[Federal Register Volume 76, Number 81 (Wednesday, April 27, 2011)]
[Notices]
[Pages 23564-23568]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10211]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-976]
Galvanized Steel Wire From the People's Republic of China:
Initiation of Countervailing Duty Investigation
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
DATES: Effective Date: April 27, 2011.
FOR FURTHER INFORMATION CONTACT: Nicholas Czajkowski or David Lindgren,
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-
1395 or (202) 482-3870, respectively.
SUPPLEMENTARY INFORMATION:
The Petition
On March 31, 2011, the Department of Commerce (the Department)
received a countervailing duty (CVD) petition concerning imports of
galvanized steel wire from the People's Republic of China (PRC) filed
in proper form by Davis Wire Corporation, Johnstown Wire Technologies,
Inc., Mid-South Wire Company, Inc., National Standard, LLC, and
Oklahoma Steel & Wire Company, Inc. (Petitioners), domestic producers
of galvanized steel wire. See ``Petition for the Imposition of
Countervailing Duties on Galvanized Steel Wire from the People's
Republic of China'' (CVD Petition). On April 6, 2011, the Department
requested additional information and clarification of certain areas of
the CVD Petition involving the subsidy allegations. On the same day we
issued a separate set of requests for information regarding the scope,
industry support, and injury sections of the CVD Petition and the
accompanying antidumping petitions for Mexico and the PRC. Petitioners
filed timely, separate responses to these questionnaires on April 11,
2011 (First Supplement to the CVD Petition and Supplement to the AD/CVD
Petitions, respectively). On April 12, 2011, the Department issued a
second set of questions regarding general issues, injury information
and antidumping-specific topics. On April 14, 2011, Petitioners filed
timely responses to the April 12, 2011 questionnaires (Second
Supplement to the AD/CVD Petitions). On April 12, 2011, the Department
requested additional information regarding the CVD Petition. See Memo
to the File from Mark E. Hoadley, Program Manager, AD/CVD Operations,
[[Page 23565]]
Office 6, Import Administration ``Telephone Conversation with Counsel
for Petitioners: Countervailing Duty Investigation on Galvanized Steel
Wire from the People's Republic of China,'' dated April 12, 2011. On
April 15, 2011, Petitioners filed timey responses to the April 12, 2011
request (Second Supplement to the CVD Petition). In addition
Petitioners provided the Department with an additional required
certification on April 15, 2011. See Certification Letter filed April
15, 2011.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as
amended (the Act), Petitioners allege that producers/exporters of
galvanized steel wire in the PRC received countervailable subsidies
within the meaning of sections 701 and 771(5) of the Act, and that
imports from these producers/exporters materially injure, or threaten
material injury to, an industry in the United States.
The Department finds that Petitioners filed the CVD Petition on
behalf of the domestic industry because they are an interested party as
defined in section 771(9)(C) of the Act and the Petitioners have
demonstrated sufficient industry support with respect to the CVD
investigation that they are requesting the Department initiate (see
``Determination of Industry Support for the Petition'' below).
Period of Investigation
The period of investigation (POI) is calendar year 2010, i.e.,
January 1, 2010, through December 31, 2010. See 19 CFR 351.204(b)(2).
Scope of Investigation
The products covered by this investigation are galvanized steel
wire from the PRC. For a full description of the scope of the
investigation, please see the ``Scope of the Investigation,'' Appendix
to this notice.
Comments on Scope of Investigation
During our review of the CVD Petition, we discussed the scope with
Petitioners to ensure that it is an accurate reflection of the products
for which the domestic industry is seeking relief. Moreover, as
discussed in the preamble to the regulations (Antidumping Duties;
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)),
we are setting aside a period for interested parties to raise issues
regarding product coverage. The Department encourages all interested
parties to submit such comments by May 10, 2011, twenty calendar days
from the signature date of this notice. All comments must be filed on
the records of the China and Mexico antidumping duty investigations as
well as the China countervailing duty investigation. Comments should be
addressed to Import Administration's APO/Dockets Unit, Room 1870, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230. The period of scope consultations is intended to
provide the Department with ample opportunity to consider all comments
and to consult with parties prior to the issuance of the preliminary
determinations.
