Duty
Investigation, 75 FR 22114 (April 27, 2010) (Initiation), and
accompanying Initiation Checklist.\2\
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\1\ Petitioners are Aluminum Extrusion Fair Trade Committee:
Aerolite Extrusion Company; Alexandria Extrusions Company; Beneda
Aluminum of Florida, Inc.; William L. Bonnell Company, Inc.;
Frontier Aluminum Corporation; Futura Industries Corporation; Hydro
Aluminum North American Inc.; Kaiser Aluminum Corporation; Profile
Extrusion Company; Sapa Extrusions, Inc.; Western Extrusions
Corporation; and the United Steel, Paper, and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers
International Union.
\2\ Public and public versions of Departmental memoranda
referenced in this Notice are on file in the Central Records Unit
(CRU), Room 1117 in the main building of the Commerce Department.
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On May 18, 2010, the Department of Commerce (the Department)
selected the following firms as mandatory respondents in this
countervailing duty (CVD) investigation: Dragonluxe Limited
(Dragonluxe), Miland Luck Limited (Miland), and Liaoyang Zhongwang
Aluminum Profile Co. Ltd./Liaoning Zhongwang Group (collectively, the
Zhongwang Group) and concurrently issued to them, as well as the
Government of China (GOC), the initial questionnaire.\3\ We confirmed
that the three mandatory respondents received the CVD questionnaire.\4\
Responses were due on June 24, 2010. However, the June 24, 2010,
deadline passed with none of the mandatory respondents submitting a
questionnaire response or requesting an extension.
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\3\ See Memorandum to John M. Andersen, Acting Deputy Assistant
Secretary for Antidumping and Countervailing Duty Operations,
``Respondent Selection,'' (May 18, 2010).
\4\ See Memorandum to the File, ``Confirmation of Delivery of
Initial Questionnaire to Firms Selected As Mandatory Respondents,''
(June 4, 2010) (Delivery of Questionnaire Memorandum).
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The Department received requests for individual examination on a
voluntary basis. On May 6, 2010, we received a request for treatment as
a voluntary respondent from Zhaoqing New Zhongya Aluminum Co., Ltd.
(New Zhongya), Zhongya Shaped Aluminum HK Holding Ltd. (Zhongya HK),
and Karlton Aluminum Company Ltd. (Karlton) (collectively the Zhongya
Companies), Chinese producers of subject merchandise. On May 26, 2010,
Guang Ya Aluminum Industries Co., Ltd. (Guang Ya), Foshan Guangcheng
Aluminum Co., Ltd. (Guangcheng), Guang Ya Aluminum Industries Hong Kong
(Guang Ya HK), Kong Ah International Company Limited (Kong Ah), and
Yongji Guanghai Aluminum Industry Co., Ltd. (Guanghai) (collectively
the Guang Ya Companies), producers of subject merchandise, requested
treatment as a voluntary respondent. In response to requests from the
Zhongya and Guang Ya Companies, on June 21 and 22, 2010, we extended,
by two weeks, the deadline for the submission of questionnaire
responses by these companies to July 8, 2010. Both the Zhongya and
Guang Ya Companies submitted questionnaire responses on July 8, 2010.
On June 21, 2010, the Department postponed the deadline for the
preliminary determination until August 30, 2010. See Aluminum
Extrusions from the People's Republic of China: Notice of Postponement
of Preliminary Determination in the Countervailing Duty Investigation,
75 FR 34982 (June 21, 2010).
On July 8, 2010, petitioners' submitted new subsidy allegations
regarding the Zhongya and Guang Ya Companies.
On July 21, 2010, the Department selected the Zhongya and Guang Ya
Companies as voluntary respondents. See the Memorandum to Ronald K.
Lorentzen, Deputy Assistant Secretary for Import Administration,
``Acceptance of Requests for Treatment As Voluntary Respondents'' (July
21, 2010) (Voluntary Respondent Selection Memorandum), a public
document on file in room 1117 of the CRU. In addition, because
Dragonluxe, Miland, and the Zhongwang Group did not submit responses to
the Department's initial questionnaire, we found the firms to be non-
cooperative, mandatory respondents. Id.
On July 21, 2010, we postponed the GOC's deadline for submitting a
response to the Department's May 18, 2010, initial questionnaire until
August 4, 2010. We subsequently extended the deadline until August 9,
2010. The GOC submitted its initial questionnaire response on August 9,
2010.
On July 21, 2010, we also issued supplemental questionnaires to the
Zhongya Companies, the Guang Ya Companies, and the GOC. We issued
addenda to these supplemental questionnaires on July 28, 2010. The
Zhongya and Guang Ya companies submitted responses to the supplemental
questionnaires on August 6 and August 9, 2010, respectively. The GOC
submitted its supplemental questionnaire response on August 4 and
August 9, 2010. The GOC and the Zhonga and Guang Ya companies submitted
their responses to the
[[Page 54303]]
addendum to the supplemental questionnaire on August 9, 2010.
On July 28, 2010, petitioners submitted additional new subsidy
allegations regarding the Zhongya and Guang Ya Companies. On August 11,
2010, the Department issued a new subsidy memorandum concerning
petitioners' July 13 and July 28, 2010, new subsidy allegations. See
the Department's August 11, 2010, Memorandum, ``New Subsidy Allegations
for the Guang Ya and Zhongya Companies,'' (August 11, 2010) (New
Subsidy Memorandum), a public document on file in room 1117 of the CRU.
The Department issued new subsidy questionnaires to the GOC and the
Zhongya and Guang Ya companies on August 11, 2010. The new subsidy
questionnaires are due on September 3, 2010, and, as a result, the
Department is not able to incorporate the responses to the
questionnaire into the preliminary determination.
On August 16, 19, and 23, 2010, the Zhongya Companies, Guang Ya
Companies, and the GOC submitted their second supplemental
questionnaire responses, respectively.
In the Initiation, the Department deferred initiating on
petitioners' allegation that the GOC, in an effort to benefit domestic
producers, intervenes in the currency market in order to ensure that
the RMB/U.S. dollar exchange rate understates the value of the RMB. See
Initiation, 75 FR at 22117. On August 30, 2010, the Department issued a
decision memorandum concerning petitioners' currency manipulation
allegation. Specifically, the Department has determined not to initiate
an investigation of the allegation. See Memorandum to Ronald K.
Lorentzen, Deputy Assistant Secretary for Import Administration,
``Subsidy Allegation--Currency,'' (August 30, 2010).
Period of Investigation
The period of investigation (POI) for which we are measuring
subsidies is January 1, 2009, through December 31, 2009, which
corresponds to the most recently completed fiscal year. See 19 CFR
351.204(b)(2).
Scope of the Investigation
The merchandise covered by this investigation is aluminum
extrusions which are shapes and forms, produced by an extrusion
process, made from aluminum alloys having metallic elements
corresponding to the alloy series designations published by The
Aluminum Association commencing with the numbers 1, 3, and 6 (or
proprietary equivalents or other certifying body equivalents).
Specifically, the subject merchandise made from aluminum alloy with an
Aluminum Association series designation commencing with the number 1
contains not less than 99 percent aluminum by weight. The subject
merchandise made from aluminum alloy with an Aluminum Association
series designation commencing with the number 3 contains manganese as
the major alloying element, with manganese accounting for not more than
3.0 percent of total materials by weight. The subject merchandise made
from an aluminum alloy with an Aluminum Association series designation
commencing with the number 6 contains magnesium and silicon as the
major alloying elements, with magnesium accounting for at least 0.1
percent but not more than 2.0 percent of total materials by weight, and
silicon accounting for at least 0.1 percent but not more than 3.0
percent of total materials by weight. The subject aluminum extrusions
are properly identified by a four-digit alloy series without either a
decimal point or leading letter. Illustrative examples from among the
approximately 160 registered alloys that may characterize the subject
merchandise are as follows: 1350, 3003, and 6060.
Aluminum extrusions are produced and imported in a wide variety of
shapes and forms, including, but not limited to, hollow profiles, other
solid profiles, pipes, tubes, bars, and rods. Aluminum extrusions that
are drawn subsequent to extrusion (``drawn aluminum'') are also
included in the scope.
Aluminum extrusions are produced and imported with a variety of
finishes (both coatings and surface treatments), and types of
fabrication. The types of coatings and treatments applied to subject
aluminum extrusions include, but are not limited to, extrusions that
are mill finished (i.e., without any coating or further finishing),
brushed, buffed, polished, anodized (including bright-dip anodized),
liquid painted, or powder coated. Aluminum extrusions may also be
fabricated, i.e., prepared for assembly. Such operations would include,
but are not limited to, extrusions that are cut-to-length, machined,
drilled, punched, notched, bent, stretched, knurled, swedged, mitered,
chamfered, threaded, and spun. The subject merchandise includes
aluminum extrusions that are finished (coated, painted, etc.),
fabricated, or any combination thereof.
Subject aluminum extrusions may be described at the time of
importation as parts for final finished products that are assembled
after importation, including, but not limited to, window frames, door
frames, solar panels, curtain walls, or furniture. Such parts that
otherwise meet the definition of aluminum extrusions are included in
the scope. The scope includes aluminum extrusions that are attached
(e.g., by welding or fasteners) to form subassemblies, i.e., partially
assembled merchandise.
Subject extrusions may be identified with reference to their end
use, such as heat sinks, door thresholds, or carpet trim. Such goods
are subject merchandise if they otherwise meet the scope definition,
regardless of whether they are finished products and ready for use at
the time of importation.
The following aluminum extrusion products are excluded: Aluminum
extrusions made from aluminum alloy with an Aluminum Association series
designations commencing with the number 2 and containing in excess of
1.5 percent copper by weight; aluminum extrusions made from aluminum
alloy with an Aluminum Association series designation commencing with
the number 5 and containing in excess of 1.0 percent magnesium by
weight; and aluminum extrusions made from aluminum alloy with an
Aluminum Association series designation commencing with the number 7
and containing in excess of 2.0 percent zinc by weight.
The scope also excludes finished merchandise containing aluminum
extrusions as parts that are fully and permanently assembled and
completed at the time of entry, such as finished windows with glass,
doors, picture frames, and solar panels. The scope also excludes
finished goods containing aluminum extrusions that are entered
unassembled in a ``kit.'' A kit is understood to mean a packaged
combination of parts that contains, at the time of importation, all of
the necessary parts to fully assemble a final finished good.
The scope also excludes aluminum alloy sheet or plates produced by
other than the extrusion process, such as aluminum products produced by
a method of casting. Cast aluminum products are properly identified by
four digits with a decimal point between the third and fourth digit. A
letter may also precede the four digits. The following Aluminum
Association designations are representative of aluminum alloys for
casting: 208.0, 295.0, 308.0, 355.0, C355.0, 356.0, A356.0, A357.0,
360.0, 366.0, 380.0, A380.0, 413.0, 443.0, 514.0, 518.1, and 712.0. The
scope also
[[Page 54304]]
excludes pure, unwrought aluminum in any form.
Imports of the subject merchandise are provided for under the
following categories of the Harmonized Tariff Schedule of the United
States (``HTS''): 7604.21.0000, 7604.29.1000, 7604.29.3010,
7604.29.3050, 7604.29.5030, 7604.29.5060, 7608.20.0030, and
7608.20.0090. The subject merchandise entered as parts of other
aluminum products may be classifiable under the following additional
Chapter 76 subheadings: 7610.10, 7610.90, 7615.19, 7615.20, and 7616.99
as well as under other HTS chapters. While HTS subheadings are provided
for convenience and customs purposes, the written description of the
scope in this proceeding is dispositive.
Scope Comments
In accordance with the Preamble to the Department's regulations
(see Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323 (May
19, 1997) (Preamble)), in the Initiation, we set aside a period of time
for parties to raise issues regarding product coverage, and encouraged
all parties to submit comments within 20 calendar days of publication
of the Initiation.
The Department received several scope comments from interested
parties. The Department is evaluating the comments submitted by the
parties and will issue its decision regarding the scope of the
antidumping (AD) and CVD investigations in the preliminary
determination of the companion AD investigation, which is due for
signature on October 27, 2010.
Injury Test
Because the PRC is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Tariff Act of 1930 (the Act), the
International Trade Commission (the ITC) is required to determine
whether imports of the subject merchandise from the PRC materially
injure, or threaten material injury to, a U.S. industry. On May 17,
2010, the ITC published its preliminary determination finding that
there is a reasonable indication that an industry in the United States
is materially injured by reason of imports of certain aluminum
extrusions from the PRC. See Certain Aluminum Extrusion from China,
Investigation Nos. 701-TA-475 and 731-TA-1177 (Preliminary), 75 FR
34482 (May 17, 2010).
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 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) (CWP from the PRC), and
accompanying Issues and Decision Memorandum (CWP from the PRC 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 (WTO), as
the date from which the Department will identify and measure subsidies
in the PRC for purposes of this investigation. See CWP Decision
Memorandum at Comment 2.
Use of Facts Otherwise Available and Adverse Inferences
Sections 776(a)(1) and (2) of the Tariff Act of 1930, as amended
(the Act), provide that the Department shall apply ``facts otherwise
available'' if, inter alia, necessary information is not on the record
or an interested party or any other person: (A) Withholds information
that has been requested; (B) fails to provide information within the
deadlines established, or in the form and manner requested by the
Department, subject to subsections (c)(1) and (e) of section 782 of the
Act; (C) significantly impedes a proceeding; or (D) provides
information that cannot be verified as provided by section 782(i) of
the Act.
Section 776(b) of the Act further provides that the Department may
use an adverse inference in applying the facts otherwise available when
a party has failed to cooperate by not acting to the best of its
ability to comply with a request for information.
Application of Adverse Inferences: Non-Cooperative Companies
As explained above in the ``Background'' section, the Department
selected Dragonluxe, Miland, and the Zhongwang Group as mandatory
respondents. Accordingly, the Department sent the initial questionnaire
to the three companies on May 18, 2010. The Department confirmed that
the three firms received copies of the initial questionnaire. See
Delivery of Questionnaire Memorandum. Dragonluxe, Miland, and the
Zhongwang Group failed to respond the Department's initial
questionnaire. As a result of the failure of Dragonluxe, Miland, and
the Zhongwang Group to submit responses to the Department's initial
questionnaire, we found the firms to be non-cooperative, mandatory
respondents. See the Voluntary Respondent Memorandum.
