[Federal Register Volume 75, Number 186 (Monday, September 27, 2010)]
[Notices]
[Pages 59209-59212]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24182]
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DEPARTMENT Of COMMERCE
International Trade Administration
[C-560-824]
Certain Coated Paper Suitable for High-Quality Print Graphics
Using Sheet-Fed Presses from Indonesia: Final Affirmative
Countervailing Duty Determination
AGENCY: Import Administration, International Trade Administration,
Department of Commerc.
SUMMARY: The Department of Commerce (the Department) has determined
that countervailable subsidies are being provided to producers and
exporters of certain coated paper suitable for high-quality print
graphics using sheet-fed presses (coated paper) from Indonesia. For
information on the estimated countervailing duty rates, please see the
``Suspension of Liquidation'' section, below.
EFFECTIVE DATE: September 27, 2010.
FOR FURTHER INFORMATION CONTACT: Gene Calvert or Nicholas Czajkowski,
AD/CVD Operations, Office 6, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3586 and (202) 482-1395, respectively.
SUPPLEMENTARY INFORMATION:
Case History
The following events have occurred since the announcement of the
preliminary determination, which was published in the Federal Register
on March 9, 2010. See Certain Coated Paper from Indonesia: Preliminary
Affirmative Countervailing Duty Determination and Alignment of Final
Countervailing Duty Determination with Final Antidumping Duty
Determination, 75 FR 10761 (March 9, 2010) (Preliminary Determination).
The Department issued additional supplemental questionnaires to the
Government of Indonesia (GOI), and to cross-owned company respondents
PT Pabrik Kertas Tjiwi Kimia Tbk., PT Indah Kiat Pulp and Paper Tbk.,
and PT Pindo Deli Pulp and Paper Mills (collectively, APP/SMG)
regarding the programs under investigation. Parties submitted timely
responses to these supplemental questionnaires on May 11 and May 26
(the GOI and APP/SMG) and June 25 (the GOI only). On April 7 and April
8, APP/SMG and Appleton Coated LLC, NewPage Corporation, S.D. Warren
Company d/b/a Sappi Fine Paper North America, and the United Steel,
Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial
and Service Workers International Union (collectively, Petitioners),
respectively, submitted timely requests for a hearing pursuant to 19
CFR 351.310(c), which they both subsequently withdrew on August 6,
2010.
The Department conducted verification of the questionnaire
responses submitted by the GOI and APP/SMG from June 28, 2010 through
July 8, 2010. The Department issued the final business-proprietary
version of the verification reports on August 6, 2010. We received case
briefs from the GOI and APP/SMG, jointly, and from Petitioners on
August 16. We received
[[Page 59210]]
rebuttal briefs from these parties on August 23.
Scope of the Investigation
The merchandise under investigation includes certain coated paper
and paperboard\1\ in sheets suitable for high quality print graphics
using sheet-fed presses; coated on one or both sides with kaolin (China
or other clay), calcium carbonate, titanium dioxide, and/or other
inorganic substances; with or without a binder; having a GE brightness
level of 80 or higher;\2\ weighing not more than 340 grams per square
meter; whether gloss grade, satin grade, matte grade, dull grade, or
any other grade of finish; whether or not surface-colored, surface-
decorated, printed (except as described below), embossed, or
perforated; and irrespective of dimensions (Certain Coated Paper).
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\1\ `` `Paperboard' refers to Certain Coated Paper that is
heavier, thicker and more rigid than coated paper which otherwise
meets the product description. In the context of Certain Coated
Paper, paperboard typically is referred to as `cover,' to
distinguish it from `text.'''
\2\ One of the key measurements of any grade of paper is
brightness. Generally speaking, the brighter the paper the better
the contrast between the paper and the ink. Brightness is measured
using a GE Reflectance Scale, which measures the reflection of light
off of a grade of paper. One is the lowest reflection, or what would
be given to a totally black grade, and 100 is the brightest measured
grade.