Consultations
Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department
held consultations with the Government of the PRC (GOC) with respect to
the CVD Petition on April 14, 2011. See Memorandum to the File, dated
April 15, 2011, ``Consultations with Officials from the Government of
the People's Republic of China on the Countervailing Duty Petitions
regarding Steel Wheels and Galvanized Steel Wire'' a public document on
file in the Central Records Unit (CRU), Room 7046 of the main
Department of Commerce building.
Determination of Industry Support for the Petition
Section 702(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 702(c)(4)(A) of the Act
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (i) At least
25 percent of the total production of the domestic like product; and
(ii) more than 50 percent of the production of the domestic like
product produced by that portion of the industry expressing support
for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of
the Act provides that, if the petition does not establish support of
domestic producers or workers accounting for more than 50 percent of
the total production of the domestic like product, the Department
shall: (i) Poll the industry or rely on other information in order to
determine if there is support for the petition, as required by
subparagraph (A), or (ii) determine industry support using a
statistically valid sampling method to poll the ``industry.''
Section 771(4)(A) of the Act defines the ``industry'' as the
producers as a whole of a domestic like product. Thus, to determine
whether a petition has the requisite industry support, the statute
directs the Department to look to producers and workers who produce the
domestic like product. The International Trade Commission (ITC), which
is responsible for determining whether ``the domestic industry'' has
been injured, must also determine what constitutes a domestic like
product in order to define the industry. While both the Department and
the ITC must apply the same statutory definition regarding the domestic
like product (section 771(10) of the Act), they do so for different
purposes and pursuant to a separate and distinct authority. In
addition, the Department's determination is subject to limitations of
time and information. Although this may result in different definitions
of the like product, such differences do not render the decision of
either agency contrary to law. See USEC, Inc. v. United States, 132 F.
Supp. 2d 1, 8 (Ct. Int'l Trade 2001), citing Algoma Steel Corp., Ltd.
v. United States, 688 F. Supp. 639, 644 (Ct. Int'l Trade 1988), aff'd
865 F.2d 240 (Fed. Cir. 1989), cert. denied 492 U.S. 919 (1989).
Section 771(10) of the Act defines the domestic like product as ``a
product which is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this title.'' Thus, the reference point from which the domestic
like product analysis begins is ``the article subject to an
investigation'' (i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition).
With regard to the domestic like product, Petitioners do not offer
a definition of domestic like product distinct from the scope of the
investigation. Based on our analysis of the information submitted on
the record, we have determined that galvanized steel wire constitutes a
single domestic like product and we have analyzed industry support in
terms of that domestic like product. For a discussion of the domestic
like product analysis in this case, see ``Countervailing Duty
Investigation Initiation Checklist: Galvanized Steel Wire from the
People's Republic of China'' (CVD Initiation Checklist), at Attachment
II, ``Analysis of Industry Support for the Petitions Covering
Galvanized Steel Wire from the People's Republic of China,'' on file in
the Central Records Unit (CRU), Room 7046 of the main Department of
Commerce building.
In determining whether Petitioners have standing under section
702(c)(4)(A) of the Act, we considered the industry support data
contained in the CVD Petition with reference to the domestic like
product as defined in the ``Scope of the Investigation'' Appendix to
this notice. To establish industry support, Petitioners provided their
own 2010 production of the domestic like
[[Page 23566]]
product, and compared this to the estimated total production of the
domestic like product for the entire domestic industry. See Volume I of
the Petitions, at I-3 through I-5, and Exhibits I-1 through I-5;
Supplement to the AD/CVD Petitions, dated April 11, 2011, at 1, 7 and
Exhibit Supp-I-7; Second Supplement to the AD/CVD Petitions, dated
April 14, 2011, at 2, and Exhibit 2; and Second Revised Exhibit I-1;
see also CVD Initiation Checklist at Attachment II.