We find that, by not responding to the Department's initial
questionnaire, Dragonluxe, Miland, and the Zhongwang Group withheld
requested information and significantly impeded this proceeding. Thus,
in reaching our preliminary determination, pursuant to sections
776(a)(2)(A) and (C) of the Act, we are basing the CVD rate for
Dragonluxe, Miland, and the Zhongwang Group on facts otherwise
available.
We further preliminarily determine that an adverse inference is
warranted, pursuant to section 776(b) of the Act. By failing to submit
responses to the Department's initial questionnaire, Dragonluxe,
Miland, and the Zhongwang Group did not cooperate to the best of their
ability in this investigation. Accordingly, we preliminarily find that
an adverse inference is warranted to ensure that the three companies
will not obtain a more favorable result than had they fully complied
with our request for information. For purposes of this preliminary
determination, we have limited our application of adverse inferences
under section 776(b) of the Act to those programs included in the
Initiation.
In deciding which facts to use as adverse facts available (AFA),
section 776(b) of the Act and 19 CFR 351.308(c)(1) and (2) authorize
the Department to rely on information derived from: (1) The petition;
(2) a final determination in the investigation; (3) any previous review
or determination; or (4) any other information placed on the record.
The Department's practice when selecting an adverse rate from among the
possible sources of information is to ensure that the rate is
[[Page 54305]]
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, e.g., 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.R. Rep. No. 103-316, Vol. I, at 870 (1994), reprinted at 1994
U.S.C.C.A.N. 4040, 4199.
It is the Department's practice in CVD proceedings to select, as
AFA, the highest calculated rate in any segment of the proceeding. See,
e.g., 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 from the PRC), and accompanying Issues and Decision
Memorandum (LWS from the PRC Decision Memorandum) at ``Selection of the
Adverse Facts Available.'' In previous CVD investigations of products
from the PRC, we adapted the practice to use the highest rate
calculated for the same or similar program in other PRC CVD proceeding.
See id. and Certain Tow-Behind Lawn Groomers and Certain Parts Thereof
From the People's Republic of China: Preliminary Affirmative
Countervailing Duty Determination and Alignment of Final Countervailing
Duty Determination With Final Antidumping Duty Determination, 73 FR
70971, 70975 (November 24, 2008) (unchanged in the Certain Tow-Behind
Lawn Groomers and Certain Parts Thereof From the People's Republic of
China: Final Affirmative Countervailing Duty Determination, 74 FR 29180
(June 19, 2009), and accompanying Issues and Decision Memorandum (Lawn
Groomers Decision Memorandum) at ``Application of Facts Available,
Including the Application of Adverse Inferences'').
Thus, under this practice, for investigations involving the PRC,
the Department computes the total AFA rate for non-cooperating
companies generally using program-specific rates calculated for the
cooperating respondents in the instant investigation or calculated in
prior PRC CVD cases. Specifically, for programs other than those
involving income tax exemptions and reductions, the Department applies
the highest calculated rate for the identical program in the
investigation if a responding company used the identical program, and
the rate is not zero. If there is no identical program match within the
investigation, the Department uses the highest non-de minimis rate
calculated for the same or similar program (based on treatment of the
benefit) in another PRC CVD proceeding. Absent an above-de minimis
subsidy rate calculated for the same or similar program, the Department
applies the highest calculated subsidy rate for any program otherwise
listed that could conceivably be used by the non-cooperating companies.
See, e.g., 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 from the PRC Decision Memorandum) at
``Selection of the Adverse Facts Available Rate.''
However, in the instant investigation the cooperating firms are
voluntary respondents. Under 19 CFR 351.204(d)(3), in calculating an
all-others rate under section 705(c)(5) of the Act, the Department will
exclude net subsidy rates calculated for voluntary respondents. Thus,
as discussed in further detail below in the ``Suspension of
Liquidation'' section, in accordance with section 705(c)(5)(A)(ii) of
the Act and 19 CFR 351.204(d)(3), we have equated the all-others rate
with the AFA rates calculated for the non-cooperative companies. We
have adopted this approach because the inclusion of self-selected
respondents in the derivation of the all-others rate could result in
the distortion or manipulation of the all-others rate. See Preamble to
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296,
27310 (May 19, 1997) (Preamble to Procedural Regulations). Furthermore,
in light of this concern, we determine that it is not appropriate to
compute total AFA rates for non-cooperative companies using company-
specific rates calculated for participating respondents, because to do
so would require the use of program rates calculated for voluntary
respondents. In addition, our reasoning not to base the AFA rate on
program rates calculated for voluntary respondents extends to our use
of program rates from other CVD proceedings involving the PRC. Thus, in
deriving the AFA rate for the three non-cooperating mandatory
respondents in the instant investigation, we have not utilized company-
specific program rates that were calculated for voluntary respondents.
Therefore, for purposes of deriving the AFA rate for the three non-
cooperating mandatory respondents, we are using the highest non-de
minimis rate calculated for the same or similar program (based on
treatment of the benefit) in another PRC CVD investigation. Absent an
above-de minimis subsidy rate calculated for the same or similar
program, we are applying the highest calculated subsidy rate for any
program otherwise listed that could conceivably be used by the non-
cooperating companies. See, e.g., LWTP from the PRC Decision Memorandum
at ``Selection of the Adverse Facts Available Rate.''
Further, where the GOC can demonstrate through complete,
verifiable, positive evidence that Dragonluxe, Miland, and the
Zhongwang Group (including all their facilities and cross-owned
affiliates) are not located in particular provinces whose subsidies are
being investigated, the Department will not include those provincial
programs in determining the countervailable subsidy rate for those
companies. See, e.g., Certain Kitchen Shelving and Racks from the
People's Republic of China: Final Affirmative Countervailing Duty
Determination, 74 FR 37012 (July 27, 2009) (Racks From the PRC), and
accompanying Issues and Decision Memorandum (Racks Decision from the
PRC Decision Memorandum) at ``Use of Facts Otherwise Available and
Adverse Facts Available.'' In this investigation, the GOC has not
provided any such information. Therefore, we are making the adverse
inference that the three non-cooperative companies, Dragonluxe, Miland,
and the Zhongwang Group, had facilities and/or cross-owned affiliates
that received subsidies under all of the sub-national programs on which
the Department initiated.
For the seven income tax rate reduction or exemption programs at
issue in the instant investigation, we are applying an adverse
inference that Dragonluxe, Miland, and the Zhongwang Group paid no
income taxes during the POI. The seven programs are: (1) Tax Reductions
for High or New Technology Enterprises (HNTEs) Involved in Designated
Projects, (2) Two Free, Three Half Tax Exemptions for Productive FIEs,
(3) Local Income Tax Exemption and Reduction Programs for
``Productive'' FIEs, (4) Income Tax Benefits for FIEs in Designated
Geographic Location, (5) Income Tax Benefits for Technology- or
Knowledge-Intensive FIEs, (6) Income Tax Benefits for FIES That Are
Also High or New
[[Page 54306]]
Technology Enterprises (HNTEs), and (7) Income Tax Reductions For
Export-Oriented FIEs.
The standard income tax rate for corporations in the PRC during the
POI was 25 percent. See, e.g., ``Notification of the State Council on
Carrying out the Transition Preferential Policies Concerning Enterprise
Income Tax, Guo Fa 2007, No. 39 as included in the March 31, 2010,
petition at Exhibit III-65. Further, the GOC response indicates that
the three percent provincial income tax was no longer in effect during
the POI. See the GOC's August 4, 2010, supplemental questionnaire at 4.
Therefore, the highest possible benefit for all income tax reduction or
exemption programs combined is 25 percent. Therefore, we are applying a
CVD rate of 25 percent on an overall basis for these seven income tax
programs (i.e., these seven income tax programs combined provide a
countervailable benefit of 25 percent). This 25 percent AFA rate does
not apply to tax credit or tax refund programs. This approach is
consistent with the Department's past practice. See, e.g., CWP from the
PRC Decision Memorandum at 2, and LWTP from the PRC Decision Memorandum
at ``Selection of the Adverse Facts Available Rate.''
The 25 percent AFA rate does not apply to the following nine income
tax credit and rebate or accelerated depreciation programs found
countervailable because such programs may not affect the tax rate and,
hence, the subsidy conferred, in the current year: (1) Value Added Tax
(VAT) and Tariff Exemptions on Imported Equipment to FIEs and Certain
Domestic Enterprises, (2) VAT Rebates on FIEs Purchases of Chinese-Made
Equipment, (3) City Tax and Surcharge Exemptions for FIEs, and (4) Tax
Offsets for Research and Development, (5) Income Tax Credits for
Domesticall-Owned Companies Purchasing Chinese-Made Equipment, (6) Tax
Reductions for FIEs Purchasing Chinese-Made Equipment, (7) Tax Refunds
for Reinvesting of FIE Profits in Export-Oriented Enterprises, (8)
Accelerated Depreciation for Enterprises Located in Northeast Region,
and (9) Forgiveness of Tax Arrears for Enterprises in the ``Old
Industrial Bases'' of Northeast China.
Based on the methodology discussed above, we preliminarily
determine to use the highest non-de minimis rate for any indirect tax
program from a China CVD investigation. The rate we select is 1.51
percent, calculated for the ``Value-Added Tax and Tariff Exemptions on
Imported Equipment'' program in CFS from the PRC. See CFS Decision
Memorandum at ``VAT and Tariff Exemptions on Imported Equipment''.
Regarding the Preferential Loans as Part of the Northeast
Revitalization Program and the Policy Loans for Aluminum Extrusion
Producers, we preliminarily determine to apply the highest non-de
minimis subsidy rate for any loan program in a prior China CVD
investigation. The highest non-de minimis subsidy rate is 8.31 percent
calculated for the ``Government Policy Lending Program,'' from LWTP
from the PRC. See Lightweight Thermal Paper From the People's Republic
of China: Notice of Amended Final Affirmative Countervailing Duty
Determination and Notice of Countervailing Duty Order, 73 FR 70958
(November 24, 2008) (Amended LWTP from the PRC).
We are investigating a number of grant programs including: (1)
State Key Technology Renovation Fund, (2) GOC and Sub-Central
Government Grants, Loans, and Other Incentives for Development of
Famous Brands and China World Top Brands, (3) Grants to Cover Legal
Fees in Trade Remedy Cases in Shenzhen, (4) Special Fund for Energy
Saving Technology Reform: Guangdong Province, (5) The Clean Production
Technology Fund, (6) Grants for Listing Shares: Liaoyang City
(Guangdong Province), Wenzhou Municipality (Zhejiang Province), and
Quanzhou Municipality (Fujian Province), (7) Northeast Region Foreign
Trade Development Fund, and (8) Northeast Region Technology Reform
Fund. The Department has not calculated above de minimis rate for any
of these programs in prior investigations, and, moreover, all
previously calculated rates for grant programs from prior China CVD
investigations have been de minimis. Therefore, for each of these grant
programs, we preliminarily determine to use the highest calculated
subsidy rate for any program otherwise listed, which could have been
used by the non-cooperative companies. We preliminarily determine that
this rate is 8.31 percent from the ``Government Policy Lending
Program,'' in the
Amended LWTP From the PRC
The Department is also investigating several provision of a good or
service for less than adequate remuneration (LTAR) programs: Provision
of Land-Use Rights for LTAR in Liaoyang High-Tech Industry Development
Zone, Provision of Land-Use Rights for LTAR to SOEs, and Provision of
Primary Aluminum for LTAR. For two of these LTAR programs, we are
applying the highest non-de minimis subsidy rate for any provision of
land-use rights for LTAR program in a prior China CVD investigation.
The highest non-de minimis subsidy rate is 2.55 percent calculated for
the ``Subsidies Provided in the TBNA and the Tianjin Economic and
Technological Development Area'' from OCTG from the PRC. See OCTG from
the PRC Decision Memorandum at ``Subsidies Provided in the TBNA and the
Tianjin Economic and Technological Development Area.'' Concerning the
provision of Primary Aluminum for LTAR, the Department has not
previously investigated allegations concerning this input product.
Therefore, for this program, we are applying the highest calculated
subsidy rate for any program otherwise listed that could conceivably be
used by the non-cooperating companies. We preliminarily determine that
this similar program rate is 2.55 percent from OCTG from the PRC. Id.
In addition, the Department is investigating government purchases
of aluminum extrusions for more than adequate remuneration (MTAR). The
Department has not previously investigated allegations concerning this
input. Therefore, for this program, we are applying the highest
calculated subsidy rate for any program otherwise listed that could
conceivably be used by the non-cooperating companies. We preliminarily
determine that this rate is 8.31 percent from the Amended LWTP from the
PRC.
On this basis, we preliminarily determine the AFA countervailable
subsidy rate for the non-cooperative respondents (Dragonluxe, Miland,
and the Zhongwang Group) to be 137.65 percent ad valorem. See AFA
Memorandum.
As noted above, on July 8 and July 28, 2010, petitioners submitted
new subsidy allegations. On August 11, 2010, the Department initiated
investigations of all the allegations included in petitioners' July 8
and July 28, 2010, submissions. See New Subsidy Memorandum. On August
11, 2010, the Department also sent a new subsidy questionnaire to the
GOC as well as to the Zhongya and Guang Ya Companies regarding these
new subsidy allegations. The new subsidy questionnaire responses are
currently due on September 5, 2010. Therefore, for purposes of the
preliminary determination, we have not included these additional
subsidy programs under investigation in this proceeding in the total
AFA rates calculated for Dragonluxe, Miland, and the Zhongwang Group.
We invite interested parties to comment on whether the Department
should include the additional alleged programs and the various programs
self-reported by the
[[Page 54307]]
Guang Ya and Zhongya companies into the AFA rate calculated for the
non-cooperating, mandatory respondents.
