[Federal Register Volume 75, Number 182 (Tuesday, September 21, 2010)]
[Notices]
[Pages 57444-57449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-23547]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-957]
Certain Seamless Carbon and Alloy Steel Standard, Line, and
Pressure Pipe from the People's Republic of China: Final Affirmative
Countervailing Duty Determination, Final Affirmative Critical
Circumstances Determination
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (the ``Department'') has determined
that countervailable subsidies are being provided to producers and
exporters of seamless carbon and alloy steel standard, line, and
pressure pipe (``seamless pipe'') from the People's Republic of China
(``PRC''). For information on the estimated countervailing duty rates,
please see the ``Suspension of Liquidation'' section, below.
DATES: Effective Date: September 21, 2010.
FOR FURTHER INFORMATION CONTACT: Shane Subler, Joseph Shuler, and
Matthew Jordan, AD/CVD Operations, Office 1, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW., Washington, DC 20230; telephone:
(202) 482-0189, (202) 482-1293, and (202) 482-1540, respectively.
Period of Investigation
The period for which we are measuring subsidies, or period of
investigation, is January 1, 2008, through December 31, 2008.
Case History
The following events have occurred since our preliminary
determination. See Certain Seamless Carbon and Alloy Steel Standard,
Line, and Pressure Pipe from the People's Republic of China:
Preliminary Affirmative Countervailing Duty Determination, Preliminary
Affirmative Critical Circumstances Determination, 75 FR 9163 (March 1,
2010) (``Preliminary Determination'').
On February 23, 2010, the Department received supplemental
questionnaire
[[Page 57445]]
responses from Hengyang Steel Tube Group International Trading, Inc.
(``Hengyang Trading''), Hengyang Valin Steel Tube Co., Ltd. (``Hengyang
Valin''), Hengyang Valin MPM Tube Co., Ltd. (``Hengyang MPM''), Xigang
Seamless Steel Tube Co., Ltd. (``Xigang Seamless''), Wuxi Seamless
Special Pipe Co., Ltd. (``Special Pipe''), Jiangsu Xigang Group Co.,
Ltd. (``Xigang Group''), and Wuxi Resources Steel Making Co., Ltd.
(``Resources Steel''), as well as responses from Hunan Valin Xiangtan
Iron & Steel Co., Ltd. (``Valin Xiangtan''), Wuxi Sifang Steel Tube
Co., Ltd. (``Sifang''), Hunan Valin Steel Co., Ltd. (``Hunan Valin''),
and Hunan Valin Iron & Steel Group Co., Ltd. (``Valin Group''),
(collectively, ``Hengyang'').
On March 3, 2010, and March 8, 2010, the Department issued
questionnaires regarding new subsidy allegations to Tianjin Pipe
(Group) Corp., Tianjin Pipe Iron Manufacturing Co., Ltd., Tianguan
Yuantong Pipe Product Co., Ltd., Tianjin Pipe International Economic
and Trading Co., Ltd., TPCO Charging Development Co., Ltd.
(collectively, ``TPCO''), and Hengyang. The Department received a
response from TPCO on March 10, 2010. The Department received a
response from Hengyang on March 23, 2010. The Department issued a
supplemental questionnaire to Hengyang on March 29, 2010, and received
a response on April 13, 2010. The Department issued a letter on April
5, 2010, to the Government of China (``GOC'') asking for an update of
its initial questionnaire response with respect to coking coal purchase
information supplied to the GOC by Hengyang. The Department received a
response to this letter on May 4, 2010. The Department issued a
supplemental questionnaire regarding export restrictions to the GOC on
April 13, 2010 and received a response on April 20, 2010. The
Department issued a letter on April 16, 2010, to the GOC regarding CRC
China, a company identified by Hengyang as the ultimate owner of
subsidiary companies that held ownership stakes in the responding
Hengyang companies since December 11, 2001.\1\ The Department received
a response on April 30, 2010. The Department sent a letter to the GOC
on May 5, 2010, regarding the GOC's April 30 response on CRC China. The
Department received a response on May 12, 2010. The Department issued a
supplemental questionnaire to the GOC on May 18, 2010, and received a
response on May 25, 2010.
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\1\ See Volume 5, page 5 of Hengyang's January 4, 2010,
questionnaire response.
