[Federal Register Volume 74, Number 211 (Tuesday, November 3, 2009)]
[Notices]
[Pages 56796-56805]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-26318]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-948]
Certain Steel Grating from the People's Republic of China:
Preliminary Affirmative Countervailing Duty Determination and Alignment
of Final Countervailing Duty Determination with Final Antidumping 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 certain steel grating (CSG) from the
People's Republic of China (PRC). For information on the estimated
subsidy rates, see the ``Suspension of Liquidation'' section of this
notice.
EFFECTIVE DATE: November 3, 2009.
FOR FURTHER INFORMATION CONTACT: Sean Carey or Justin Neuman, 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-
3964 and (202) 482-0486, respectively.
SUPPLEMENTARY INFORMATION:
Case History
The following events have occurred since the publication of the
Department's notice of initiation in the Federal Register. See Certain
Steel Grating From the People's Republic of China: Initiation of
Countervailing Duty Investigation, 74 FR 30278 (June 25, 2009)
(Initiation Notice).
On July 17, 2009, due to the large number of producers and
exporters of certain steel grating in the PRC, we determined that it
would not be possible to investigate individually each known exporter
or producer. Therefore, based on data from U.S. Customs and Border
Protection (CPB), and in accordance with section 777A(e)(2)(A)(ii) of
the Tariff Act of 1930, as amended (the Act), the Department selected
as mandatory respondents the two largest Chinese producers/exporters of
steel grating that could reasonably be examined, Ningbo Jiulong
Machinery Manufacturing Co., Ltd. (Ningbo Jiulong) and United Steel
Structures Ltd. (USSL). See Memorandum to John M. Andersen, Acting
Deputy Assistant Secretary for Antidumping and Countervailing Duty
Operations, ``Countervailing Duty Investigation: Certain Steel Grating
(CSG) from the People's Republic of China (PRC)'' (July 17, 2009)
(Respondent Selection Memorandum). A public version of this memorandum
is on file in the Department's Central Records Unit (CRU) in Room 1117
of the main Department building. On July 20, 2009, we issued CVD
questionnaires to the Government of the People's Republic of China
(GOC), to Ningbo Jiulong, and to USSL.
At the request of Alabama Metal Industries Corp. and Fisher and
Ludlow (collectively, Petitioners), on August 10, 2009, the Department
postponed the preliminary determination of this investigation until
October 26, 2009. See Certain Steel Grating from the People's Republic
of China: Postponement of Preliminary Determination in the
Countervailing Duty Investigation, 74 FR 39921 (August 10, 2009). We
received responses from the GOC and both mandatory respondent companies
on September 9, 2009. We issued a supplemental questionnaire to the GOC
on September 30, 2009, and to Ningbo Jiulong on October 1, 2009. After
providing extensions of the due date for these questionnaire responses
to the GOC and Ningbo, timely responses were submitted by the GOC on
October 15, 2009, and by Ningbo Jiulong on October 13 and 15, 2009.
On July 13, 2009, Petitioners submitted new subsidy allegations
regarding six programs. On July 20, 2009, the GOC submitted comments on
these allegations. On September 21, 2009, the Department determined to
investigate four of these newly alleged subsidy programs pursuant to
section 775 of the Act. See Memorandum to Barbara E. Tillman, Director
AD/CVD Operations, Office 6, ``Countervailing Duty Investigation of
Certain Steel Grating from the People's Republic of China (PRC):
Initiation Analysis of New Subsidy Allegations'' (September 21, 2009)
(New Subsidy Initiation Memorandum). Questionnaires regarding these
newly alleged subsidies were sent to the GOC and the mandatory
respondent companies on September 21, 2009. The GOC, Ningbo Jiulong,
and USSL submitted responses to the new subsidy allegations
questionnaires on October 15, 2009. On October 20, 2009, Petitioners
provided pre-preliminary comments. On October 21, 2009, the GOC
submitted additional supplemental information. On October 22, 2009,
Petitioners provided comments prior to the preliminary determination.
On October 23, 2009, the GOC provided additional comments.
In its questionnaire response, USSL reported that it does not
produce CSG. USSL does produce and sell large steel structures, for
projects such as power plants, smelters, petrochemical plants and high-
rise buildings, of which CSG is a minor component. The CSG incorporated
into the steel structures that USSL produces and sells is purchased
from an unaffiliated supplier. Based on this information, it appears
that USSL is not one of the two largest producers or exporters of CSG
from the PRC, and that USSL does not produce CSG. Subsequently, on
October 16, 2009, USSL submitted a letter stating that it should not be
considered to be an exporter of CSG for purposes of this investigation.
Also on October 16, 2009, Petitioners filed a letter stating that they
do not object to the deselection of USSL as a mandatory respondent.
Given this unique combination of circumstances, we have
reconsidered the selection of USSL as a respondent in this
investigation. Based on the information provided in USSL's
questionnaire response, the letters from USSL and Petitioners, and the
discretion provided to the Department under section 351.204(c)(1) of
the regulations, we have decided to discontinue the individual
examination of USSL in this investigation. For a detailed discussion of
the bases for this decision, see Memorandum for Ronald K. Lorentzen
from John M. Andersen, ``Countervailing Duty Investigation of Certain
Steel Grating from the People's Republic of China: Whether USSL Should
be Maintained as a Mandatory Respondent,'' dated October 23, 2009.