Various Grant Programs Self-Reported by the Guang Ya Companies
The Guang Ya Companies self-reported receiving various lump sum
cash grants from the GOC. As a result, the Department sent
questionnaires to the GOC regarding these programs. See the July 21,
2010, first supplemental questionnaire sent to the GOC. In its
supplemental questionnaire responses the GOC provided information
concerning the nature of the programs and indicated that the programs
were not contingent upon exports, and thus are not specific under
section 771(5A)(B) of the Act. However, the GOC failed to respond to
the Department's questions concerning the distribution of benefits,
which is information that the Department uses to determine whether
alleged subsidy programs are de facto specific under section
771(5A)(D)(iii) of the Act. See the GOC's August 9, 2010, supplemental
questionnaire response. Further, the GOC failed to supply the requested
benefit distribution data in its second supplemental questionnaire
response, despite the Department's request that it do so. See the GOC's
August 19, 2010, second supplemental questionnaire response.
Because the GOC failed to provide the requested benefit
distribution data, we find that necessary information is not on the
record, pursuant to section 776(a) of the Act and that the GOC has not
cooperated to the best of its ability. Therefore, for those programs
for which we lack the necessary information and for which the GOC
failed to cooperate, in accordance with section 776(b) of the Act, we
are assuming as an adverse inference that the programs are de facto
specific as domestic subsidies within the meaning of section
771(5A)(D)(iii) of the Act.
The Zhongya Companies' Failure To Report All of Its Sales of Aluminum
Extrusions Under the Purchase of Aluminum Extrusions for MTAR Program
In its July 8, 2010, questionnaire response, the Zhongya Companies
failed to provide any information concerning the purchase of aluminum
extrusions for MTAR program. In response to the Department's July 21,
2010, supplemental questionnaire, the Zhongya Companies provided MTAR
data. See the Zhongya Companies' August 6, 2010, first supplemental
questionnaire response. However, the dataset was not complete.
Specifically, the Zhongya Companies provided data for its ``top 10
domestic customers.'' Id. The Zhongya Companies state that the top 10
customers accounted for ``more than 70 percent of New Zhongya's total
domestic sales of subject merchandise during the POI.'' Id. The Zhongya
Companies did not identify its other customers; therefore we have
determined that necessary information is not on the record and that the
Zhongya Companies have therefore ``significantly impeded the
proceeding,'' pursuant to sections 776(a)(1) and (a)(2) of the Act.
In light of its failure to provide the requested benefit
distribution data, we find that the Zhongya Companies have failed to
cooperate to the best of its ability. See section 776(b) of the Act.
Therefore, we are applying facts available with an adverse inference
with respect to the 30 percent of the sales that the Zhongya Companies
did not report to the Department.
Materials used in certain government projects are subject to the
GOC's ``Government Procurement Law of the PRC'' (Procurement Law). See
the March 31, 2010, petition at Exhibit III-153. Under the Procurement
Law, government authorities are permitted to procure imported goods or
services only when domestic goods or services are either unavailable or
cannot be obtained under ``reasonable commercial conditions.'' The
``Implementing Measures on the Government Procurement Law of the PRC''
(Implementing Measures of the Procurement Law) state that:
The situation where reasonable commercial terms are not
available for procurement under Article 10 of the Government
Procurement Law refers to instances where the lowest offered price
for domestic goods, construction, or services, that meet the
requirements of procurement documents, exceeds the lowest offered
price for foreign goods, construction, or services by more than 20
percent.
See the March 31, 2010, petition at Exhibit III-155.
Based on the information in the Implementing Measures of the
Procurement Law, we are assuming as AFA under section 776(b) of the Act
that the Zhongya Companies' unreported sales were made to GOC
authorities and, thus, constitute a financial contribution under
section 771(5)(D)(iv) of the Act. We are further assuming as AFA that
the Zhongya Companies received a 20 percent price premium on the
unreported sales volumes of aluminum extrusions. For further
information concerning the derivation of the benefit, see the
``Purchase of Aluminum Extrusions for MTAR'' section below.
Regarding our decision to apply AFA, we acknowledge that the GOC
has stated in its questionnaire response that the Zhongya Companies did
not sell its aluminum extrusions under any procurement program. See,
e.g., the GOC's August 9, 2010, questionnaire response at 38. However,
we preliminarily determine that the Zhongya Companies' failure to
provide any information concerning the missing ``30 percent'' of its
customers has impeded the Department's ability to adequately
investigate whether these customers acquired subject merchandise from
the Zhongya Companies for MTAR. Thus, we preliminarily determine that
the application of AFA with regard to the Zhongya Companies' use of
this program is warranted.
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) provides that the Department will attribute
subsidies received by certain other companies to the combined sales of
those companies when: (1) Two or more corporations with cross-ownership
produce the subject merchandise; (2) a firm that received a subsidy is
a holding or parent company of the subject company; (3) a firm that
produces an input that is primarily dedicated to the production of the
downstream product; or (4) a corporation producing non-subject
merchandise received a subsidy and transferred the subsidy to a
corporation with cross-ownership with the subject 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).
[[Page 54308]]
The Guang Ya Companies
As discussed above, the Guang Ya Companies are Guang Ya,
Guangcheng, Guanghai, Guang Ya HK, and Kong Ah. Guang Ya and Guangcheng
are the producers of subject merchandise. Guanghai produces aluminum
billet that it supplies to Guangcheng. Guang Ya HK and Kong Ah are Hong
Kong-based trading companies that export merchandise produced by Guang
Ya and Guangcheng. According to the Guang Ya Companies, only Guang Ya
HK exported subject merchandise to the United States that was produced
by the Guang Ya Companies. We find that the Guang Ya Companies are
cross-owned with each other via common ownership within the meaning of
19 CFR 351.525(b)(6)(vi). See the Guang Ya Companies July 8, 2010,
questionnaire response at Exhibit 1.
Guang Ya and Guangcheng are the members of the Guang Ya Companies
that produce subject merchandise. Therefore, in accordance with 19 CFR
351.525(b)(6)(ii), we have attributed subsidies received by Guang Ya
and Guangcheng to the products produced by the two firms. According to
the questionnaire response of the Guang Ya Companies, Guanghai is an
input supplier to Guangcheng. Therefore, in accordance with 19 CFR
351.525(b)(6)(iv), we would attribute subsidies received by Guanghai to
the combined sales of the input made by Guanghai and downstream
products produced by Guang Ya and Guangcheng, excluding the sales
between corporations.\5\
---------------------------------------------------------------------------
\5\ For purposes of the preliminary determination, we have not
calculated net subsidy rates for Guanghai.
---------------------------------------------------------------------------
As explained above, during the POI Guang Ya HK exported to the
United States aluminum extrusions produced by Guang Ya and Guangcheng.
In supplemental questionnaires issued to the Guang Ya Companies, the
Department inquired about the sales value of extrusions destined for
the United States that Guang Ya and Guangcheng made to Guang Ya HK
during the POI. The Department also inquired about the sales value of
aluminum extrusions Guang Ya HK made to the United States that during
the POI. The purpose of these questions was to ascertain the extent to
which the ``export values'' recorded in the books of Guang Ya and
Guangcheng did not reflect the actual U.S. prices because there was a
mark-up on those sales by Guang Ya HK, the Hong Kong-based affiliate.
The Department has six criteria it uses to determine whether such a
difference in sales values exists and whether an adjustment to the net
subsidy rate calculations is warranted. See, e.g., Circular Welded
Austenitic Stainless Pressure Pipe from the People's Republic of China:
Final Affirmative Countervailing Duty Determination, 74 FR 4936
(January 28, 2009) (CWASPP from the PRC), and accompanying Issues and
Decision Memorandum (CWASPP from the PRC Decision Memorandum) at
``Adjustment to Net Subsidy Rate Calculation,'' in which the Department
describes the six criteria utilized by the Department.
We have analyzed the sales information supplied by the Guang Ya
Companies. Based on our review, we preliminarily determine that an
adjustment to the net subsidy rate, as described in CWASPP from the
PRC, is not warranted. We preliminarily determine that the sales data
reported by the Guang Ya Companies indicate that the sales value of
aluminum extrusions destined for the United States that Guang Ya and
Guangcheng made to Guang Ya HK during the POI exceed the sales value of
aluminum extrusions that Guang Ya HK made to the United States during
the POI. See the Guang Ya Companies' August 23, 2010, supplemental
questionnaire at Exhibit 93 and the Guang Ya Companies' August 9, 2010,
supplemental questionnaire at Exhibit 56.
The Zhongya Companies
As discussed above, the Zhongya Companies are New Zhongya, Zhongya
HK, and Karlton. New Zhongya is the producer of subject merchandise.
Zhongya HK and Karlton are Hong-Kong based firms that are cross-owned
with New Zhongya, within the meaning of 19 CFR 351.525(b)(6)(vi).
During the POI, Zhongya HK exported products, including subject
merchandise, produced by New Zhongya. During the POI, New Zhongya did
not export aluminum extrusions to the United States through Karlton. In
this preliminary determination, in accordance with 19 CFR
351.525(b)(6)(ii), we are attributing subsidies received by New Zhongya
to products produced by New Zhongya and exported through Zhongya HK.
In supplemental questionnaires issued to the Zhongya Companies, the
Department inquired about the sales value of extrusions destined for
the United States which New Zhongya produced and sold to Zhongya HK
during the POI. As explained above, the Department also inquired about
the sales value of aluminum extrusions which New Zhongya produced and
which Zhongya HK sold to the United States that during the POI. The
purpose of these questions was to ascertain the extent to which the
``export values'' recorded in the books of New Zhongya did not reflect
the actual U.S. prices due to a mark-up on those sales by Zhongya HK,
the Hong Kong-based affiliate. Based on our review of the information
submitted by the Zhongya Companies, we preliminarily determine that no
such mark-up exists and, as a result, an adjustment to the net subsidy
rate, as discussed in CWASPP from the PRC, is not necessary. See
Zhongya Companies July 8, 2010, questionnaire response at 6 for
information concerning the sales of aluminum extrusions Zhongya HK made
to the United States and the Zhongya Companies August 16, 2010, second
supplemental questionnaire response at 2 for information concerning the
sales of aluminum extrusions destined for the United States that New
Zhongya made to Zhongya HK. In addition, we find that the Zhongya
Companies have not adequately responded to the Department's questions
concerning the extent to which the price charged by New Zhonga to
Zhongya HK differs from the price Zhongya HK charges to its U.S.
Customers, which is one of the six criteria the Departments examines
when determining whether to adjust the net subsidy rate. See the
Zhongya Companies August 6, 2010, first supplemental questionnaire
response at 12.
Benchmarks and Discount Rates
The Department is investigating loans received by the Guang Ya
Companies from Chinese policy banks and state-owned commercial banks
(SOCBs), which are alleged to have been granted on a preferential, non-
commercial basis. Therefore, the derivation of the Department's
benchmark and discount rates is discussed below.
Benchmark 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. See 19 CFR 351.505(a)(3)(i). 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.'' See 19 CFR
351.505(a)(3)(ii).
As noted above, section 771(5)(E)(ii) of the Act indicates that the
benchmark
[[Page 54309]]
should be a market-based rate. However, for the reasons explained in
CFS from the PRC, 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. See CFS Decision
Memorandum at Comment 10. 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, because Chinese banks reflect significant government
intervention in the banking sector, 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. 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 (Softwood Lumber from
Canada 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 and more recently
updated in LWTP from the PRC. See CFS Decision Memorandum at Comment
10; see also LWTP from the PRC Decision Memorandum at ``Benchmarks and
Discount Rates.'' This benchmark interest rate is based on the
inflation-adjusted interest rates of countries with per capita gross
national incomes (GNIs) similar to the PRC. The benchmark interest rate
takes into account a key factor involved in interest rate formation
(i.e., the quality of a country's institutions), which is not directly
tied to the state-imposed distortions in the banking sector discussed
above.
This methodology relies on data published by the World Bank and
International Monetary Fund (see further discussion below). For the
year 2009, the World Bank, however, has not yet published all the
necessary data relied on by the Department to compute a short-term
benchmark interest rate for the PRC. Specifically, the following data
are not yet available: World Governance Indicators and World Bank
classifications of lower-middle income countries based on GNI per
capita in U.S. dollars. Therefore, for purposes of this preliminary
determination, where the use of a short-term benchmark rate for 2009 is
required, we have applied the 2008 short-term benchmark rate for the
PRC, as calculated by the Department (see discussion below). The
Department notes that the current 2008 loan benchmark may be updated,
by the final determination, pending the release of all the necessary
2009 data.
The 2008 short-term benchmark was computed following the
methodology developed in CFS from the PRC. We first determined which
countries are similar to the PRC in terms of 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 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, and 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 excluded. Finally, for the
calculation of the inflation-adjusted short-term benchmark rate, we
also excluded any countries with aberrational or negative real interest
rates for the year in question.
For the resulting inflation-adjusted benchmark lending rate, see
Memorandum to the File from Eric B. Greynolds, Program Manager, AD/CVD
Operations, Office 3, regarding ``2008 Short-Term Interest Rate
Benchmark'' (August 30, 2010). Because these are inflation-adjusted
benchmarks, it is necessary to adjust the respondent's interest
payments for inflation. This was done using the PRC inflation rate as
reported in the IFS.
Benchmark for Long-Term RMB Denominated Loans: The lending rates
reported in the IFS represent short- and medium-term lending, and there
are no sufficient publicly available long-term interest rate data upon
which to base a robust long-term benchmark. 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) (LWRP from the PRC), and accompanying Issues and Decision
Memorandum (LWRP Decision Memorandum) at ``Discount Rates.'' 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 from the PRC Decision Memorandum)
at Comment 14.
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 provided the subsidy.
Analysis of Programs
Programs Preliminarily Determined To Be Countervailable
A. Exemption From City Construction Tax and Education Tax for FIEs
Pursuant to the Circular Concerning Temporary Exemption from Urban
Maintenance and Construction Tax and Additional Education Fees for
Foreign-Funded and Foreign Enterprises (GUOSHUIFA {1994{time} No. 38),
the local tax authorities exempt all FIEs and
[[Page 54310]]
foreign enterprises from the city maintenance and construction tax and
education fee surcharge. The construction tax is based on the amount of
product tax; value added tax, and/or business tax actually paid by the
taxpayer. For taxpayers located in urban areas, the rate is seven
percent; for taxpayers located in counties or townships, the rate is
five percent; and for taxpayers located in areas other than urban
areas, counties, and townships, the rate is one percent. Regarding the
education fee surcharge, FIEs pay only one percent of the actual amount
of the product tax, value-added tax, and business tax paid, whereas
other entities pay four percent of that amount. Guangcheng and New
Zhongya are FIEs and, therefore, received exemptions under this
program.