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On March 1, 2010, Petitioners \2\ requested alignment of the final
countervailing duty determination with the final determination in the
companion antidumping duty investigation of seamless pipe from the PRC,
in accordance with section 705(a)(1) of the Tariff Act of 1930, as
amended (``the Act''), and 19 CFR 351.210(b)(4). On March 15, 2010, the
Department announced the alignment of the final countervailing duty
determination of seamless pipe from the PRC with the final
determination in the companion antidumping duty investigation of
seamless pipe from the PRC. See Certain Seamless Carbon and Alloy Steel
Standard, Line, and Pressure Pipe from the People's Republic of China:
Alignment of Final Countervailing Duty Determination with Final
Antidumping Duty Determination, 75 FR 13255 (March 19, 2010).
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\2\ Petitioners in this investigation are United States Steel
Corporation (``U.S. Steel''); TMK IPSCO; V&M Star L.P.; and the
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Service Workers International Union, AFL-CIO-
CLC (collectively, ``Petitioners'').
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On April 14, 2010, U.S. Steel filed an uncreditworthy allegation
with respect to Xigang Group, Xigang Seamless, Special Pipe, and
Resources Steel. On May 12, 2010, the Department announced it would not
investigate the uncreditworthiness allegation. See Memorandum from
Joseph Shuler and Shane Subler, International Trade Compliance
Analysts, to Susan Kuhbach, Director, Office 1, Import Administration,
entitled ``Uncreditworthy Allegation,'' (May 12, 2010).
On May 12, 2010, the Department received a response from U.S. Steel
regarding the GOC's April 20, 2010, export restrictions response.
From June 7, 2010, to June 18, 2010, we conducted verification of
the questionnaire responses submitted by Hengyang and TPCO. See
Memorandum from Shane Subler and Matthew Jordan, International Trade
Compliance Analysts, Office 1, to Susan H. Kuhbach, Office Director,
AD/CVD Operations, Office 1, entitled ``Verification Report: Hengyang
Steel Tube Group International Trading, Inc. (``Hengyang Trading''),
Hengyang Valin Steel Tube Co., Ltd. (``Hengyang Valin''), Hengyang
Valin MPM Tube Co., Ltd. (``Hengyang MPM''), Xigang Seamless Steel Tube
Co., Ltd. (``Xigang Seamless''), Wuxi Seamless Special Pipe Co., Ltd.
(``Special Pipe''), Jiangsu Xigang Group Co., Ltd. (``Xigang Group''),
Wuxi Resources Steel Making Co., Ltd. (``Resources Steel''), Hunan
Valin Xiangtan Iron & Steel Co., Ltd. (``Valin Xiangtan''), Wuxi Sifang
Steel Tube Co., Ltd. (``Sifang''), Hunan Valin Steel Co., Ltd. (``Hunan
Valin''), and Hunan Valin Iron & Steel Group Co., Ltd. (``Valin
Group'') (collectively, ``Hengyang'')'' (July 16, 2010); and Memorandum
from Scott Holland and Joseph Shuler, International Trade Compliance
Analysts, Office 1, to Susan H. Kuhbach, Office Director, AD/CVD
Operations, Office 1, entitled ``Verification Report: Tianjin Pipe
(Group) Corporation (``TPCO Group''), Tianjin Pipe Iron Manufacturing
Co., Ltd. (``TPCO Iron''), Tianguan Yuantong Pipe Product Co., Ltd.
(``Yuantong''), Tianjin Pipe International Economic and Trading Co.,
Ltd. (``TPCO International''), and TPCO Charging Development Co., Ltd.
(``Charging'') (collectively, ``TPCO'') (August 9, 2010).
On August 13, 2010, the Department issued its Hengyang Post-
Preliminary Analysis and TPCO Post-Preliminary Analysis.\3\ We received
case briefs from the GOC, TPCO, Hengyang, U.S. Steel, Toyota Tsusho
American Inc. (``TAI''), and Salem Steel North America, LLC (``Salem
Steel'') on August 26, 2010. We returned the case brief of Hengyang on
August 26, 2010, as it appeared to contain new factual information not
on the record of this case. Hengyang resubmitted its case brief on
August 30, 2010. The GOC, TPCO, Hengyang, and U.S. Steel submitted
rebuttal briefs on September 1, 2010.