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Certain Coated Paper includes (a) coated free sheet paper and
paperboard that meets this scope definition; (b) coated groundwood
paper and paperboard produced from bleached chemi-thermo-mechanical
pulp (BCTMP) that meets this scope definition; and (c) any other coated
paper and paperboard that meets this scope definition.
Certain Coated Paper is typically (but not exclusively) used for
printing multi-colored graphics for catalogues, books, magazines,
envelopes, labels and wraps, greeting cards, and other commercial
printing applications requiring high quality print graphics.
Specifically excluded from the scope are imports of paper and
paperboard printed with final content printed text or graphics.
As of 2009, imports of the subject merchandise are provided for
under the following categories of the Harmonized Tariff Schedule of the
United States (HTSUS): 4810.14.11, 4810.14.1900, 4810.14.2010,
4810.14.2090, 4810.14.5000, 4810.14.6000, 4810.14.70, 4810.19.1100,
4810.19.1900, 4810.19.2010, 4810.19.2090, 4810.22.1000, 4810.22.50,
4810.22.6000, 4810.22.70, 4810.29.1000, 4810.29.5000, 4810.29.6000,
4810.29.70, 4810.32, 4810.39 and 4810.92. While HTSUS subheadings are
provided for convenience and customs purposes, the written description
of the scope of the investigation is dispositive.
Scope Comments
Following the Preliminary Determination, on August 3, 2010, the
Department issued a decision memorandum addressing three scope issues
in this and the concurrent antidumping and countervailing duty
investigations on certain coated paper from Indonesia and the People's
Republic of China: (1) whether to clarify the scope of these
investigations to exclude multi-ply coated paper and paperboard; (2)
whether to modify the scope language by striking the phrase ``suitable
for high-quality print graphics;'' and (3) whether to add three HTSUS
numbers which may include in-scope merchandise (i.e., HTSUS 4810.32,
4810.39 and 4810.92). See August 3, 2010, Memorandum to Ronald K.
Lorentzen, Deputy Assistant Secretary for Import Administration, from
Susan Kuhbach, Director, Office 1, entitled ``Scope'' (August 3, 2010
Scope Memorandum). For the reasons explained in the August 3, 2010,
Scope Memorandum, the Department determined that: (1) multi-ply
products that otherwise meet the description of the scope of the
investigations are not excluded from the scope; (2) the ``suitable for
high-quality print graphics'' language should not be deleted from the
scope; and (3) the three HTSUS numbers at issue should be added to the
scope.
The Department subsequently provided the interested parties an
opportunity to comment on its post-preliminary scope determination. In
response, the respondents in these investigations filed a case brief on
August 20, 2010, and the petitioners filed a rebuttal brief on August
24, 2010. Based on the Department's analysis of these comments and the
factual records of these investigations, the Department continues to
find that multi-ply coated paper and paperboard are not excluded from
the scope of the investigations, that the ``suitable for high-quality
print graphics'' language should be maintained, and that the three
HTSUS numbers listed above should be added to the scope. For a complete
discussion of the parties' comments and the Department's position, see
``Issues and Decision Memorandum for the Final Determination in the
Countervailing Duty Investigation of Certain Coated Paper Suitable for
High-Quality Print Graphics Using Sheet-Fed Presses from the People's
Republic of China,'' dated concurrently with this notice and
incorporated herein by reference.
Injury Test
Because Indonesia is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Tariff Act of 1930, as amended (the
Act), the International Trade Commission (ITC) is required to determine
pursuant to section 701(a)(2) of the Act whether imports of the subject
merchandise from Indonesia materially injure, or threaten material
injury to, a United States industry. On November 23, 2009, the ITC
published its preliminary determination that there is a reasonable
indication that an industry in the United States is materially injured
by reason of allegedly subsidized imports from Indonesia of subject
merchandise. See Certain Coated Paper Suitable for High-Quality Print
Graphics Using Sheet-Fed Presses from China and Indonesia, 74 FR 61174
(November 23, 2009); and Certain Coated Paper Suitable for High-Quality
Print Graphics Using Sheet-Fed Presses from China and Indonesia
(Preliminary), USITC Pub. 4108, Inv. Nos. 701-TA-470-471 and 731-TA-
1169-1170 (November 2009).