On April 14, 2011, we received an industry support challenge from a
Mexican producer of galvanized steel wire and its U.S. affiliate. See
Letter from Deacero, titled ``Galvanized Steel Wire from Mexico--
Comments on Industry Support,'' dated April 14, 2011.\1\ This
submission was placed on the record of the CVD Petition on April 18,
2011. See Letter from Petitioners, titled ``Petitioners' Response to
Question about U.S. industry,'' dated April 18, 2011. Petitioner
responded to this submission on April 18, 2011. Our review of the data
provided in the CVD Petition, supplemental submissions, and other
information readily available to the Department indicates that
Petitioners have established industry support. See CVD Initiation
Checklist at Attachment II. First, the CVD Petition established support
from domestic producers (or workers) accounting for more than 50
percent of the total production of the domestic like product and, as
such, the Department is not required to take further action in order to
evaluate industry support (e.g., polling). See section 702(c)(4)(D) of
the Act; see also CVD Initiation Checklist at Attachment II. Second,
the domestic producers (or workers) have met the statutory criteria for
industry support under section 702(c)(4)(A)(i) of the Act because the
domestic producers (or workers) who support the CVD Petition account
for at least 25 percent of the total production of the domestic like
product. See CVD Initiation Checklist at Attachment II. Finally, the
domestic producers (or workers) have met the statutory criteria for
industry support under section 702(c)(4)(A)(ii) of the Act because the
domestic producers (or workers) who support the CVD Petition account
for more than 50 percent of the production of the domestic like product
produced by that portion of the industry expressing support for, or
opposition to, the CVD Petition. Accordingly, the Department determines
that the CVD Petition was filed on behalf of the domestic industry
within the meaning of section 702(b)(1) of the Act. See CVD Initiation
Checklist at Attachment II.
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\1\ On April 18, 2011, the Department placed Deacero's filing on
the records of the AD and CVD petitions concerning the PRC. See
Memorandum to the File from Norbert Gannon, Office of Policy,
entitled, Petitions for the Imposition of Antidumping Duties on
Imports of Galvanized Steel Wire from the People's Republic of China
(the PRC) and Mexico and Countervailing Duties on Imports of
Galvanized Steel Wire from the PRC--Deacero S.A. de C.V.'s April 14,
2011, Letter to the Department of Commerce.
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The Department finds that Petitioners filed the CVD Petition on
behalf of the domestic industry because they are an interested party as
defined in sections 771(9)(C) of the Act and have demonstrated
sufficient industry support with respect to the CVD investigation that
they are requesting the Department initiate. See CVD Initiation
Checklist at Attachment II.
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 ITC must determine
whether imports of subject merchandise from the PRC materially injure,
or threaten material injury to, a U.S. industry.
Allegations and Evidence of Material Injury and Causation
Petitioners allege that imports of galvanized steel wire from the
PRC are benefitting from countervailable subsidies and that such
imports are causing, or threatening to cause, material injury to the
domestic industry producing galvanized steel wire. In addition,
Petitioners allege that subsidized imports exceed the negligibility
threshold provided for under section 771(24)(A) of the Act.
Petitioners contend that the industry's injured condition is
illustrated by reduced market share, lost sales and revenues, reduced
production, reduced shipments, reduced capacity utilization rate,
underselling and price depression and suppression, reduced workforce,
decline in financial performance, and an increase in import
penetration. We have assessed the allegations and supporting evidence
regarding material injury, threat of material injury, and causation,
and we have determined that these allegations are properly supported by
adequate evidence and meet the statutory requirements for initiation.
See CVD Initiation Checklist at Attachment III.
Initiation of Countervailing Duty Investigation
Section 702(b)(1) of the Act requires the Department to initiate a
CVD proceeding whenever an interested party files a CVD petition on
behalf of an industry that: (1) Alleges the elements necessary for an
imposition of a duty under section 701(a) of the Act; and (2) is
accompanied by information reasonably available to the petitioners
supporting the allegations.
The Department has examined the CVD Petition on galvanized steel
wire from the PRC and finds that it complies with the requirements of
section 702(b)(1) of the Act. Therefore, in accordance with section
702(b)(1) of the Act, we are initiating a CVD investigation to
determine whether producers/exporters of galvanized steel wire in the
PRC receive countervailable subsidies. For a discussion of evidence
supporting our initiation determination, see CVD Initiation Checklist.
We are including in our investigation the following programs
alleged in the CVD Petition to provide countervailable subsidies to
producers/exporters of the subject merchandise.