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\3\ See Memorandum from Susan H. Kuhbach, Office Director, AD/
CVD Operations, Office 1, to Ronald K. Lorentzen, Deputy Assistant
Secretary for Import Administration, dated August 13, 2010,
``Countervailing Duty Investigation of Certain Seamless Carbon and
Alloy Steel Standard, Line, and Pressure Pipe from the People's
Republic of China: Post-Preliminary Analysis and Calculation
Memorandum for: Hengyang Steel Tube Group International Trading,
Inc. (``Hengyang Trading''), Hengyang Valin Steel Tube Co., Ltd.
(``Hengyang Valin''), Hengyang Valin MPM Tube Co., Ltd. (``Hengyang
MPM''), Xigang Seamless Steel Tube Co., Ltd. (``Xigang Seamless''),
Wuxi Seamless Special Pipe Co., Ltd. (``Special Pipe''), Jiangsu
Xigang Group Co., Ltd. (``Xigang Group''), Wuxi Resources Steel
Making Co., Ltd. (``Resources Steel''), Hunan Valin Xiangtan Iron &
Steel Co., Ltd. (``Valin Xiangtan''), Wuxi Sifang Steel Tube Co.,
Ltd. (``Sifang''), Hunan Valin Steel Co., Ltd. (``Hunan Valin''),
Hunan Valin Iron & Steel Group Co., Ltd. (``Valin Group'')
(collectively ``Hengyang'') (August 13, 2010) (``Hengyang Post-
Preliminary Analysis''); and Memorandum from Edward Yang to Ronald
Lorentzen, ``Countervailing Duty Investigation of Certain Seamless
Carbon and Alloy Steel Standard, Line, and Pressure Pipe from the
People's Republic of China: Post-Preliminary Analysis and
Calculation Memorandum for (TPCO)'' (August 13, 2010) (``TPCO Post-
Preliminary Analysis'').
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The GOC, TPCO, and Petitioners requested a hearing. The same
parties later withdrew their requests. Therefore, no hearing was held.
Hengyang and U.S. Steel requested a meeting. A meeting with Hengyang
was held on September
[[Page 57446]]
2, 2010. A meeting with U.S. Steel was held on September 3, 2010.
Scope of the Investigation
The scope of this investigation consists of certain seamless carbon
and alloy steel (other than stainless steel) pipes and redraw hollows,
less than or equal to 16 inches (406.4 mm) in outside diameter,
regardless of wall-thickness, manufacturing process (e.g., hot-finished
or cold-drawn), end finish (e.g., plain end, beveled end, upset end,
threaded, or threaded and coupled), or surface finish (e.g., bare,
lacquered or coated). Redraw hollows are any unfinished carbon or alloy
steel (other than stainless steel) pipe or ``hollow profiles'' suitable
for cold finishing operations, such as cold drawing, to meet the
American Society for Testing and Materials (``ASTM'') or American
Petroleum Institute (``API'') specifications referenced below, or
comparable specifications. Specifically included within the scope are
seamless carbon and alloy steel (other than stainless steel) standard,
line, and pressure pipes produced to the ASTM A-53, ASTM A-106, ASTM A-
333, ASTM A-334, ASTM A-589, ASTM A-795, ASTM A-1024, and the API 5L
specifications, or comparable specifications, and meeting the physical
parameters described above, regardless of application, with the
exception of the exclusion discussed below.
Specifically excluded from the scope of the investigation are: (1)
All pipes meeting aerospace, hydraulic, and bearing tubing
specifications; (2) all pipes meeting the chemical requirements of ASTM
A-335, whether finished or unfinished; and (3) unattached couplings.
Also excluded from the scope of the investigation are all mechanical,
boiler, condenser and heat exchange tubing, except when such products
conform to the dimensional requirements, i.e., outside diameter and
wall thickness of ASTM A-53, ASTM A-106 or API 5L specifications.
The merchandise covered by the investigation is currently
classified in the Harmonized Tariff Schedule of the United States
(``HTSUS'') under item numbers: 7304.19.1020, 7304.19.1030,
7304.19.1045, 7304.19.1060, 7304.19.5020, 7304.19.5050, 7304.31.6050,
7304.39.0016, 7304.39.0020, 7304.39.0024, 7304.39.0028, 7304.39.0032,
7304.39.0036, 7304.39.0040, 7304.39.0044, 7304.39.0048, 7304.39.0052,
7304.39.0056, 7304.39.0062, 7304.39.0068, 7304.39.0072, 7304.51.5005,
7304.51.5060, 7304.59.6000, 7304.59.8010, 7304.59.8015, 7304.59.8020,
7304.59.8025, 7304.59.8030, 7304.59.8035, 7304.59.8040, 7304.59.8045,
7304.59.8050, 7304.59.8055, 7304.59.8060, 7304.59.8065, and
7304.59.8070.