Period of Investigation
The period for which we are measuring subsidies, i.e., the period
of investigation (POI), is January 1, 2008 through December 31, 2008.
Analysis of Comments Received
All non-scope issues raised in the case and rebuttal briefs
submitted by the GOI, APP/SMG, and Petitioners are addressed in the
Memorandum to Ronald K. Lorentzen, Deputy Assistant Secretary for
Import Administration, ``Issues and Decision Memorandum for Certain
Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed
Presses from Indonesia: Final Affirmative Countervailing Duty
Determination'' (September 20, 2010) (hereafter referred to as the
``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 this public memorandum in the Department's
Central Records Unit, located in Room 7046 in the main Commerce
building. In addition, a complete version of the Decision Memorandum
can be accessed directly on the Internet at http://ia.ita.doc.gov/ia-highlights-and-news.html or http://ia.ita.doc.gov/frn/. The paper copy
and
[[Page 59211]]
electronic version of the Decision Memorandum are identical in content.
Application of Adverse Facts Available
For purposes of this final determination, we relied, in part, on
adverse facts available (AFA), as provided for in sections 776(a) and
(b) of the Act, to determine the countervailable subsidy rate for one
program under investigation. A full discussion of our decision to apply
AFA is presented in the Decision Memorandum in the section
``Application of Facts Otherwise Available.''
Suspension of Liquidation
In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have
calculated an individual rate for APP/SMG. 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 based entirely on AFA under section 776 of the
Act.
------------------------------------------------------------------------
Producer/Exporter Net Subsidy Rate
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PT Pabrik Kertas Tjiwi Kimia, Tbk...................
PT Pindo Deli Pulp and Paper Mills..................
PT Indah Kiat Pulp and Paper, Tbk...................
(i.e., APP/SMG)..................................... 17.94%
All Others.......................................... 17.94%
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Although suspension of liquidation was required on the date of
publication of the Preliminary Determination, we subsequently
instructed U.S. Customs and Border Protection, pursuant to section
703(d) of the Act, to discontinue the suspension of liquidation for
countervailing duty purposes for subject merchandise entered on or
after July 7, 2010, but to continue the suspension of liquidation of
entries made on or after March 9, 2010 (the publication date of the
Preliminary Determination) through July 6, 2010.
If the ITC issues a final affirmative injury determination, we will
issue a countervailing duty order and continue with the suspension of
liquidation under section 706(a) of the Act. We will then require a
cash deposit of estimated countervailing duties for entries of subject
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 duties deposited or
securities posted as a result of the suspension of liquidation will be
refunded or canceled.
ITC Notification
In accordance with section 705(d) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all non-privileged and non-proprietary information related to this
investigation. We will allow the ITC access to all privileged and
business proprietary information in our files, provided the ITC
confirms that it will not disclose such information, either publicly or
under an Administrative Protective Order (APO), without the written
consent of the Assistant Secretary for Import Administration.
Return or Destruction of Proprietary Information
In the event that the ITC issues a final negative injury
determination, this notice will serve as the only reminder to parties
subject to an 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 issued and published pursuant to sections
705(d) and 777(i) of the Act.