Consistent with our finding in Racks from the PRC, we preliminarily
determine that the exemptions from the city construction tax and
education surcharge under this program confer a countervailable
subsidy. See Racks from the PRC Decision Memorandum at ``Exemption from
City Construction Tax and Education Tax for FIEs in Guangdong
Province.'' The exemptions are financial contributions in the form of
revenue forgone by the government and provide a benefit to the
recipient in the amount of the savings. See section 771(5)(D)(ii) of
the Act and 19 CFR 351.509(a)(1). We also preliminarily determine that
the exemptions afforded by this program are limited as a matter of law
to certain enterprises, i.e., FIEs, and, hence, specific under section
771(5A)(D)(i) of the Act. To calculate the benefit, we treated the tax
savings and exemptions received by Guangcheng and New Zhongya as
recurring benefits, consistent with 19 CFR 351.524(c)(1). Guangcheng
and New Zhongya both reported that they are exempted from the city
construction tax and education fee surcharge.
To compute the amount of city construction tax savings, we first
determined the rate the companies would have paid in the absence of the
program. Both Guangcheng and New Zhongya reported that a seven percent
construction tax would have been applied to them absent the program.
They further reported that they paid a one percent education tax
instead of a four percent education tax that would have been applicable
absent the program. Thus, we compared the rates the companies would
have paid during the POI in the absence of the program (seven percent
for the construction tax and 4 percent on the education tax) with the
rate the companies paid (zero percent construction tax and 1 percent
education tax), because they are FIEs. To calculate the total benefit
under the program, we summed the savings from the construction tax
exemption and education fee exemption.
To calculate the program rate, we divided the companies' tax
savings received during the POI by their total consolidated sales, net
of intra-company sales. Specifically, for New Zhongya, we divided the
benefit by Zhongya's total sales for the POI. For Guangcheng, we
divided the benefit the combined total sales of Guangcheng and Guang
Ya.
On this basis, we preliminarily determine the countervailable
subsidy to be 0.01 percent ad valorem for the Guang Ya Companies and
0.07 percent ad valorem for the Zhongya Companies.
B. GOC and Sub-Central Government Grants, Loans, and Other Incentives
for Development of Famous Brands and China World Top Brands
The Famous Brand program is administered at the central,
provincial, and municipal government level. During the POI, New Zhongya
and Guang Ya reported receiving grants under the Famous Brand program
from their respective local governments.
Though operated at the local level, the GOC issued ``Measures for
the Administration of Chinese Top-Brand Products,'' which state that
the requirements for application require that firms provide information
concerning their export ratio as well as the extent to which their
product quality meets international standards. See Chapter 3 of the
``Measures for the Administration of Chinese Top-Brand Products'' at
Exhibit 24 of the Guang Ya Companies July 8, 2010, questionnaire
response.
Based on the information available on the record of the
investigation, we determine that the grants that the Zhongya and Guang
Ya Companies received under the famous brand program constitute a
financial contribution and a benefit under sections 771(5)(D)(i) and
771(5)(E) of the Act, respectively. Regarding specificity, section
771(5A)(B) of the Act states that an export subsidy is a subsidy that
is, in law or in fact, contingent upon export performance, alone or as
one of two or more conditions. Based on the information on the record
of the investigation, we determine that grants provided to the Zhongya
and Guang Ya Companies under the famous brands program are contingent
on export activity. Therefore, we find that the program is specific
under section 771(5A)(B) of the Act. Our approach in this regard is
consistent with the Department's findings in prior CVD proceedings
involving the PRC. See, e.g., Pre-Stressed Concrete Steel Wire Strand
from the People's Republic of China: Final Affirmative Countervailing
Duty Determination, 75 FR 28557 (May 21, 2010) (PC Strand from the
PRC), and accompanying Issues and Decision Memorandum (PC Strand from
the PRC Decision Memorandum) at ``Subsidies for Development of Famous
Export Brands and China World Top Brands at Central and Sub-Central
Level.''
The grants that the Zhongya and Guang Ya Companies received during
the POI were less than 0.5 percent of their respective total export
sales in the year of approval/receipt. Therefore, pursuant to 19 CFR
351.524(b)(2), we expensed the grant amount year of receipt. Guang Ya
also received a grant prior to the POI that was greater than 0.5
percent of its total export sales in the year of approval/receipt.
Therefore, we allocated the benefit over time using the methodology
provided under 19 CFR 351.524(d)(2).
On this basis, we calculated a total net subsidy rate of 0.32
percent ad valorem for the Guang Ya Companies. Concerning the Zhongya
Companies, the benefit it received under the program was fully expensed
prior to the POI.
C. Two Free, Three Half Income Tax Exemptions for FIEs
The Foreign Invested Enterprise and Foreign Enterprise Income Tax
Law (FIE Tax Law), enacted in 1991, established the tax guidelines and
regulations for FIEs in the PRC. The intent of this law is to attract
foreign businesses to the PRC. According to Article 8 of the FIE Tax
Law, FIEs that are ``productive'' and scheduled to operate not less
than 10 years are exempt from income tax in their first two profitable
years and pay half of their applicable tax rate for the following three
years. FIEs are deemed ``productive'' if they qualify under Article 72
of the Detailed Implementation Rules of the Income Tax Law of the
People's Republic of China of Foreign Investment Enterprises and
Foreign Enterprises. New Zhongya reported receiving benefits under this
program that are attributable to the POI.
We determine that the exemption or reduction in 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
recipients in the amount of the tax savings. See sections 771(5)(D)(ii)
and 771(5)(E) of the Act and 19 CFR 351.509(a)(1). We further determine
that the exemption/reduction afforded by this program is limited as a
[[Page 54311]]
matter of law to certain enterprises, ``productive'' FIEs, and, hence,
is specific under section 771(5A)(D)(i) of the Act. Our approach in
this regard is consistent with the Department's practice. See CFS from
the PRC Decision Memorandum at ``Two Free/Free Half Program.''
To calculate the benefit from this program, we treated the income
tax exemption claimed as a recurring benefit, consistent with 19 CFR
351.524(c)(1). We then compared the tax rate paid to the rate that
otherwise would have been paid by New Zhongya and multiplied the
difference by the company's taxable income. We divided the benefit by
the total sales of the Zhongya Companies during the POI.
On this basis, we determine a countervailable subsidy of 0.53
percent ad valorem for the Zhongya Companies.
D. Import Tariff and VAT Exemptions for FIEs and Certain Domestic
Enterprises Using Imported Equipment in Encouraged Industries
Enacted in 1997, the Circular of the State Council on Adjusting Tax
Policies on Imported Equipment (Guofa No. 37) (Circular 37) exempts
both FIEs and certain domestic enterprises from the VAT and tariffs on
imported equipment used in their production so long as the equipment
does not fall into prescribed lists of non-eligible items. The National
Development and Reform Commission (NDRC) and the General Administration
of Customs are the government agencies responsible for administering
this program. Qualified enterprises receive a certificate either from
the NDRC or one of its provincial branches. To receive the exemptions,
a qualified enterprise only has to present the certificate to the
customs officials upon importation of the equipment. The objective of
the program is to encourage foreign investment and to introduce foreign
advanced technology equipment and industry technology upgrades. The
Department has previously found this program to be countervailable.
See, e.g., Citric Acid Decision from the PRC Memorandum at ``VAT Rebate
on Purchases by FIEs of Domestically Produced Equipment.''
New Zhongya, an FIE, reported receiving VAT and tariff exemptions
under this program for imported equipment prior to and during the POI.
Guangcheng, also an FIE, reported receiving VAT and tariff exemptions
under this program for imported equipment prior to the POI.
We determine that the VAT and tariff exemptions on imported
equipment confer a countervailable subsidy. The exemptions are a
financial contribution in the form of revenue forgone by the GOC and
the exemptions provide a benefit to the recipients in the amount of the
VAT and tariff savings. See section 771(5)(D)(ii) of the Act and 19 CFR
351.509(a)(1). We further determine that the VAT and tariff exemptions
under this program are specific under section 771(5A)(D)(iii)(I) of the
Act because the program is limited to certain enterprises. As described
above, only FIEs and certain domestic enterprises are eligible to
receive VAT and tariff exemptions under this program. No information
has been provided to demonstrate that the beneficiary companies are a
non-specific group. As noted above, the Department finds FIEs to be a
specific group under section 771(5A)(D)(i) of the Act. In addition, the
additional certain enterprises requiring approval by the NDRC does not
render the program to be non-specific. See, e.g., CFS from the PRC
Decision Memorandum at Comment 16, and 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) (Tires from the
PRC), and accompanying Issues and Decision Memorandum (Tires from the
PRC Decision Memorandum) at ``VAT and Tariff Exemptions for FIEs and
Certain Domestic Enterprises Using Imported Equipment on Encouraged
Industries.''
Normally, we treat exemptions from indirect taxes and import
charges, such as the VAT and tariff exemptions, as recurring benefits,
consistent with 19 CFR 351.524(c)(1) and allocate these benefits only
in the year that they were received. However, when an indirect tax or
import charge exemption is provided for, or tied to, the capital
structure or capital assets of a firm, the Department may treat it as a
non-recurring benefit and allocate the benefit to the firm over the
AUL. See 19 CFR 351.524(c)(2)(iii) and 19 CFR 351.524(d)(1). Therefore,
we have examined the VAT and tariff exemptions that New Zhongya
received under the program during the POI and prior years.
To calculate the amount of import duties exempted under the
program, we multiplied the value of the imported equipment by the
import duty rate that would have been levied absent the program. To
calculate the amount of VAT exempted under the program, we multiplied
the value of the imported equipment (inclusive of import duties) by the
VAT rate that would have been levied absent the program. Our derivation
of VAT in this calculation is consistent with the Department's approach
in prior cases. 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)
(Line Pipe from the PRC), and accompanying Issues and Decision
Memorandum (Line Pipe from the PRC Decision Memorandum) at Comment 8
(``* * * we agree with Petitioners that VAT is levied on the value of
the product inclusive of delivery charges and import duties''). Next,
we summed the amount of duty and VAT exemptions received in each year.
For each year, we then divided the total grant amount by the
corresponding total sales of the respondents for the year in question.
For each company, we divided the total amount of VAT and tariff
exemptions by the corresponding total sales for year in which the
exemptions were received. Those exemptions that were less than 0.5
percent of total sales were expensed to the year of receipt. Those
exemptions that were greater than 0.5 percent of total sales were
allocated over the AUL using the methodology described under 19 CFR
351.524(d)(2).
On this basis, we determine the countervailable subsidy to be 0.52
percent ad valorem for the Zhongya Companies and less than 0.005
percent ad valorem for the Guang Ya Companies.\6\
---------------------------------------------------------------------------
\6\ Consistent with our past practice, we did not include this
program in the Guang Ya Companies' total net subsidy rate because it
is not numerically insignificant. See, e.g., CFS from the PRC
Decision Memorandum at ``Analysis of Programs, Programs Determined
Not To Have Been Used or Not To Have Provided Benefits During the
POI for GE.''
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E. International Market Exploration Fund (SME Fund)
The SME Fund, established under CQ (2000) No. 467, encourages the
development of small and medium-sized enterprises (SMEs) by reducing
the risk of operation for these enterprises in the international
market. To qualify for the program, a company needs to satisfy the
criteria in CQ (2000), which provides that the SME should have export
and import rights, exports of less than $15,000,000, an accounting
system, personnel with foreign trade skills, and a plan for exploring
the international market. Guang Ya reported receiving funds under this
program in 2008 and 2009 from the Shishan Town Economic Development
Office.
We further preliminarily determine that the grants provided under
the SME Fund constitute a financial contribution and benefit under
sections 771(5)(D)(i)
[[Page 54312]]
and 771(5)(E) of the Act, respectively. We also determine that this
program is an export subsidy, under section 771(5A)(B) of the Act,
because the program supports the international market activities of
SMEs and is limited to enterprises that have exports of less than
$15,000,000. Our findings in this regard are consistent with the
Department's practice. See Wire Decking from the People's Republic of
China: Final Affirmative Countervailing Duty Determination, 75 FR 32902
(June 10, 2010) (Wire Decking from the PRC), and accompanying Issues
and Decision Memorandum (Wire Decking from the PRC Decision Memorandum)
at ``International Market Exploration Fund (SME Fund).'' Information on
the record indicates that the SME Fund provides one-time assistance.
Therefore, consistent with 19 CFR 351.524(c)(1), we are treating the
grants received under this program as ``non-recurring.'' To measure the
benefits of each grant that are allocable to the POI, we first
conducted the ``0.5 percent test'' for the grant. See 19 CFR
351.524(b)(2). We divided the total amount approved in 2008 and 2009 by
the total export sales of Guang Ya and Guangcheng in 2008 and 2009. As
a result, we found that the grants received by Guang Ya are less than
0.5 percent and fully expensed to the year of receipt.
Therefore, for the POI, we calculated a total net subsidy rate of
0.01 percent ad valorem for the Guang Ya Companies.
F. Preferential Tax Program for FIEs Recognized as High or New
Technology Enterprises (HNTEs)
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), FIEs designated as HNTEs in high
and new technology parks pay a reduced income tax rate of 15 percent.
We preliminarily determine that the reduction in the income tax
paid by FIEs designated as HNTEs under this program confers a
countervailable subsidy. The 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 sections
771(5)(D)(ii) and 771(5)(E) of the Act, respectively, and 19 CFR
351.509(a)(1). We also determine that the reduction afforded by this
program is limited as a matter of law to certain enterprises, i.e.,
FIEs designated as HNTEs, and, hence, is specific under section
771(5A)(D)(i) of the Act. The program is also specific pursuant to
section 771(5A)(D)(iv) of the Act, 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. Guang Ya
and Guangcheng reported receiving tax benefits attributable to the POI
under this program.
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 rate Guang Ya and Guangcheng
would have paid in the absence of the program (25 percent) with the
rate the company paid (15 percent), and divided the tax savings
received during the POI by the combined total sales of Guang Ya and
Guangcheng.
On this basis, we determine the countervailable subsidy
attributable to Guang Ya Companies to be 0.11 percent ad valorem under
this program.