Although the HTSUS subheadings are provided for convenience and
customs purposes, our written description of the merchandise subject to
this scope is dispositive.
Scope Comments
On May 26, 2010, Salem Steel, a U.S. importer of cold drawn
seamless mechanical tubing, submitted comments on the scope of this
investigation. Salem requested that the Department amend the scope of
this investigation to exclude CD Mechanical Tubing from the scope of
the investigation. On June 4, 2010, Salem Steel submitted proposed
scope language to exclude CD mechanical tubing from the scope of the
investigation. On June 8, 2010, TAI submitted comments supporting
Salem's proposed scope exclusion language. On June 23, 2010, the
Department issued a proposed scope modification via letter and
requested comments. See Letter to Interested Parties, Regarding the
``Antidumping Duty Investigation of Certain Seamless Carbon and Alloy
Steel Standard, Line, and Pressure Pipe from the People's Republic of
China,'' dated June 23, 2010. Specifically, the Department's proposed
scope modification language excluded ``all mechanical, boiler,
condenser and heat exchange tubing, except when such products conform
to the dimensional requirements, i.e., outside diameter and wall
thickness of ASTM A-53, ASTM A-106 or APL 5L specifications.'' Id. On
June 30, 2010, TAI and Salem Steel submitted comments that both
supported the Department's proposed scope modifications, as well as
language that suggested additional modifications to the scope of the
investigation. On July 2, 2010, Petitioners also submitted comments
that both supported the Department's proposed scope modification, as
well as language that suggested additional modifications to the scope
of the investigation. On August 20, 2010, the Department issued a
proposed scope modification via memorandum and requested comments. On
August 23, 2010, TAI submitted comments supporting the Department's
proposed scope modification language. After considering parties'
comments, the Department has determined to remove ASTM A-335 from the
list of covered specifications included within the scope of this
investigation, and include the following exclusion language in the
scope:
Specifically excluded from the scope of these investigations
are: (1) All pipes meeting aerospace, hydraulic, and bearing tubing
specifications; (2) all pipes meeting the chemical requirements of
ASTM A-335, whether finished or unfinished; and (3) unattached
couplings. Also excluded from the scope of these investigations are
all mechanical, boiler, condenser and heat exchange tubing, except
when such products conform to the dimensional requirements, i.e.,
outside diameter and wall thickness of ASTM A-53, ASTM A-106 or API
5L specifications.
See Comment 5 of the accompanying Issues and Decision Memorandum
for additional information.
Injury Test
Because the PRC is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Act, section 701(a)(2) of the Act
applies to this investigation. Accordingly, the U.S. International
Trade Commission (``ITC'') must determine whether imports of the
subject merchandise from the PRC materially injure, or threaten
material injury to a U.S. industry. On November 2, 2009, the ITC issued
its affirmative preliminary determination that there is a reasonable
indication that an industry in the United States is threatened with
material injury by reason of allegedly subsidized imports of seamless
pipe from the PRC. See Certain Seamless Carbon and Alloy Steel
Standard, Line, and Pressure Pipe From China, 74 FR 57521 (November 6,
2009) and Certain Seamless Carbon and Alloy Steel Standard, Line, and
Pressure Pipe from China: Investigation Nos. 701-TA-469 and 731-TA-1168
(Preliminary) (November 2009).
Critical Circumstances
In the Preliminary Determination, the Department concluded that
critical circumstances did not exist with respect to imports of
seamless pipe from the PRC from TPCO, in accordance with 703(e)(1) of
the Act, because TPCO's shipments did not reach the threshold for a
finding that there have been massive imports of the subject merchandise
over a relatively short period.\4\ However, in the Preliminary
Determination, the Department concluded that critical circumstances do
exist with respect to imports of seamless pipe from the PRC from
Hengyang, in accordance with 703(e)(1)(B) of the Act. For ``all other''
exporters, we determined that critical circumstances do exist with
respect to imports of seamless pipe from the PRC from ``all other''
exporters, in
[[Page 57447]]
accordance with section 703(e)(1)(B) of the Act.\5\
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\4\ See 75 FR at 9165.