A. Preferential Loans and Interest Rates
1. Policy Loans to the Galvanized Steel Wire Industry
2. Preferential Loans for Key Projects and Technologies
3. Preferential Loans and Directed Credit
4. Preferential Lending to GSW Producers and Exporters Classified
as ``Honorable Enterprises''
5. Loans and Interest Subsidies Provided Pursuant to the Northeast
Revitalization Program
B. Government Provision of Inputs for Less than Adequate Remuneration
(LTAR)
1. Provision of Wire Rod for LTAR
2. Provision of Zinc for LTAR
3. Provision of Land Use Rights for LTAR
a. Provision of Land Use Rights for LTAR within the Jinzhou
District within the City of Dalian
b. Provision of Land Use Rights for LTAR to Enterprises within the
Zhaoqing High-Tech Industry Development Zone in Guangdong Province
c. Provision of Land Use Rights for LTAR to Enterprises within the
South Sanshui Science and Technology Industrial Park of Foshan City
4. Provision of Electricity for LTAR
C. Income and Other Direct Taxes
1. Income Tax Credits for Domestically-Owned Companies Purchasing
Domestically-Produced Equipment
2. Income Tax Exemption for Investment in Domestic Technological
Renovation
[[Page 23567]]
3. Accelerated Depreciation for Enterprises Located in the
Northeast Region
4. Forgiveness of Tax Arrears for Enterprises in the Old Industrial
Bases of Northeast China
5. Income Tax Exemption for Investors in Designated Geographical
Regions within Liaoning Province
D. Indirect Tax and Tariff Exemption Programs
1. VAT Deduction on Fixed Assets
2. Export Subsidies Characterized as ``VAT Rebates''
3. Import Tariff and VAT Exemptions for Foreign Invested
Enterprises and Certain Domestic Enterprises Using Imported Equipment
in Encouraged Industries
4. Reduction in or Exemption from Fixed Assets Investment
Orientation Regulatory Tax
E. Grant Programs
1. ``Five Points, One Line'' Program of Liaoning Province
2. Provincial Export Interest Subsidies
3. State Key Technology Project Fund
4. Export Assistance Grants
5. Subsidies for Development of Famous Export Brands and China
World Top Brands
6. Sub-Central Government Programs to Promote Famous Export Brands
and China World Top Brands
7. Zhejiang Province Program to Rebate Antidumping Legal Fees
8. Technology to Improve Trade Research and Development Fund of
Jiangsu Province
9. Outstanding Growth Private Enterprise and Small and Medium-Sized
Enterprises Development in Jiangyin Fund of Jiangyin City
10. Grants for Programs Under the 2007 Science and Technology
Development Plan in Shandong Province
11. Special Funds for Encouraging Foreign Economic and Trade
Development and for Drawing Significant Foreign Investment Projects in
Shandong Province
F. Preferential Tax Subsidies for FIEs
1. ``Two Free, Three Half'' Tax Exemptions for ``Productive'' FIEs
2. Income Tax Exemption Program for Export-Oriented FIEs
3. Local Income Tax Exemption and Reduction Programs for
``Productive'' FIEs
4. Preferential Tax Programs for FIEs Recognized as High or New
Technology Enterprises
5. Income Tax Subsidies for FIEs Based on Geographic Location
6. VAT Refunds for FIEs Purchasing Domestically-Produced Equipment
7. Income Tax Credits for FIEs Purchasing Domestically-Produced
Equipment
8. Exemption from City Construction Tax and Education Fee for FIEs
For a description of each of these programs and a full discussion
of the Department's decision to initiate an investigation of these
programs, see CVD Initiation Checklist.
We are not including in our investigation the following programs
alleged to benefit producers/exporters of the subject merchandise in
the PRC.
1. Export Loans from Policy Banks and State-Owned Commercial Banks
(SOCBs)
2. Government Restraints on Exports of Raw Materials: Wire Rod
3. Government Restraints on Exports of Raw Materials: Zinc
4. Tax Reduction for Enterprises Making Little Profit
5. Provincial Fund for Fiscal and Technological Innovation
6. International Market Exploration Fund (SME Fund)
7. Funds for Water Treatment and Pollution Control Projects for the
Three Rivers and Three Lakes in Shandong Province
8. Undervaluation of Chinese Currency
For further information explaining why the Department is not
initiating an investigation of these programs, see CVD Initiation
Checklist.