G. Policy Loans to Chinese Aluminum Extrusion Producers
The Department is examining whether aluminum extrusion producers
receive preferential lending through SOCBs or policy banks. According
to the allegation, preferential lending to the aluminum extrusion
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. Based on our review of the responses and documents
provided by the GOC, we preliminarily determine that loans received by
the aluminum extrusion industry from SOCBs and policy banks were made
pursuant to government directives.
Record evidence demonstrates that the GOC, through its directives,
has highlighted and advocated the development of the aluminum extrusion
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
specific products selected for development. For example, the
``Catalogue of Major Industries, Products, and Technologies Encouraged
for Development in China'' (Encouraged Industries Catalogue), issued by
the GOC in 2000, identifies 526 products, technologies, and
infrastructure facilities for business promotion. See the GOC's August
4, 2010, questionnaire response at Exhibit 3. The Encouraged Industries
Catalogue specifically mentions aluminum extrusion products under the
non-ferrous metals heading. Id.
Similarly, there is the Decision of the State Council on
Promulgating the ``Interim Provisions on Promoting Industrial Structure
Adjustment'' for Implementation (No. 40 (2005)) (Decision 40). The GOC
implemented Decision 40 in order to achieve the objectives of the
Eleventh Five-Year Plan. See the GOC's August 4, 2010, questionnaire
response at Exhibit 6. 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. Id. Aluminum is mentioned
as an industry in the Industrial Catalogue as an ``encouraged
project.'' Id. For the ``encouraged'' projects, Decision 40 outlines
several support options available from the government, including
financing. Id.
In addition, the ``Guidelines on Acceleration of the Adjustment of
the Aluminum Industry Structure'' (Aluminum Industry Guidelines),
issued by the GOC in 2006, discusses support that is to be provided to
producers of aluminum extrusions. See the GOC's August 4, 2010,
questionnaire response at Exhibit 9. For instance, under the heading
``Increase Industry Concentration, Encourage Comprehensive Usage and
Conservation of Resources,'' the Aluminum Industry Guidelines state:
Create favorable conditions for enterprises M&A and
restructuring, and accelerate enterprises' merger and restructuring
via economic means. Support aluminum, electrolytic aluminum, and
aluminum processing enterprises to undertake merger and
restructuring, establish internationally competitive enterprise
group, realize advantage complementation, and increase industry
concentration. Encourage private capital and foreign capital to
participate in the reform, restructuring and transformation of
state-owned enterprises. Encourage backbone enterprises to keep
raising technology and management levels, accelerate medium and
small-sized aluminum processing enterprises' technology
transformation, and improve resource utilization.
Id. The Aluminum Industry Guidelines also make reference to lending
activities. Under the heading, ``Strengthen the Coordination and
Cooperation of Credit Policy and Industrial Policy and Establish
Withdrawal Mechanism Under the
[[Page 54313]]
Policies,'' the Aluminum Industry Guidelines state:
It is required to strictly abide by the rule that the minimum
self-owned capital requirement for electrolytic aluminum projects
shall be no less than 35 percent of the total investment. Financial
institutions shall rationally allocate the lending credits taking
into account the national macroeconomic adjustments, industrial
policies, and ordinary lending principles. Financial institutions
may continue to provide credits to oxide aluminum or electrolytic
aluminum enterprises that are in compliance with national industrial
policies and the market entrance threshold, provided such lending is
in accordance with the ordinary lending principles. No credit shall
be provided to those enterprises that do not conform to national
industrial policies, do not satisfy the market entrance threshold,
have obsolete manufacturing processes, have been classified as
prohibited, or have been ordered to cease operation. In the event
that credits are mistakenly provided to such enterprises, the
financial institutions shall take appropriate measures to reclaim
the credits and avoid financial risk.
Id. (emphasis added). Additionally, under the heading ``Enhance the
Implementation of Environmental Protection Regulations, Eliminate
Capacities,'' the Aluminum Industry Guidelines state that different
``financing means'' shall be used ``to support enterprises'
environmental protection and energy savings.'' Id.
Support, in the form of financing, is also discussed in the
``Nonferrous Metal Industry Adjustment and Revitalization Plan''
(Nonferrous Metal Plan) that was issued by the GOC in 2009. See the
GOC's August 4, 2010, questionnaire response at Exhibit 10. Under the
heading ``Increase Dedication to Technology Improvement and Technology
Reform,'' the Nonferrous Metal Plan states:
Set aside some funds from new central investment. Use loan
interest subsidies to support R&D and technology reform in the
nonferrous metals industry. Increase the level of financial support
directed toward reform of energy conservation technologies.
The Nonferrous Metal Plan further references financing to the aluminum
extrusions industry under the heading, ``Continue To Implement the
Financing Policy of `Encouragement and Discouragement: ''
Increase financing support to backbone enterprises in the
nonferrous metals industry. Provide support to certain enterprises
in issuing stock, enterprise bonds, and corporate bonds. Enterprises
eligible to receive such support are those which are engaged in
projects which, in addition to adhering to investment management
prescriptions, are in compliance with industry policy as well as
relevant environmental and land regulations; and implement
acquisitions, restructuring, ``Going Abroad'' {sic{time} and
technological reformation.
Id. (emphasis added).
As noted in Citric Acid from the PRC, 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. See Citric Acid from the PRC
Decision Memorandum at Comment 5. Where such plans or policy directives
exist, then it is the Department's practice to determine that a policy
lending program exists that is specific to the named industry (or
producers that fall under that industry). See CFS Decision Memorandum
at Comment 8, and LWTP from the PRC Decision Memorandum at ``Government
Policy Lending Program.'' Once that finding is made, the Department
relies upon the analysis undertaken in CFS from the PRC to further
conclude that national and local government control over the SOCBs
results in the loans being a financial contribution by the GOC. See CFS
Decision Memorandum at Comment 8. 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 the production of
aluminum extrusions through policy lending.
The GOC and the Guang Ya Companies provided source documents
concerning the largest loans the Guang Ya Companies had outstanding
during the POI.\7\ Information in these business proprietary documents
further supports our preliminary determination that the GOC has a
policy in place to encourage the development of the production of
aluminum extrusions through policy lending. For further information,
see the Memorandum to the File from Eric B. Greynolds, Program Manager,
Office 3, Operations, ``Excerpts of Internal Loan Documents of the
Guang Ya Companies,'' (August 30, 2010) (Internal Loan Document
Memorandum).
---------------------------------------------------------------------------
\7\ The Zhongya Companies reported that they did not have any
loans outstanding during the POI.
---------------------------------------------------------------------------
The GOC has argued in its August 4, 2010, questionnaire response
that the People's Bank of China (PBOC) revoked the PRC's policy lending
programs in 1999 pursuant to the ``Circular on Improving Administration
of Special Loans'' (YINFA (1999)) No. 228 (Special Loans Circular). See
the GOC's August 4, 2010, questionnaire response at Exhibit 18. We
preliminarily determine that there is no basis to conclude that the
GOC's policy lending activities ceased with the issuance of the Special
Loans Circular. The Special Loans Circular states that, while banks
shall make lending decisions on their own, ``authorities'' may continue
to ``give advice on the choice of project.'' Further, the Special Loans
Circular states that firms may continue to receive formerly designated
``special loans:''
For those (former special) loans which do not meet the
commercial lending conditions, if the authorities can provide loan
interest grant or other subsidies so that the commercial lending
conditions are fulfilled, the banks may continue to provide the
loans.
Id. The Special Loans Circular goes on to state that:
Wholly State-owned banks shall make efforts to implement the
requirements above, and shall actively communicate with the
authorities in charge of relevant industries, with a view to gaining
their understanding and support.
Id. Thus, despite the GOC's claims, the Special Loans Circular provides
a means by which what it refers to as ``special loans'' may continue to
be provided to firms in the PRC. In addition, the Special Loans
Circular states government authorities will continue to ``advise'' and
monitor the actions of the PRC state-owned lending institutions.
Furthermore, the Aluminum Industries Guidelines and the Nonferrous
Metal Plan, both of which mention directing credit to members of the
aluminum extrusions industry, as well as the loans discussed in the
Internal Loan Document Memorandum, were issued after the GOC released
the Special Loans Circular.
The Guang Ya Companies reported that they had outstanding loans
from PRC-based banks during the POI. Consistent with our determination
in prior proceedings, we preliminarily find these PRC-based banks to be
state-owned commercial banks (SOCBs). See, e.g., Certain Oil Country
Tubular Goods From the People's Republic of China: Final Affirmative
Countervailing Duty Determination, Final Negative Critical
Circumstances Determination, 74 FR 64045 (December 7, 2009) (OCTG from
the PRC), and accompanying Issues and Decision Memorandum (OCTG
Decision Memorandum) at Comment 20.
We preliminarily determine that the loans to aluminum extrusion
producers from 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)(ii) of the
Act). We further preliminarily determine that the loans are de jure
specific within the
[[Page 54314]]
meaning of section 771(5A)(D)(i) of the Act because of the GOC's
policy, as illustrated in the government plans and directives, to
encourage and support the growth and development of the aluminum
extrusions industry.
To determine whether a benefit is conferred under section
771(5)(E)(ii) of the Act, we compared the amount of interest the Guang
Ya Companies paid on their outstanding loans to the amount they would
have paid on comparable commercial loans. See 19 CFR 351.505(a). In
conducting this comparison, we used the interest rates described in the
``Benchmarks and Discount Rates'' section above. We have attributed
benefits under this program to the combined total sales of Guang Ya and
Guangcheng.
On this basis, we preliminarily determine a countervailable subsidy
of 2.11 percent ad valorem for the Guang Ya Companies.
H. Fund for SME Bank-Enterprise Cooperation Projects
According to the GOC, 1,000 eligible SMEs along with several
financial institutions were selected to participate in the program.
Under the program, financial institutions in the PRC decide whether to
extend credit to certain eligible SMEs. If they decide to do so, the
Provincial Government of Guangdong (PGOG) provides loan interest
assistance to the SME that received the financing from the financial
institution. The program is administered by the PGOG's Department of
Finance and the Bureau of SMEs pursuant to the Circular on Printing and
Distributing of the Measures on Implementing the 2009 Government-Bank-
Enterprise Cooperation Special Fund Program (YUECAIGONG (2009) No. 54)
(Bank Enterprise Cooperation Measures). See the GOC's August 9, 2010
supplemental questionnaire response at Supp-1. The Guang Ya Companies
reported that Guang Ya received a grant under this program during the
POI.
We preliminarily determine that the grants issued by the GOC under
this program constitute a financial contribution under section
771(5)(D)(i) of the Act, in the form of a direct transfer of funds, and
a benefit under section 771(5)(E) of the Act.
According to the Bank Enterprise Cooperation Measures, the 500 SMEs
deemed as having the ``greatest potential'' as well as enterprises that
manufacture key equipment, or pursue creative technologies, or engage
in advanced manufacturing activities backed by both the PGOG and the
corresponding city will receive preferential treatment under the
program. In light of the selection process described in the Bank
Enterprise Cooperation Measures, we preliminarily determine that this
program is de jure specific under section 771(5)(D)(i) of the Act
because the measures expressly limit access to certain enterprises.
To calculate the benefit, we divided the amount of the grant by the
total sales of Guang Ya and Guangcheng. The grant was less than 0.5
percent of the export sales of Guang Ya and Guangcheng in the year of
approval/receipt. Therefore, pursuant to 19 CFR 351.524(b)(2), we
expensed the grant amount to the POI (year of receipt).
On this basis, we calculated a total net subsidy rate of 0.05
percent ad valorem for the Guang Ya Companies.
I. Special Fund for Significant Science and Technology in Guangdong
Province
Under this program, the PGOG seeks to support major, generic, and
key technology research and development of Guangdong industries and
promote technology achievements and diffusion of technological
knowledge. The program is administered by the Guangdong Science and
Technology Department pursuant to the Provisional Measures on
Administration of Guangdong Important Science-Technology Project
Special Fund (YEUCAIGONG (2009) No. 166). The Guang Ya Companies
reported that Guang Ya received a grant under this program during the
POI.
We preliminarily determine that the grants issued by the GOC under
this program constitute a financial contribution under section
771(5)(D)(i) of the Act, in the form of a direct transfer of funds, and
a benefit under section 771(5)(E) of the Act. As explained in the
``Various Grant Programs Self-Reported by the Guang Ya Companies''
section, the GOC failed to provide benefit distribution data for this
program. As a result, the Department is applying AFA and assuming that
the program is specific under section 771(5A)(D)(iii) of the Act.
To calculate the benefit, we divided the amount of the grant by the
total sales of Guang Ya and Guangcheng in the year of approval/receipt.
The grant was less than 0.5 percent of the total sales of Guang Ya and
Guangcheng. Therefore, pursuant to 19 CFR 351.524(b)(2), we expensed
the grant amount to the POI (year of receipt).
On this basis, we calculated a total net subsidy rate of 0.12
percent ad valorem for the Guang Ya Companies.
J. Fund for Economic, Scientific, and Technology Development
Under this program, the Government of Foshan City distributes
grants to firms with the aim of fostering technological and economic
development. The program is administered by the Science and Technology
Bureau of Foshan Municipality and the Finance Bureau of Foshan
Municipality pursuant to the Circular on Printing and Distributing of
the Measures on Administration of Foshan Sci-Tech Development Special
Fund (FOFUBAN (2008) No. 402). See the GOC's August 9, 2010,
supplemental questionnaire at Supp-4. The Guang Ya Companies, which are
located in Foshan City, reported that Guang Ya received a grant under
this program during the POI.
We preliminarily determine that the grants issued by the GOC under
this program constitute a financial contribution under section
771(5)(D)(i) of the Act and a benefit under section 771(5)(E) of the
Act. As explained in the ``Various Grant Programs Self-Reported by the
Guang Ya Companies'' section, the GOC failed to provide benefit
distribution data for this program. As a result, the Department is
applying AFA and assuming that the program is specific under section
771(5A)(D)(iii) of the Act.
To calculate the benefit, we divided the amount of the grant by the
total sales of Guang Ya and Guangcheng in the year of approval/receipt.