\5\ See 75 FR at 9165.
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We have not received any information since the Preliminary
Determination that would lead us to change our preliminary finding.
Therefore, in accordance with 705(a)(2) of the Act, we continue to find
that critical circumstances exist with respect to imports of subject
merchandise from the PRC from Hengyang and ``all other'' exporters, but
not for imports from TPCO.
Analysis of Comments Received
All issues raised in the case and rebuttal briefs by parties to
this investigation are addressed in the Memorandum from Susan H.
Kuhbach, Acting Deputy Assistant Secretary for Antidumping and
Countervailing Duty Operations, to Paul Piquado, Acting Deputy
Assistant Secretary for Import Administration, entitled ``Issues and
Decision Memorandum for the Final Determination in the Countervailing
Duty Investigation of Certain Seamless Carbon and Alloy Steel Standard,
Line, and Pressure Pipe (``Seamless Pipe'') from the People's Republic
of China'' (September 10, 2010) (hereafter ``Decision Memorandum''),
which is hereby adopted by this notice. Attached to this notice as an
Appendix is a list of the issues that parties have raised and to which
we have responded in the Decision Memorandum. Parties can find a
complete discussion of all issues raised in this investigation and the
corresponding recommendations in this public memorandum, which is on
file in the Central Records Unit, Room 1117 in the main building of the
Commerce Department. In addition, a complete version of the Decision
Memorandum can be accessed directly on the Internet at http://ia.ita.doc.gov/frn/. The paper copy and electronic version of the
Decision Memorandum are identical in content.
Use of Adverse Facts Available
For purposes of this final determination, we have continued to rely
on facts available and to draw an adverse inference, in accordance with
sections 776(a) and (b) of the Act, to determine that the GOC's
dominance of the market in the PRC for steel round billets supports the
reasonable conclusion that this market is significantly distorted.
Consequently, we are not relying on domestic prices in the PRC in
determining whether a benefit was conferred through the GOC's provision
of steel round billets to the mandatory respondents. Similarly, we have
continued to apply AFA to determine that all of the steel round billets
were provided by government authorities.
The Department continues to find that the use of ``facts otherwise
available'' is warranted with regard to the GOC's provision of
electricity to the mandatory respondents. Specifically, the Department
requested that the GOC explain how electricity cost increases are
reflected in retail price increases. The GOC responded that it was
gathering this information, but it did not request an extension from
the Department for submitting this information after the original
questionnaire deadline date. Because the GOC did not provide the
requested information, we determine that necessary information is not
on the record. Accordingly, the use of facts otherwise available under
section 776(a) of the Act is appropriate. By not responding to our
questionnaire, the GOC has failed to act to the best of its ability.
Accordingly, we find that an adverse inference is warranted, pursuant
to section 776(b) of the Act. Specifically, we find that the GOC's
provision of electricity constitutes a financial contribution within
the meaning of section 771(5)(D) of the Act and is specific within the
meaning of section 771(5A) of the Act. We have also relied on an
adverse inference in selecting a benchmark for determining the
existence and amount of the benefit.
The Department continues to find that the use of ``facts otherwise
available'' is warranted with regard to TPCO's reported receipt of
countervailable grants. The Department requested that the GOC provide
information about these grants in the initial questionnaire and a
supplemental questionnaire. The GOC did not provide the requested
information, asserting that it needed more time to gather the data.
Although the GOC responded that it was gathering this information, it
did not request an extension from the Department for submitting this
information after the supplemental questionnaire deadline date. Because
the GOC did not provide the requested information concerning these
grants, we determine that necessary information is not on the record
and that the GOC did not provide requested information by the
submission deadline. Accordingly, the use of facts otherwise available
pursuant to section 776(a) of the Act is appropriate. Also, we
determine that the GOC has failed to cooperate by not acting to the
best of its ability to comply with our request for information as it
did not respond by the deadline dates, nor did it explain why it is
unable to provide the requested information, with the result that an
adverse inference pursuant to section 776(b) of the Act is warranted in
the application of facts available. We find that these subsidies are a
direct transfer of funds within the meaning of section 771(5)(D)(i) of
the Act, providing a benefit in the amount of the grant. See 19 CFR
351.504(a). We determine, in the absence of a response from the GOC,
that the subsidies received under this program are limited to TPCO.