Respondent Selection
For this investigation, the Department intends to select
respondents based on U.S. Customs and Border Protection (CBP) data for
U.S. imports during the POI. We intend to release the CBP data under
Administrative Protective Order (APO) to all parties with access to
information protected by APO within five days of the announcement of
the initiation of this investigation. Interested parties may submit
comments regarding the CBP data and respondent selection within seven
calendar days of publication of this notice. We intend to make our
decision regarding respondent selection within 20 days of publication
of this Federal Register notice. Interested parties must submit
applications for disclosure under APO in accordance with 19 CFR
351.305(b). Instructions for filing such applications may be found on
the Department's Web site at http://ia.ita.doc.gov/apo.
Distribution of Copies of the Petition
In accordance with section 702(b)(4)(A)(i) of the Act, copies of
the public versions of the CVD Petition and amendments thereto have
been provided to the GOC. Because of the particularly large number of
producers/exporters identified in the CVD Petition, the Department
considers the service of the public version of the petition to the
foreign producers/exporters satisfied by the delivery of the public
version to the GOC, consistent with 19 CFR 351.203(c)(2).
ITC Notification
We have notified the ITC of our initiation, as required by section
702(d) of the Act.
Preliminary Determination by the ITC
The ITC will preliminarily determine, within 45 days after the date
on which the CVD Petition was filed, whether there is a reasonable
indication that imports of allegedly subsidized galvanized steel wire
from the PRC materially injure, or threaten material injury to, a U.S.
industry. See section 703(a)(2) of the Act. A negative ITC
determination will result in the investigation being terminated. See
section 703(a)(1) of the Act. Otherwise, the investigation will proceed
according to statutory and regulatory time limits.
Notification to Interested Parties
Interested parties must submit applications for disclosure under
administrative protective orders in accordance with 19 CFR 351.305. On
January 22, 2008, the Department published Antidumping and
Countervailing Duty Proceedings: Documents Submission Procedures; APO
Procedures, (73 FR 3634). Parties wishing to participate in these
investigations should ensure that they meet the requirements of these
procedures (e.g., the filing of letters of appearance as discussed at
19 CFR 351.103(d)).
Any party submitting factual information in an AD/CVD proceeding
must certify to the accuracy and completeness of that information. See
section 782(b) of the Act. Parties are hereby reminded that revised
certification requirements are in effect for company/government
officials as well as their representatives in all segments of any AD/
CVD proceedings initiated on or after March 14, 2011. See Certification
of Factual Information to Import Administration During Antidumping and
Countervailing Duty Proceedings: Interim Final Rule, 76 FR 7491
(February 10, 2011) (Interim Final Rule) amending 19 CFR 351.303(g)(1)
and (2). The formats for the revised certifications are provided at the
end of the Interim Final Rule. The Department intends to reject factual
submissions in any proceeding segments initiated on or after March 14,
2011, if the submitting
[[Page 23568]]
party does not comply with the revised certification requirements.
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: April 20, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
Appendix--Scope of the Investigation
The scope of the investigation covers galvanized steel wire which
is a cold-drawn carbon quality steel product in coils, of solid,
circular cross section with an actual diameter of 0.5842 mm (0.0230
inch) or more, plated or coated with zinc (whether by hot-dipping or
electroplating).
Steel products to be included in the scope of the investigation,
regardless of Harmonized Tariff Schedule of the United States
(``HTSUS'') definitions, are products in which: (1) Iron predominates,
by weight, over each of the other contained elements; (2) the carbon
content is two percent or less, by weight; and (3) none of the elements
listed below exceeds the quantity, by weight, respectively indicated:
1.80 percent of manganese, or
1.50 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.02 percent of boron, or
0.10 percent of molybdenum, or
0.10 percent of niobium, or
0.41 percent of titanium, or
0.15 percent of vanadium, or
0.15 percent of zirconium.
The products subject to the investigation are currently classified
in subheadings 7217.20.30 and 7217.20.45 of the HTSUS which cover
galvanized wire of all diameters and all carbon content. Galvanized
wire is reported under statistical reporting numbers 7217.20.3000,
7217.20.4510, 7217.20.4520, 7217.20.4530, 7217.20.4540, 7217.20.4550,
7217.20.4560, 7217.20.4570, and 7217.20.4580. These products may also
enter under HTSUS subheadings 7229.20.0015, 7229.90.5008, 7229.90.5016,
7229.90.5031, and 7229.90.5051. Although the HTSUS subheadings are
provided for convenience and Customs purposes, the written description
of the merchandise is dispositive.
[FR Doc. 2011-10211 Filed 4-26-11; 8:45 am]
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