The grant was less than 0.5 percent of the total sales of Guang Ya and
Guangcheng. Therefore, pursuant to 19 CFR 351.524(b)(2), we expensed
the grant amount to the POI (year of receipt).
On this basis, we calculated a total net subsidy rate of 0.01
percent ad valorem for the Guang Ya Companies.
K. Provincial Fund for Fiscal and Technological Innovation
Under this program, the PGOG provides grants to firms for the
purpose of promoting technological and fiscal innovation. The program
is administered by the Provincial Department of Finance and Economic
and Trade Commission of Guangdong Province pursuant to the Provisional
Measures on Administration of Exploration and Renovation Provincial
Level Fund (YUECAIQI (2003) No. 140). See the GOC's August 9, 2010,
supplemental questionnaire at Supp-1. The Guang Ya Companies reported
that Guangcheng received a grant under this program during the POI.
We preliminarily determine that the grants issued by the GOC under
this
[[Page 54315]]
program constitute a financial contribution under section 771(5)(D)(i)
of the Act and a benefit under section 771(5)(E) of the Act. As
explained in the ``Various Grant Programs Self-Reported by the Guang Ya
Companies'' section, the GOC failed to provide benefit distribution
data for this program. As a result, the Department is applying AFA and
assuming that the program is specific under section 771(5A)(D)(iii) of
the Act.
To calculate the benefit, we divided the amount of the grant by the
total sales of Guang Ya and Guangcheng in the year of approval/receipt.
The grant was less than 0.5 percent of the total sales of Guang Ya and
Guangcheng. Therefore, pursuant to 19 CFR 351.524(b)(2), we expensed
the grant amount to the POI (year of receipt).
On this basis, we calculated a total net subsidy rate of 0.04
percent ad valorem for the Guang Ya Companies.
L. Provincial Loan Discount Special Fund for SMEs
Under this program, the PGOG provides interest subsidy grants in
order to promote and support SMEs. The program is administered by the
Provincial Department of Finance and the Guangdong Provincial SME
Bureau pursuant to the Measures on Administration of SME Loan Interest
Assistance Special Fund (YUECAIGONG (2009) No. 124). See the GOC's
August 9, 2010 supplemental questionnaire at Supp-9. The Guang Ya
Companies reported that Guangcheng received a grant under this program
during the POI.
We preliminarily determine that the grants issued by the GOC under
this program constitute a financial contribution under section
771(5)(D)(i) of the Act and a benefit under section 771(5)(E) of the
Act. As explained in the ``Various Grant Programs Self-Reported by the
Guang Ya Companies'' section, the GOC failed to provide benefit
distribution data for this program. As a result, the Department is
applying AFA and assuming that the program is specific under section
771(5A)(D)(iii) of the Act.
To calculate the benefit, we divided the amount of the grant by the
total sales of Guang Ya and Guangcheng. The grant was less than 0.5
percent of the total sales of Guang Ya and Guangcheng in the year of
approval/receipt. Therefore, pursuant to 19 CFR 351.524(b)(2), we
expensed the grant amount to the POI (year of receipt).
On this basis, we calculated a total net subsidy rate of 0.04
percent ad valorem for the Guang Ya Companies.
M. Export Rebate for Mechanic, Electronic, and High-Tech Products
The Guang Ya Companies reported that Guangcheng received a grant
under this program during the POI. See the Guang Ya Companies' July 8,
2010 initial questionnaire response at 60. The Department sent two
questionnaires to the GOC concerning this program. In its responses,
the GOC indicated that it could not find any ``meaningful information''
concerning the program. See, e.g., the GOC's August 18, 2010 second
supplemental questionnaire at 1.
We preliminarily determine that the grants issued by the GOC under
this program constitute a financial contribution under section
771(5)(D)(i) of the Act and a benefit under section 771(5)(E) of the
Act. Concerning specificity, we are resorting to the use of FA within
the meaning of section 776(a)(1) of the Act because the necessary
information concerning the manner in which this program is administered
is not on the record. Based on the information contained in the July 8,
2010 questionnaire response of the Guang Ya Companies indicating that
it received the grant in the form of an ``export rebate,'' we are
relying upon FA and preliminarily determine that the program is
contingent upon exports and therefore specific under section 771(5A)(B)
of the Act.
To calculate the benefit, we divided the amount of the grant by the
total export sales of Guang Ya and Guangcheng in the year of approval/
receipt. The grant was less than 0.5 percent of the total export sales
of Guang Ya and Guangcheng. Therefore, pursuant to 19 CFR
351.524(b)(2), we expensed the grant amount to the POI (year of
receipt).
On this basis, we calculated a total net subsidy rate of 0.02
percent ad valorem for the Guang Ya Companies.
N. PGOG Special Fund for Energy Saving Technology Reform
Under this program, the PGOG provides grants in the amount of RMB
200 for every one MT of standard coal saved through increased energy
efficiency during a given year. Firms must demonstrate annual energy
savings equivalent to 2,000 MT of standard coal in order to be eligible
to apply for grants under the program. The program is administered by
the PGOG's Department of Finance and the Economic Trade Commission of
Guangdong pursuant to the ``Provisional Measures on Administration of
Guangdong Energy-Saving Special Fund (YUECAIGONG) (2008) No. 126. See
the GOC's August 4, 2010, initial questionnaire at Exhibit 46. The
Guang Ya Companies reported that Guangcheng received a grant under this
program during the POI.
We preliminarily determine that the grant issued by the GOC under
this program constitute a financial contribution under section
771(5)(D)(i) of the Act and a benefit under section 771(5)(E) of the
Act. As explained in the ``Various Grant Programs Self-Reported by the
Guang Ya Companies'' section, the GOC failed to provide adequate
benefit distribution data for this program. In its initial
questionnaire, the GOC provided the amount of grants received by all
firms (including Guangcheng) during the POI. It also provided for the
POI the amount of grants received by aluminum extrusions producers as
well as the total amount of grants issued under the program. However,
the GOC did not provide, as requested by the Department, the amounts
disbursed to other industries during the POI. In addition, the GOC did
not provide, as requested by the Department, information concerning the
distribution of benefits provided to firms and industry groups in the
three years preceding the POI. See the GOC's August 4, 2010, initial
questionnaire at 104-111 and Exhibit 46. Further, the GOC did not
provide the requested information concerning the distribution of
benefits in its second supplemental questionnaire response. See the
GOC's August 19, 2010, second supplemental questionnaire at 1. As a
result, the Department is applying AFA and assuming that the program is
specific under section 771(5A)(D)(iii) of the Act.
To calculate the benefit, we divided the amount of the grant by the
total sales of Guang Ya and Guangcheng in the year of approval/receipt.
The grant was less than 0.5 percent of the total sales of Guang Ya and
Guangcheng. Therefore, pursuant to 19 CFR 351.524(b)(2), we expensed
the grant amount to the POI (year of receipt).
On this basis, we calculated a total net subsidy rate of 0.06
percent ad valorem for the Guang Ya Companies.
O. PGOG Science and Technology Bureau Project Fund (Also Referred to as
Guangdong Industry, Research, University Cooperating Fund)
Under this program, the PGOG distributes grants to universities and
firms to support, among other things, industrial development and
innovation in the province. The program is administered by the PGOG's
Department of Finance and Department of Science and Technology. See the
GOC's August 9, 2010, first supplemental questionnaire response at 41-
50 and Exhibit Supp-5. The Guang Ya
[[Page 54316]]
Companies reported that Guang Ya received a grant under this program
during the POI.
We preliminarily determine that the grant issued by the GOC under
this program constitutes a financial contribution under section
771(5)(D)(i) of the Act and a benefit under section 771(5)(E) of the
Act. As explained in the ``Various Grant Programs Self-Reported by the
Guang Ya Companies'' section, the GOC failed to provide benefit
distribution data for this program. As a result, the Department is
applying AFA and assuming that the program is specific under section
771(5A)(D)(iii) of the Act.
To calculate the benefit, we divided the amount of the grant by the
total sales of Guang Ya and Guangcheng in the year of approval/receipt.
The grant was less than 0.5 percent of the total sales of Guang Ya and
Guangcheng. Therefore, pursuant to 19 CFR 351.524(b)(2), we expensed
the grant amount to the POI (year of receipt).
On this basis, we calculated a total net subsidy rate of 0.03
percent ad valorem for the Guang Ya Companies.
P. PGOG Tax Offsets Grants for Research and Development (R&D)
Under this program, for R&D expenses incurred for developing new
products and technologies that cannot be treated as intangible assets,
50 percent of the R&D expense shall be deducted as a tax offset. For
R&D expenses considered intangible assets, the tax offset shall be
amortized based on 150 percent of the R&D expenses. The program is
administered by the PGOG's Science and Technology Department and the
Economic Trade Commission pursuant to the ``Trial Administrative
Measures for the Pre-Tax Deduction of Enterprises R&D Expenses'' (R&D
Measures). See the Guang Ya Companies' July 8, 2010, questionnaire
response at Exhibit 23. Article 5 of the R&D Measures states that
eligible R&D projects:
shall be in line with national and Guangdong provincial
technological policies and industrial policies. Any projects
belonging to producer projects, technological projects, or process
projects eliminated or restricted by the central or Guangdong
provincial government shall not enjoy the policy of additional
calculation of R&D expenses.
Id. The Guang Ya Companies reported that Guangcheng received a grant
under this program during the POI.
We preliminarily determine that the grant issued by the GOC under
this program constitutes a financial contribution under section
771(5)(D)(i) of the Act and a benefit under section 771(5)(E) of the
Act. Concerning specificity, as noted above in the ``Policy Loans to
Chinese Aluminum Extrusion Producers'' section, we have preliminarily
determined that the GOC and the PGOG have targeted the aluminum
extrusions industry for development and assistance in a manner that is
specific under section 771(5A)(D)(i) of the Act, as illustrated in the
government plans and directives, to encourage and support the growth
and development of the aluminum extrusions industry. Given this
preliminary finding and in light of the language in Article 5 of the
R&D Measures, we preliminarily determine that the grants provided under
this program are de jure specific within the meaning of section
771(5A)(D)(i) of the Act.
To calculate the benefit, we divided the amount of the grant by the
total sales of Guang Ya and Guangcheng in the year of approval/receipt.
The grant was less than 0.5 percent of the total sales of Guang Ya and
Guangcheng. Therefore, pursuant to 19 CFR 351.524(b)(2), we expensed
the grant amount to the POI (year of receipt).
On this basis, we calculated a total net subsidy rate of 0.04
percent ad valorem for the Guang Ya Companies.
Q. Refund of Land-Use Tax for Firms Located in the Zhaoqing New and
High-Tech Industrial Development Zone (ZHTDZ)
The Zhongya Companies reported that New Zhongya received a refund
during the POI of land-use taxes paid to the ZHTDZ local authority in
2007. According to the Zhongya Companies, the ZHTDZ local authority
reduced its land-use tax rate from 5 RMB per square meter to 2 RMB per
square meter. The Zhongya Companies state that receipt of the land-use
tax refund was contingent upon New Zhongya's location in the ZHTDZ. See
the Zhongya Companies August 6, 2010, supplemental questionnaire
response at 27. The Zhongya Companies reported that New Zhongya
recorded the tax refund in its ``subsidy income'' ledger. Id.
We preliminarily determine that the land-use tax refund received by
the Zhongya Companies constitutes a financial contribution, in the form
of revenue foregone, and a benefit, equal to the amount of the refund,
as described under sections 771(5)(D)(ii) and 771(5)(E) of the Act.
Because the tax refund is limited to firms located in the ZHTDZ, we
preliminarily determine that the program is regionally-specific under
section 771(5A)(D)(iv) of the Act.
To calculate the benefit, we divided the amount of the land-use tax
received during the POI by the Zhongya Companies' total sales. On this
basis, we calculated a total net subsidy rate of 0.13 percent ad
valorem for the Zhongya Companies.
R. Development Assistance Grants From the ZHTDZ Local Authority
The Zhongya Companies reported that New Zhongya received a one-time
development assistance grant from the ZHTDZ local authority during the
POI. According to the Zhongya Companies, in determining eligibility,
the ZHTDZ local authority examines firms' output, tax payments, the
level of foreign investment, and whether the firms' have received
famous brand designation. See the Zhongya Companies' August 6, 2010,
supplemental questionnaire response at 17.
We preliminarily determine that the grant issued by the GOC under
this program constitutes a financial contribution under section
771(5)(D)(i) of the Act and a benefit under section 771(5)(E) of the
Act. Concerning specificity, as explained above in the ``GOC and Sub-
Central Government Grants, Loans, and Other Incentives for Development
of Famous Brands and China World Top Brands'' section, we have
preliminarily determined that the Famous Brand program is contingent
upon export activity and, thus, is specific under section 771(5A)(B) of
the Act. The Zhongya Companies indicate that famous brand designation
is among the factors considered when determining eligibility under this
program. Section 771(5A)(B) of the Act states that a program shall be
deemed an export subsidy if receipt of the subsidy is contingent upon
export performance, alone or as one of two or more conditions.
Accordingly, because famous brand designation is among the factors the
ZHTDZ local authority considers when determining eligibility and
because the famous brand designation is contingent upon export
activity, we preliminarily determine that the program is specific under
section 771(5A)(B) of the Act. Our interpretation of section 771(5A)(B)
of the Act in this regard is consistent with the Department's practice.
See, e.g., PC Strand from the PRC Decision Memorandum at ``Subsidies
for Development of Famous Export Brands and China World Top Brands at
Central and Sub-Central Level.''
To calculate the benefit, we divided the amount of the grant by the
total export sales of the Zhongya Companies in the year of approval/
receipt. The grant was less than 0.5 percent of the export sales of the
Zhongya Companies. Therefore, pursuant to 19 CFR
[[Page 54317]]
351.524(b)(2), we expensed the grant amount to the POI (year of
receipt).
On this basis, we calculated a total net subsidy rate of 0.13
percent ad valorem for the Zhongya Companies.
S. Provision of Primary Aluminum for LTAR
The Department is investigating whether producers and suppliers,
acting as Chinese government authorities, sold primary aluminum to the
Guang Ya and Zhongya Companies for LTAR. The Guang Ya and Zhongya
Companies reported obtaining primary aluminum during the POI from
trading companies as well as directly from primary aluminum producers.