Hence, we find that these subsidies are specific under section
771(5A)(D)(i) of the Act.
In a departure from the Preliminary Determination, the Department
now finds that the use of ``facts otherwise available'' pursuant to
section 776(a) of the Act is warranted with regard to the provision of
coking coal for less than adequate remuneration (``LTAR''). In the
Preliminary Determination, based on the information on the record at
that time, the Department found that none of the mandatory respondents
received benefits under the program.\6\ At that time, Hengyang was
scheduled to provide a supplemental questionnaire response on behalf of
certain cross-owned affiliates. Accordingly, the Department stated,
``We intend to address {Hengyang's supplemental{time} response in a
post-preliminary determination.'' \7\ In Hengyang's February 23, 2010
supplemental questionnaire response, Hengyang indicated that a cross-
owned affiliate used coking coal. Accordingly, subsequent to the
Preliminary Determination, the Department investigated the allegation
concerning coking coal provided for LTAR. In the context of its
investigation, the Department requested information from the GOC about
the coking coal suppliers and the coking coal industry within the PRC.
The GOC did not provide the requested information. Because the GOC did
not provide the requested information concerning the coking coal
industry within the PRC, we determine that necessary information is not
on the record. Accordingly, the use of facts otherwise available
pursuant to section 776(a) of the Act is appropriate. Also, we
determine that the GOC has failed to cooperate by not acting to the
best of its ability to comply with our request for information, with
the result that an adverse inference pursuant to section 776(b) of the
Act is warranted in the application of facts available. Consequently,
we have applied AFA to
[[Page 57448]]
determine that all of the coking coal was provided by government
authorities.
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\6\ See 75 FR at 9180.
\7\ See 75 FR at 9170.
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In a departure from the Preliminary Determination, the Department
now finds that the use of ``facts otherwise available'' is warranted
with regard to export restrictions on coke. In the Preliminary
Determination, the Department found the program to be not
countervailable.\8\ After the Preliminary Determination, we requested
additional information on this program from the GOC. The GOC failed to
answer certain questions from the supplemental questionnaires, which we
described in the TPCO Post-Preliminary Analysis and Hengyang Post-
Preliminary Analysis.\9\ Because the GOC did not provide the requested
information concerning the coke industry within the PRC, we determine
that necessary information is not on the record. Accordingly, the use
of facts otherwise available pursuant to section 776(a) of the Act is
appropriate. Also, we determine that the GOC has failed to cooperate by
not acting to the best of its ability to comply with our request for
information, with the result that an adverse inference pursuant to
section 776(b) of the Act is warranted in the application of facts
available. In drawing an adverse inference, we determine that the GOC's
export restraints on coke constitute a financial contribution (i.e.,
provision of goods) to PRC producers of downstream goods that
incorporate coke within the meaning of sections 771(5)(B) and (D)(ii)
of the Act. Moreover, as an adverse inference, we find that GOC's
export restraints on coke are specific to producers of seamless pipe in
the PRC within the meaning of section 771(5A) of the Act. Accordingly,
we determine that, through these export restraints, the GOC is
providing inputs to downstream producers of seamless pipe.
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\8\ See 75 FR at 9179.
\9\ See TPCO Post-Preliminary Analysis at pages 3-9; see also
Hengyang Post-Preliminary Analysis at pages 25-30.
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The Department also now finds that the use of ``facts otherwise
available'' is warranted with regard to deed tax exemption. In the
Hengyang Post-Preliminary Analysis, we determined that Hengyang Valin
and Valin Xiangtan each received benefits under this program.\10\ We
asked the GOC to update its response to the initial questionnaire
regarding the benefits received by Hengyang Valin and Valin Xiangtan.
However, the GOC stated that it has no record of either company
receiving benefits from this program and, therefore, did not provide a
response to any parts of the original questionnaire with respect to
this program.\11\ Because the GOC did not provide the requested
information concerning these exemptions, we determine that necessary
information is not on the record. Accordingly, the use of facts
otherwise available pursuant to section 776(a) of the Act is
appropriate. Also, we determine that the GOC has failed to cooperate by
not acting to the best of its ability to comply with our request for
information. We determine that these deed tax exemptions confer a
countervailable benefit on Hengyang. The deed tax exemptions are a
financial contribution in the form of revenue forgone.\12\ In the
absence of a response from the GOC, we find, as an adverse inference
pursuant to section 776(b) of the Act, that the subsidies received
under this program are limited to Hengyang and, therefore, are specific
under section 771(5A)(D)(i) of the Act. The amount of the
countervailable benefit is the amount of deed tax Hengyang would have
paid in the absence of this program.\13\
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\10\ See Hengyang Post-Preliminary Analysis at pages 22-23.