Dated: Septmber 20, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
APPENDIX
Issues and Decision Memorandum
I. Summary
II. Background
III. Subsidies Valuation
A. Period of Investigation
B. Allocation Period
C. Discount Rates and Uncreditworthiness
D. Cross-Ownership
E. Attribution of Subsidies Sales Denominator
IV. Application of Facts Otherwise Available
A. APP/SMG Purchased Its Own Debt from the GOI
B. Corroboration
V. Analysis of Programs
A. Programs Determined To Be Countervailable
1. Provision of Standing Timber for Less Than Adequate Remuneration
2. Government Prohibition of Log Exports
3. Debt Forgiveness Through the Indonesian Government's Acceptance
of Financial Instruments with No Market Value
4. Debt Forgiveness Through APP/SMG's Buyback of Its Own Debt from
the Indonesian Government
B. Programs Determined To Have Been Not Used During the Period of
Investigation
1. Government Provision of Interest Free Reforestation Loans
2. Government Forgiveness of Stumpage Obligations
3. Tax Incentives for Investment in Priority Business Lines and
Designated Regions
a. Corporate Income Tax Deduction
b. Accelerated Depreciation and Amortization
c. Extension of Loss Carryforward
d. Reduced Withholding Tax on Dividends
VI. Analysis of Comments
Provision of Standing Timber/Log Export Ban
Comment 1: Whether the Department Should Account for any Volumes of
Timber Determined to have been Harvested Contrary to Indonesian Law in
its Benefit Calculations
Comment 2: Whether the Department Should Adjust APP/SMG's Reported
Harvest Based on its Verification Findings
Comment 3: Whether the Department Should Use the GOI Conversion Factor
Study for Conversion Ratios
Comment 4: Whether the Department has Assumed the Existence of
Distortive Effects Due to the Log Export Ban
Log Benchmarks
Comment 5: Whether Export Prices to Indonesia Should be Used as the
Basis for Benchmark Calculations
Comment 6: Whether Specific Export Transactions Provided by Respondents
are an Appropriate Starting Point for Calculating a Benchmark
Comment 7: Whether the Sabah Export Data Provides an Appropriate
Starting Point for Calculating a Benchmark
Comment 8: Whether Other Data on the Record Provides an Appropriate
Starting Point for Calculating a Benchmark
Comment 9: Whether the AUV from the WTA Should be Used Only as a
Fallback when More Specific Information is not Available
Comment 10: Whether the Department Should Make an Adjustment to
Reported Export Quantities from Malaysia in the WTA Data
[[Page 59212]]
Comment 11: Whether Certain HTS numbers Should Be Excluded from WTA
Statistics
Comment 12: The Department Should Ensure that its Benchmark for the Log
Export Ban Program Captures the Full Price an Indonesian Firm Would Pay
for Imported Pulp Logs
Comment 13: Whether the Department Should Use Monthly Malaysian
Exchange Rates to Convert the Monthly Malaysian Export Statistics used
as Benchmarks
Comment 14: Whether the Department Should Round the Malaysian Export
Statistics
Comment 15: Whether the Department Should Use the GOI Study of
Operating Costs in Indonesia to Adjust the Benchmark for the Provision
of Standing Timber
Debt Forgiveness
Comment 16: Whether the Department Should Apply AFA Regarding Debt
Forgiveness through APP/SMG's Buyback of its Own Debt
Comment 17: Whether Commerce's Decision to Cancel the Verification of
the IBRA Debt Sale Was Improper
Comment 18: Whether the Department Should Apply the Highest Rate
Calculated for any Other Program as AFA Regarding the APP/SMG Debt
Buyback Allegation
Comment 19: Whether the Department Should Adjust the Benefit
Calculation Regarding the APP/SMG Debt Buyback Program
Comment 20: Whether the Department Should Revise the Interest Rate Used
to Calculate the Discount Rate Used for Calculating APP/SMG's Allocable
Subsidies
Other
Comment 21: Whether the Department Should Countervail SPA's Outstanding
DR Fees as an Interest-Free Loan
VII. Recommendation
[FR Doc. 2010-24182 Filed 9-24-10; 8:45 am]
BILLING CODE 3510-DS-S