In the case of the Zhongya Companies, they were able to identify all of
the firms that produced the primary aluminum that the Zhongya Companies
purchased during the POI. Concerning the Guang Ya Companies, in some
instances they were not able to identify the producers of the primary
aluminum that the Guang Ya Companies purchased during the POI.
In Tires from the PRC, the Department determined that majority
government ownership of an input producer is sufficient to qualify it
as an ``authority.'' See Tires from the PRC Decision Memorandum at
``Government Provision of Rubber for Less than Adequate Remuneration.''
Based on the record in the instant investigation, we determine that
primary aluminum producers, which supplied respondents, and that are
majority-government owned are ``authorities.'' As a result, we
determine that primary aluminum supplied by companies deemed to be
government authorities constitute(s) a financial contribution in the
form of a governmental provision of a good and that the respondents
received a benefit to the extent that the price they paid for primary
aluminum produced by these suppliers was for LTAR. See sections
771(5)(D)(iv) and 771(5)(E)(iv) of the Act. We will follow-up with the
GOC to determine whether suppliers that have less than majority
government ownership should also be determined to be ``authorities''
under our CVD regulations.
In prior CVD proceedings involving the PRC, the Department has
determined that when a respondent purchases an input from a trading
company or non-producing supplier, a subsidy is conferred if the
producer of the input is an ``authority'' within the meaning of section
771(5)(B) of the Act and the price paid by the respondent for the input
was sold for LTAR. See CWP from the PRC Decision Memorandum at ``Hot-
Rolled Steel for Less Than Adequate Remuneration;'' Racks from the PRC
Decision Memorandum at ``Provision of Wire Rod for Less than Adequate
Remuneration;'' and CWASPP from the PRC Decision Memorandum at
``Provision of SSC for LTAR.'' Therefore, in our initial questionnaire,
we requested that the respondent companies and the GOC together
identify the producers from whom the trading companies acquired the
primary aluminum that was subsequently sold to respondents during the
POI and to provide information that would allow the Department to
determine whether those producers were government authorities.
The Zhongya Companies were able to identify the entities that
produced the primary aluminum that they acquired during the POI.
Regarding the Guang Ya Companies, for certain purchases, they were able
to identify the producers. However, for several other purchases,
although they identified their primary aluminum suppliers and indicated
whether the suppliers were trading companies in the business of
reselling primary aluminum, the Guang Ya Companies did not identify the
producers that supplied the trading companies. For purposes of this
preliminary determination, where available, we are relying on the
information supplied by the GOC and by the Guang Ya and Zhongya
Companies when determining whether the suppliers identified in the
firms' questionnaires responses are government authorities. We will
follow-up with the Guang Ya Companies with respect to the identity of
the producers that supplied the trading companies.
Because the Guang Ya Companies have not been able to supply the
requested information, we find that the necessary information is not on
the record and, as a result, we are resorting to the use of facts
available (FA) within the meaning of sections 776(a)(1) and (2) of the
Act. In its response, the GOC provided information on the amount of
primary aluminum produced by state-owned enterprises (SOEs) and private
producers in the PRC. Using these data, we derived the ratio of primary
aluminum produced by SOEs during the POI. Thus, pursuant to sections
776(a)(1) and (2) of the Act, we have resorted to the use of FA with
regard to the primary aluminum sold to the Guang Ya Companies by
certain domestic trading companies. Specifically, we assumed that the
percentage of primary aluminum supplied by these domestic trading
companies that is produced by government authorities is equal to the
ratio of primary aluminum produced by SOEs during the POI.\8\ Regarding
this ratio, we note that the GOC classified the CHALCO Aluminum
Corporation of China (CHALCO) as a privately-owned primary aluminum
producer. However, based on publicly available information, we are
treating CHALCO as a GOC authority. See the Memorandum to the File,
``Factual Information Placed On Record Regarding the Ownership of a
Primary Aluminum Producer,'' (August 16, 2010) (CHALCO Memorandum), a
public document on file in room 1117 of the CRU. Our use of FA in this
regard is consistent with the Department's practice. See, e.g., CWP
from the PRC Decision Memorandum at ``Hot-Rolled Steel for Less Than
Adequate Remuneration;'' see also LWRP from the PRC Decision Memorandum
at ``Hot-Rolled Steel for Less Than Adequate Remuneration.'' The
Department will continue to examining the identities of the firms that
produced the primary aluminum that was purchased by the Guang Ya
Companies during the POI and will continue to investigate whether the
firms that produced the primary aluminum for both the Guang Ya and the
Zhongya Companies operated as government authorities.
---------------------------------------------------------------------------
\8\ In other words, in instances where we are applying FA, we
are assuming that the percentage of primary aluminum purchased by
domestic trading companies during the POI was equal to the ratio of
primary aluminum produced by SOEs during the POI, as indicated by
the aggregate data supplied in the questionnaire responses of the
GOC.
---------------------------------------------------------------------------
Having addressed the issue of financial contribution, we must next
analyze whether the sale of primary aluminum to the mandatory
respondents by suppliers designated as government authorities conferred
a benefit within the meaning of section 771(5)(E)(iv) of the Act. The
Department's regulations at 19 CFR 351.511(a)(2) set forth the basis
for identifying appropriate market-determined benchmarks for measuring
the adequacy of remuneration for government-provided goods or services.
These potential benchmarks are listed in hierarchical order by
preference: (1) Market prices from actual transactions within the
country under investigation (e.g., actual sales, actual imports or
competitively run government auctions) (tier one); (2) world market
prices that would be available to purchasers in the country under
investigation (tier two); or (3) an assessment of whether the
government price is consistent with market principles (tier three). 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
[[Page 54318]]
such prices generally would be expected to reflect most closely the
prevailing market conditions of the purchaser under investigation. See
Softwood Lumber from Canada Decision Memorandum at ``Market-Based
Benchmark'' section.
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 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 Preamble to Countervailing Duty Regulations, 63 FR 65377, (November
25, 1998) (Preamble). The Preamble further recognizes that distortion
can occur when the government provider constitutes a majority or, in
certain circumstances, a substantial portion of the market. Id.
In the instant investigation, the GOC reported the total primary
aluminum production by SOEs during the POI. The share of production
number of these SOEs, after adjustment by the Department, accounted for
more than 50 percent of the PRC's production. See Memorandum to the
File from Eric B. Greynolds, Program Manager, ``Share of Primary
Aluminum Production During Period of Investigation,'' (August 30,
2010). We find this majority share by SOEs makes it reasonable to
conclude that actual transaction prices are significantly distorted as
a result of the government's involvement in the market. See Preamble,
63 FR at 65337. Our finding in this regard is in accordance with the
Department's practice. See, e.g., Wire Decking from the PRC Decision
Memorandum at ``Provision of Zinc for LTAR.'' In addition, as further
evidence of the government's predominant role in the market, we note
that GOC has imposed export tariffs on two of the three HTS categories
that cover primary aluminum. Such export restraints can discourage
exports and increase the supply of primary aluminum in the domestic
market, with the result that domestic prices are lower than they would
be otherwise. See, e.g., Racks from the PRC Decision Memorandum at 15.
For this reason, we preliminarily determine that domestic prices
charged by privately-owned primary aluminum producers based in the PRC
may not serve as viable, tier one benchmark prices.
The Department has on the record primary aluminum prices, as
published by the London Metals Exchange (LME). We find that these
prices may serve as a tier-two benchmark, as described under 19 CFR
351.511(a)(2)(ii), when determining whether the Zhongya Companies
received a benefit on its purchases of primary aluminum from government
authorities. Concerning the LME prices, we note that the Department has
relied on pricing data from industry publications in prior CVD
proceedings involving the PRC. See, e.g., CWP from the PRC Decision
Memorandum at ``Hot-Rolled Steel for Less Than Adequate Remuneration''
section; see also LWRP from the PRC Decision Memorandum at ``Hot-Rolled
Steel for Less Than Adequate Remuneration'' section. For purposes of
the preliminary determination, we find prices from the LME to be
sufficiently reliable and representative for use in the benchmark
calculation.
The Zhongya and Guang Ya Companies reported that they imported
primary aluminum. In past cases, the Department has incorporated prices
on company-specific imports into the LTAR benchmark provided that the
Department's analysis indicates that the company-specific import prices
are not distorted by the dominance of government production in the PRC.
See, e.g., Circular Welded Austenitic Stainless Pressure Pipe from the
People's Republic of China: Final Affirmative Countervailing Duty
Determination, (74 FR 4936) January 28, 2009, (CWASPP from the PRC),
and accompanying Issues and Decision Memorandum (CWASPP from the PRC
Decision Memorandum) at ``Provision of SSC for LTAR;'' see also CWP
from the PRC Decision Memorandum at Comment 7.
However, upon further examination, we preliminarily determine that
when the Department has determined that it is reasonable to conclude
that actual transaction prices are significantly distorted as a result
of the government's involvement in the market, it is not appropriate to
utilize company-specific prices as a tier-one benchmark. This is
consistent with the language of the Preamble. We preliminarily
determine that it is reasonable to conclude that the prices of goods
that are imported into the domestic market are also significantly
distorted as a result of the government's involvement in the market.
To determine whether primary aluminum suppliers, acting as
government authorities, sold primary aluminum to respondents for LTAR,
we compared the prices the respondents paid to the suppliers to our
primary aluminum benchmark price. We conducted our comparison on a
monthly basis. When conducting the price comparison, we converted the
benchmark to the same currency and unit of measure as reported by the
mandatory respondents for their purchases of primary aluminum.
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. Accordingly, in deriving the benchmark prices, we ensured that
ocean freight and inland freight were included. Specifically, we
included ocean freight pricing data from the Maersk shipping company
pertaining to shipments of aluminum, articles of aluminum, and metal
products from the port of Busan, South Korea, to Hong Kong. See
petitioners' August 20, 2010, submission at Exhibit 4. We used this
information because it was the only information on the record for ocean
freight. Concerning inland freight, we calculated company-specific
inland freight rates using cost data supplied by the Guang Ya and
Zhongya Companies. Further, we added to the benchmark import duties and
the VAT applicable to imports of primary aluminum into the PRC as
reported by the GOC. In deriving the benchmark we did not include
marine insurance. In prior CVD investigations involving the PRC, the
Department has found that while the PRC customs authorities impute an
insurance cost on certain imports for purposes of levying duties and
compiling statistical data, there is no evidence to suggest that PRC
customs authorities require importers to pay insurance charges. See,
e.g., PC Strand from the PRC Decision Memorandum at Comment 13.
Further, we have not added separate brokerage, handling, and
documentation fees to the benchmark because we find that such costs are
already reflected in the ocean freight cost from Maersk that is being
used in this preliminary determination. See petitioners' August 20,
2010, submission at Exhibit 4.
Regarding the primary aluminum prices that respondents paid to
government authorities, both the Zhongya and Guang Ya Companies
reported their prices to the Department inclusive of inland freight and
indicated the domestic VAT applied to their purchases. Accordingly,
when performing our comparison, we included the domestic VAT paid on
purchases from government authorities. In this manner, we find the
Department
[[Page 54319]]
has conducted the comparison on an apples-to-apples basis.
Comparing the benchmark unit prices to the unit prices paid by
respondents for primary aluminum, we determine that primary aluminum
was provided for LTAR and that a benefit exists in the amount of the
difference between the benchmark and what the respondent paid. See
section 771(5)(E)(iv) of the Act and 19 CFR 351.511(a).
Finally, with respect to specificity, the third subsidy element
specified under the Act, the GOC has provided information on end uses
for primary aluminum. The GOC stated that the end uses of primary
aluminum relate to the type of industry involved as a direct purchaser
of the input. The GOC further stated that the consumption of primary
aluminum occurs across a broad range of industries. While numerous
companies may comprise the listed industries, section
771(5A)(D)(iii)(I) of the Act clearly directs the Department to conduct
its analysis on an industry or enterprise basis. Based on our review of
the data and consistent with our past practice, we determine that the
industries named by the GOC are limited in number and, hence, the
subsidy is specific. See section 771(5A)(D)(iii)(I) of the Act. See
LWRP from the PRC Decision Memorandum at Comment 7; see also Racks from
the PRC Decision Memorandum at ``Provision of Wire Rod for Less Than
Adequate Remuneration.''
We find that the GOC's provision of primary aluminum for LTAR to be
a domestic subsidy as described under 19 CFR 351.525(b)(3). Therefore,
to calculate the net subsidy rate, we divided the benefit by a
denominator comprised of total sales. Regarding the Zhongya Companies,
we divided the benefit by the companies' total sales during the POI.
Regarding the Guang Ya Companies, we divided the benefit by combined
total sales of Guang Ya and Guangcheng.
On this basis, we calculated a total net subsidy rate of 2.36
percent ad valorem for the Zhongya Companies and 3.07 percent ad
valorem for the Guang Ya Companies.
T. Purchase of Aluminum Extrusions for MTAR
We initiated on a program that alleged that the GOC, under the
Government Procurement Law and the Indigenous Innovation program,
purchases aluminum extrusions for MTAR. Therefore, the Department
requested information on whether the GOC or GOC authorities purchased
aluminum extrusions from respondents for MTAR. The GOC and the two
company respondents stated that neither the two companies nor their
products are listed in local government indigenous innovation
catalogues; therefore, we preliminarily determine that the companies
did not use the Indigenous Innovation programs. However, information
provided in the companies' responses indicate that they may have
benefited from the government's purchase of aluminum extrusions under
the Government Procurement Law.
The Guang Ya and Zhongya Companies provided information concerning
their sales of aluminum extrusions during the POI. The Guang Ya
Companies provided complete sales information. The Guang Ya Companies
report in their questionnaire response which customers were GOC
authorities and which were private companies. See the Guang Ya
Companies August 9, 2010, supplemental questionnaire response at
Exhibits 68 and 69. The Zhongya Companies provided the requested sales
information for 70 percent of its sales, which corresponded to its top
ten customers.\9\ The Zhongya Companies report that these top ten
customers were private companies. See Attachment 4 of the Zhongya
Companies' August 6, 2010, supplemental questionnaire. However, as
discussed above in the ``Adverse Facts Available'' section, the Zhongya
Companies' failed to report the requested information for the remaining
30 percent of its sales value.