\11\ See Response of the Government of China to the Department's
Fourth Supplemental Questionnaire (May 5, 2010) (``G4SR'') at 1.
\12\ See section 771(5)(D)(ii) of the Act.
\13\ See 19 CFR 351.509(a)(1).
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The Department finds that the use of ``facts otherwise available''
is warranted with regard to CRC China and its subsidiaries. In the
Hengyang Post-Preliminary Analysis, we found that Hengyang and the GOC
failed to provide complete information on CRC China or its
subsidiaries.\14\ Thus, we had no information to determine the
ownership structure of CRC China or its subsidiaries, or to determine
whether CRC China or its subsidiaries received countervailable
subsidies. We also could not determine whether CRC China and/or its
subsidiaries have other cross-owned affiliates (e.g., producers of
seamless pipe) that received countervailable subsidies. Because the GOC
did not provide the requested information concerning CRC China and its
subsidiaries, we determine that necessary information is not on the
record. Accordingly, the use of facts otherwise available pursuant to
section 776(a) of the Act is appropriate. Also, we determine that the
GOC has failed to cooperate by not acting to the best of its ability to
comply with our request for information. Consequently, an adverse
inference pursuant to section 776(b) of the Act is warranted in the
application of facts available. For purposes of this final
determination, we determine that CRC China together with its
subsidiaries benefitted from all countervailable programs that at least
one respondent in this investigation has used because we do not have
information on the record concerning which programs CRC China and its
subsidiaries actually used, but do have information that exporters or
producers of seamless pipe and their cross-owned companies did use and
benefit from these programs. For each of these programs, we are
applying the highest rate that we calculated for that program for the
responding Hengyang companies as a whole or for TPCO.\15\ Specifically,
we will apply the highest calculated rate for the identical program in
this investigation if either Hengyang or TPCO used the program.
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\14\ See Hengyang Post-Preliminary Analysis at 8.
\15\ Tianjin Pipe (Group) Corporation, Tianjin Pipe Iron
Manufacturing Co., Ltd., Tianguan Yuantong Pipe Product Co., Ltd.,
Tianjin Pipe International Economic and Trading Co., Ltd., and TPCO
Charging Development Co., Ltd. (collectively, ``TPCO'').
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For a full discussion of these issues, please see the Decision
Memorandum, at ``Use of Facts Otherwise Available and Adverse Facts
Available.''
Suspension of Liquidation
In accordance with section 703(d)(1)(A)(i) of the Act, we have
calculated a rate for each individually investigated producer/exporter
of the subject merchandise. 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.
Notwithstanding the language of section 705(c)(1)(B)(i)(I) of the
Act, we have not calculated the ``all others'' rate by weight averaging
the rates of TPCO and Hengyang, because doing so risks disclosure of
proprietary information. Therefore, we have calculated a simple average
of the two responding firms' rates. Since both TPCO and Hengyang
received countervailable export subsidies and the ``all others'' rate
is a simple average based on the individually investigated exporters
and producers, the ``all others'' rate includes export subsidies.
We determine the total net countervailable subsidy rates to be:
[[Page 57449]]
------------------------------------------------------------------------
Net subsidy
Exporter/Manufacturer rate
------------------------------------------------------------------------
Tianjin Pipe (Group) Corp., Tianjin Pipe Iron 13.66
Manufacturing Co., Ltd., Tianguan Yuantong Pipe Product
Co., Ltd., Tianjin Pipe International Economic and
Trading Co., Ltd., and TPCO Charging Development Co.,
Ltd....................................................
Hengyang Steel Tube Group Int'l Trading, Inc., Hengyang 53.65
Valin Steel Tube Co., Ltd., Hengyang Valin MPM Tube
Co., Ltd., Xigang Seamless Steel Tube Co., Ltd., Wuxi
Seamless Special Pipe Co., Ltd., Wuxi Resources Steel
Making Co., Ltd., Jiangsu Xigang Group Co., Ltd., Hunan
Valin Xiangtan Iron & Steel Co., Ltd., Wuxi Sifang
Steel Tube Co., Ltd., Hunan Valin Steel Co., Ltd.,
Hunan Valin Iron & Steel Group Co., Ltd................