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\9\ For purposes of this preliminary determination, we are
assuming that the Zhongya Companies made this statement in reference
to their sales value.
---------------------------------------------------------------------------
The Department also requested information from the GOC regarding
the ownership structure of the customers that purchased aluminum
extrusions from the Guang Ya and Zhongya Companies. Specifically, the
Department requested ownership information that would enable it to
determine whether the two firms' customers were government authorities
capable of providing a financial contribution under section
771(5)(D)(iv) of the Act. In the case of the Guang Ya Companies, the
GOC provided ownership information for a portion of the companies'
customers. For the Zhongya Companies, the GOC provided ownership
information for six out of the ten customers.
For purposes of this preliminary determination, we are relying on
the information supplied by the GOC and by the Guang Ya and Zhongya
Companies when determining whether the customers identified in the
firms' questionnaire responses are government authorities. Accordingly,
we determine that the aluminum extrusions the Guang Ya Companies sold
to GOC authorities constitute a financial contribution under section
771(5)(D)(iv) of the Act. Concerning the Zhongya Companies, as
explained in the ``Adverse Facts Available'' section, we are assuming
as AFA that the Zhongya Companies' unreported sales values were made to
GOC authorities and, thus, constitute a financial contribution under
section 771(5)(D)(iv) of the Act. We will continue to solicit
information from the GOC, the Zhongya Companies, and Guang Ya Companies
concerning the identities and ownership structure of their customers.
Having addressed the issue of financial contribution, we must next
analyze whether the sales of aluminum extrusions to GOC authorities
conferred a benefit within the meaning of section 771(5)(E)(iv) of the
Act. The Department has investigated subsidy allegations involving the
sale of a good for MTAR in relatively few proceedings. The most recent
proceeding in which the Department investigated the provision of a good
for MTAR was Low Enriched Uranium (LEU) from France. See, e.g., Notice
of Final Affirmative Countervailing Duty Determination: Low Enriched
Uranium From France, 66 FR 65901 (December 21, 2001) (LEU from France),
and accompanying Decision Memorandum (LEU from France Decision
Memorandum) at ``Purchase at Prices that Constitute More Than Adequate
Remuneration.'' In LEU from France, the Department measured whether a
benefit was conferred by comparing the price the government authority
paid to the respondent for LEU compared to the prices the government
authority paid to other foreign suppliers of LEU. Id. In LEU from
France, the Department indicated that it was conducting the benefit
calculation in this manner because it was the only means by which the
Department would be able to utilize benchmark prices paid in the
country of provision. Id. Thus, in LEU from France, the Department's
aim was to utilize a benchmark available in the country of provision.
In LEU from France, such a benchmark was only available using pricing
data supplied by the Government of France (e.g., pricing data from the
perspective of the buyer).
In the instant investigation, we preliminarily determine that there
are benchmark data available from the perspective of the seller. The
Guang Ya Companies provided information concerning the sales of
aluminum extrusions made to private customers. For purposes of the
preliminary determination, we find that these prices
[[Page 54320]]
constitute prices available in the PRC and, thus, are suitable for use
as a benchmark. Further, at this time, we preliminarily determine there
is no information on the record of the investigation to suggest that
the prices paid by private purchasers of aluminum extrusions in the PRC
are distorted as a result of the GOC's involvement in the market for
aluminum extrusions.
Thus, to determine whether a benefit was conferred on the Guang Ya
Companies' sale of aluminum extrusions to GOC authorities, we compared
the prices the Guang Ya Companies charged to state-owned firms to the
prices the Guang Ya Companies charged to privately-owned customers. As
stated above, for purposes of the preliminary determination, we have
relied on information supplied by the Guang Ya Companies and the GOC in
determining which customers were government authorities and which were
private companies. We conducted our comparison on a monthly basis using
average unit prices. In deriving the benchmark, we used weighted
average, monthly prices. We will continue to examine the benchmark used
in this MTAR benefit calculation in order to determine the most
appropriate benchmark for the final determination and we invite
interested parties to comment on this issue.
Comparing the benchmark unit sales prices to the unit sales prices
the Guang Ya Companies sold to GOC authorities, we determine that a
benefit exists in the amount of the difference between the benchmark
sales price and the sale prices charged to GOC authorities. See section
771(5)(E)(iv). To calculate the benefit on each transaction, we
multiplied the unit benefit by the corresponding quantity. We then
summed the benefits on each transaction to calculate the total benefit
attributable to the Guang Ya Companies.
Regarding the Zhongya Companies, as noted above they failed to
provide any information regarding 30 percent of its sales value.
Therefore, we are assuming as AFA that the unreported sales were made
to GOC authorities and, thus, we must determine whether a benefit was
conferred on the sales. Therefore, to calculate the benefit, we first
used the total sales value reported by the Zhongya Companies (70
percent of its total sales) to derive the Zhongya Companies' total
sales of aluminum extrusions. Next, we calculated the difference
between these two sales values to derive the total sales value for the
30 percent of aluminum extrusion sales that the Zhongya Companies
failed to report to the Department. As discussed in the ``Adverse Facts
Available'' section, we are assuming as AFA that the Zhongya Companies
made these sales to GOC authorities. Further, as discussed in the
``Adverse Facts Available'' section, as AFA we assumed that the Zhongya
Companies received a 20 percent price premium on its sales to GOC
authorities. Accordingly, we calculated the benefit by multiplying the
derived total sales value for the sales that were not reported by the
Zhongya Companies by 20 percent. In this manner, we determine that the
Zhongya Companies received a benefit under the program within the
meaning of section 771(5)(E)(iv) of the Act.
Finally, with respect to specificity, we preliminarily determine
that this program is specific under section 771(5A)(C) of the Act
because the government procurement program is contingent upon the use
of domestic goods over imported goods, as evidenced by the price
premium set forth in the Implementing Measures of the Procurement Law.
On this basis, we calculated a total net subsidy rate of 6.63
percent ad valorem for the Zhongya Companies and 0.14 percent ad
valorem for the Guang Ya Companies.
Programs Preliminarily Determined Not To Confer a Benefit During the
POI
Regarding programs listed below, benefits from these programs
result in net subsidy rates that are less than 0.005 percent ad valorem
or constitute benefits that were fully expensed prior to the POI.
Consistent with our past practice, we therefore have not included these
programs in our net countervailing duty rate calculations. See, e.g.,
CFS from the PRC Decision Memorandum at ``Analysis of Programs,
Programs Determined Not To Have Been Used or Not To Have Provided
Benefits During the POI for GE.''
A. Labor and Social Security Allowance Grants in Sanshui District of
Guangdong Province
B. ``Large and Excellent'' Enterprises Grant
C. Advanced Science/Technology Enterprise Grant
D. Advanced Science/Technology Enterprise Grant
E. Award for Self-Innovation Brand/Grant for Self-Innovation Brand and
Enterprise Listing
F. Tiaofeng Electric Power Subscription Subsidy Funds
G. Award for Excellent Enterprise
H. Export Incentive Payments Characterized as Value Added Tax (VAT)
Rebates
Programs Preliminarily Determined Not To Be Used \10\
---------------------------------------------------------------------------
\10\ In this section we refer to programs preliminarily
determined to be not used by the two participating respondent
companies.
---------------------------------------------------------------------------
A. Loans and Interest Subsidies Provided Pursuant to the Northeast
Revitalization Program
B. Provincial Tax Exemptions and Reductions for ``Productive'' FIEs
C. Tax Reductions for FIEs Purchasing Chinese-Made Equipment
D. Tax Reductions for FIEs in Designated Geographic Locations
E. Tax Reductions for Technology- or Knowledge-Intensive FIEs
F. Tax Credits for Domestically-Owned Companies Purchasing Chinese-Made
Equipment
G. Tax Reductions for Export-Oriented FIEs
H. Tax Refunds for Reinvesting of FIE Profits in Export-Oriented
Enterprises
I. Accelerated Depreciation for Enterprises Located in the Northeast
Region
J. Forgiveness of Tax Arrears for Enterprises in the Old Industrial
Bases of Northeast China
K. VAT Rebates on FIE Purchases of Chinese-Made Equipment
L. Exemptions from Administrative Charges for Companies in the ZHTIDZ
M. The State Key Technology Renovation Project Fund
N. Grants to Cover Legal Fees in Trade Remedy Cases in Zhenzhen
O. The Clean Production Technology Fund
P. Grants for Listing Shares: Liaoyang City (Guangzhou Province),
Wenzhou Municipality (Zhejiang Province), and Quanzhou Municipality
(Fujian Province)
Q. The Northeast Region Foreign Trade Development Fund
R. The Northeast Region Technology Reform Fund
S. Land Use Rights in the Liaoyang High-Tech Industry Development Zone
T. Allocated Land Use Rights for SOEs
Verification
In accordance with section 782(i)(1) of the Act, we intend to
verify the information submitted by the Zhongya Companies, the Guang Ya
Companies, and the GOC prior to making our final determination.
Suspension of Liquidation
In accordance with section 703(d)(1)(A)(i) of the Act, we have
calculated an individual rate for subject merchandise produced and
exported by the entities individually investigated. We have also
calculated an all-others
[[Page 54321]]
rate. We preliminarily determine the total estimated net
countervailable subsidy rates to be:
------------------------------------------------------------------------
Company Ad valorem net subsidy rate
------------------------------------------------------------------------
Guang Ya Aluminum Industries Co., 6.18 percent ad valorem.
Ltd. (Guang Ya), Foshan
Guangcheng Aluminum Co., Ltd.
(Guangcheng), Guang Ya Aluminum
Industries Hong Kong (Guang Ya
HK), Kong Ah International
Company Limited (Kong Ah), and
Yongji Guanghai Aluminum
Industry Co., Ltd. (Guanghai)
(collectively the Guang Ya
Companies).
Zhaoqing New Zhongya Aluminum 10.37 percent ad valorem.
Co., Ltd. (New Zhongya), Zhongya
Shaped Aluminum HK Holding Ltd.
(Zhongya HK), and Karlton
Aluminum Company Ltd. (Karlton)
(collectively the Zhongya
Companies).
Dragonluxe Limited (Dragonluxe).. 137.65 percent ad valorem.
Miland Luck Limited (Miland)..... 137.65 percent ad valorem.
Liaoyang Zhongwang Aluminum 137.65 percent ad valorem.
Profile Co. Ltd./Liaoning
Zhongwang Group (collectively,
the Zhongwang Group).
All Others Rate.................. 137.65 percent ad
valorem.
------------------------------------------------------------------------
We note that section 705(c)(5)(A)(i) of the Act states that for
companies not investigated, we will determine an all-others rate equal
to the weighted average countervailable subsidy rates established for
exporters and producers individually investigated, excluding any zero
and de minimis countervailable subsidy rates, and any rates determined
entirely under section 776 of the Act. However, as discussed above in
the ``Application of Adverse Inferences: Non-Cooperative Companies''
section, the companies under individual investigation that participated
in the investigation are voluntary respondents. The Department's
regulations state that in calculating the all-others rate under section
705(c)(5) of the Act, the Department will exclude net subsidy rates
calculated for voluntary respondents. See 19 CFR 351.204(d)(3). The
Preamble to Procedural Regulations further explains that while this
principle of excluding voluntary rates from the all-others rate is not
directly addressed in the statute, Article 9.4 of the Antidumping
Agreement implies that the all-others rate cannot be a function of
subsidy rates calculated for voluntary respondents. See Preamble to
Procedural Regulations, 62 FR at 27310. The Preamble to Procedural
Regulations further explains that the purpose of excluding voluntary
respondents from the all-others rate calculation is to prevent the
``distortion or outright manipulation of the all others rate.'' Id.
We acknowledge that in a prior CVD investigation involving the PRC
the Department, despite the language in the Preamble to Procedural
Regulations and 19 CFR 351.204(d)(3), calculated the all-others rate by
simple-averaging the AFA rates of the non-cooperating, mandatory
respondents with the rate calculated for a voluntary respondent. See
LWS from the PRC Decision Memorandum at Comment 21. However, upon
further examination, we now determine that the potential for voluntary
respondents' net subsidy rates to distort or manipulate the all-others
rate is too great and, thus, we find that reliance on the approach from
LWS from the PRC is no longer appropriate.
Accordingly, because we lack subsidy rates established for
exporters and producers individually investigated, we must resort to
``any reasonable method'' to derive the all-others rate, as described
under section 705(c)(5)(A)(ii) of the Act. We preliminarily determine
that equating the all-others rate with the total AFA rate applied to
the non-cooperating, mandatory respondents constitutes a ``reasonable
method'' under 705(c)(5)(A)(ii) of the Act. See, e.g., Certain
Potassium Phosphate Salts From the People's Republic of China: Final
Affirmative Countervailing Duty Determination and Termination of
Critical Circumstances Inquiry, 75 FR 30375 (June 1, 2010) (in an
investigation where all of the mandatory respondents received a rate
based on adverse facts available, using the AFA rate assigned to the
mandatory respondents as the all-others rate).
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 the subject merchandise 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 the 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), the Department will disclose
to the parties the calculations for this preliminary determination
within five days of its announcement. Case briefs for this
investigation must be submitted no later than one week after the
issuance of the last verification report. See 19 CFR 351.309(c) (for a
further discussion of case briefs). Rebuttal briefs, which must be
limited to issues raised in the case briefs, must be filed within five
days after the deadline for submission of case briefs. See 19 CFR
351.309(d). 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.
In accordance with 19 CFR 351.310(c), we will hold a public
hearing, if requested, to afford interested parties an opportunity to
comment on this preliminary determination. Individuals who wish to
request a hearing must submit a written request within 30 days of the
publication of this notice in the Federal Register to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, 14th Street and Constitution Avenue, NW, Washington, DC 20230.
Parties will be notified of the schedule for the hearing and parties
should confirm the time, date, and place of the hearing 48 hours before
the
[[Page 54322]]
scheduled time. Requests for a public hearing should contain: (1)
Party's name, address, and telephone number; (2) the number of
participants; and (3) to the extent practicable, an identification of
the arguments to be raised at the hearing.
This determination is issued and published pursuant to sections
703(f) and 777(i) of the Act and 19 CFR 351.221(b)(4).
Dated: August 30, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-22204 Filed 9-3-10; 8:45 am]
BILLING CODE 3510-DS-P