All Others.............................................. 33.66
------------------------------------------------------------------------
Also, in accordance with section 703(d) of the Act, we instructed
U.S. Customs and Border Protection (``CBP'') to discontinue the
suspension of liquidation for countervailing duty purposes for subject
merchandise entered on or after June 29, 2010, but to continue the
suspension of liquidation of entries made from March 1, 2010, through
June 28, 2010.
We will issue a countervailing duty order if the ITC issues a final
affirmative injury determination, and will instruct CBP to suspend
liquidation of entries of seamless pipe from the PRC and to require a
cash deposit of estimated countervailing duties for such entries of
merchandise in the amounts indicated above. If the ITC determines that
material injury, or threat of material injury, does not exist, this
proceeding will be terminated and all estimated deposits or securities
posted as a result of the suspension of liquidation will be refunded or
canceled.
ITC Notification
In accordance with section 705(d) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all non-privileged and non-proprietary information related to this
investigation. We will allow the ITC access to all privileged and
business proprietary information in our files, provided the ITC
confirms that it will not disclose such information, either publicly or
under an APO, without the written consent of the Assistant Secretary
for Import Administration.
Return or Destruction of Proprietary Information
In the event that the ITC issues a final negative injury
determination, this notice will serve as the only reminder to parties
subject to an administrative protective order (``APO'') of their
responsibility concerning the destruction of proprietary information
disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely
written notification of the return/destruction of APO materials or
conversion to judicial protective order is hereby requested. Failure to
comply with the regulations and terms of an APO is a violation which is
subject to sanction.
This determination is published pursuant to sections 705(d) and
777(i) of the Act.
Dated: September 10, 2010.
Paul Piquado,
Acting Deputy Assistant Secretary for Import Administration.
Appendix--List of Comments and Issues in the Decision Memorandum
General Issues
Comment 1 Application of CVD Law to the PRC
Comment 2 Whether Application of the CVD Law to NMEs Violates the
Administrative Protection Act
Comment 3 Double Counting/Overlapping Remedies
Comment 4 Cutoff Date for Identifying Subsidies
Comment 5 Scope of the Investigation
Provision of Steel Rounds for LTAR
Comment 6 Application of AFA in Determining the Benchmark for Steel
Rounds
Comment 7 Government Ownership Should Not be the Dispositive Factor in
Determining Whether a Financial Contribution Has Occurred
Comment 8 Trading Company Suppliers
Comment 9 Benchmark Issues
Government Policy Lending
Comment 10 Whether Chinese Commercial Banks Are ``Authorities''
Comment 11 Whether the Policy Loan Program Is De Jure Specific
Comment 12 Whether the Department Should Use an In-country Benchmark
Comment 13 External Benchmark Methodology
Whether There is a Provision of Land for LTAR
Comment 14 Financial Contribution
Comment 15 Whether to Use an In-country Benchmark
Comment 16 Whether There Are Flaws in the Thai Benchmark
Comment 17 Whether Land Is Specific
Comment 18 Provision of Land-use Rights to Hengyang
Provision of Coking Coal for LTAR
Comment 19 Countervailability of Program
Comment 20 Freight Benchmark for Coking Coal Purchases
Hengyang-specific Issues
Comment 21 Cross-ownership Between Hengyang Companies
Comment 22 Application of AFA to CRC China
Comment 23 Finding that the GOC Did Not Cooperate With Respect to CRC
China
Comment 24 Hengyang Attribution
Comment 25 Hengyang Electricity Purchases
Comment 26 Currency Denomination for Hengyang Loans
Comment 27 Clerical Error Allegations for Debt Restructuring
Comment 28 Uncreditworthiness Allegation
TPCO-specific Issues
Comment 29 TPCO Attribution of Subsidies
Comment 30 TPCO Group Accelerated Depreciation
Other Issues
Comment 31 Export Restraints on Steel Rounds
Comment 32 Export Restraints on Coke
[FR Doc. 2010-23547 Filed 9-20-10; 8:45 am]
BILLING CODE 3510-DS-P