Alignment of Final Countervailing Duty Determination With Final
Antidumping Duty Determination
On the same day the Department initiated this countervailing duty
investigation, see Initiation Notice, the Department also initiated an
antidumping duty investigation of certain steel gratings from the PRC.
See Certain Steel Grating from the People's Republic of China:
Initiation of Antidumping Duty Investigation, 74 FR 30273 (June 25,
2009). The countervailing duty investigation and the antidumping duty
investigation have the same scope with regard to the merchandise
covered.
On October 23, 2009, in accordance with section 705(a)(1) of the
Act,
[[Page 56797]]
Petitioners requested alignment of the final countervailing duty
determination with the final antidumping duty determination of certain
steel grating from the PRC. Therefore, in accordance with section
705(a)(1) of the Act and 19 CFR 351.210(b)(4), we are aligning the
final countervailing duty determination with the final antidumping duty
determination. Consequently, the final countervailing duty
determination will be issued on the same date as the final antidumping
duty determination, which is currently scheduled to be issued no later
than March 13, 2010, unless postponed.
Scope Comments
In accordance with the Preamble to the Department's regulations
(Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296,
27323 (May 19, 1997)) (CVD Preamble), in our Initiation Notice, 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 that notice. See Initiation Notice, 74
FR at 30279. No such comments were filed on the record of this
investigation.
Scope of the Investigation
The products covered by the investigation are certain steel
grating, consisting of two or more pieces of steel, including load-
bearing pieces and cross pieces, joined by any assembly process,
regardless of: (1) size or shape; (2) method of manufacture; (3)
metallurgy (carbon, alloy, or stainless); (4) the profile of the bars;
and (5) whether or not they are galvanized, painted, coated, clad or
plated. Steel grating is also commonly referred to as ``bar grating,''
although the components may consist of steel other than bars, such as
hot-rolled sheet, plate, or wire rod.
The scope of the investigation excludes expanded metal grating,
which is comprised of a single piece or coil of sheet or thin plate
steel that has been slit and expanded, and does not involve welding or
joining of multiple pieces of steel. The scope of the investigation
also excludes plank type safety grating which is comprised of a single
piece or coil of sheet or thin plate steel, typically in thickness of
10 to 18 gauge, that has been pierced and cold formed, and does not
involve welding or joining of multiple pieces of steel.
Certain steel grating that is the subject of the investigation is
currently classifiable in the Harmonized Tariff Schedule of the United
States (HTSUS) under subheading 7308.90.7000. While the HTSUS
subheading is provided for convenience and customs purposes, the
written description of the scope of the investigation is dispositive.
Injury Test
Because the PRC is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Act, the International Trade
Commission (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 July 20, 2009, the ITC
published 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 certain steel grating from the PRC. See Certain Steel
Grating From China Determinations, 74 FR 35204 (July 20, 2009); and
Certain Steel Grating from China (Preliminary), USITC Pub. 4087, Inv.
Nos. 701-TA-465 and 731-TA-1161 (July 2009).
Application of the Countervailing Duty Law to Imports from the PRC
On October 25, 2007, the Department published Coated Free Sheet
Paper from the People's Republic of China: Final Affirmative
Countervailing Duty Determination, 72 FR 60645 (October 25, 2007) (CFS
from the PRC), and the accompanying Issues and Decision Memorandum (CFS
Decision Memorandum). In CFS from the PRC, the Department found that,
``given the substantial differences between the Soviet-style economies
and the PRC'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 the {PRC{time} .'' See CFS Decision Memorandum, at
Comments 1 and 6.
The Department has subsequently affirmed its decision to apply the
CVD law to the PRC, most recently in Certain Kitchen Shelving and Racks
from the People's Republic of China: Final Affirmative Countervailing
Duty Determination, 74 FR 37012 (July 27, 2009) (Shelving and Racks
from the PRC), and the accompanying Issues and Decision Memorandum
(Shelving and Racks Decision Memorandum).
Additionally, for the reasons stated in the Shelving and Racks
Decision Memorandum, we are using the date of December 11, 2001, the
date on which the PRC became a member of the World Trade Organization,
as the date from which the Department will identify and measure
subsidies in the PRC for purposes of this preliminary determination.
See Shelving and Racks Decision Memorandum, at Comment 3.
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.
Subsidies Valuation Information
Cross-Ownership
In its September 9, 2009 questionnaire response, Ningbo Jiulong
reported that it is cross-owned with its affiliated supplier of twisted
wire rod, Ningbo Zhenhai Jiulong Electronic Equipment Factory (JEE).
Ningbo Jiulong reported that it purchases twisted wire rod only from
JEE. The information provided by JEE shows that it sells nearly all of
its production to Ningbo Jiulong. The two operations are co-located on
the same premises, however, they are separately incorporated and share
no common ownership. Ningbo Jiulong reported that it is a privately
owned enterprise, while JEE is identified as a collectively owned
enterprise (COE) under the authority of the Civil Affairs Bureau
Zhenhai Ningbo. The sole ``legal representative'' of JEE is also
reported as being in charge of its full operation, and is a shareholder
in Ningbo Jiulong.
Ningbo Jiulong claims that it is able to use or direct the
individual assets of JEE in essentially the same ways it can use its
own assets, and thus meets the criteria for cross-ownership within the
meaning of 19 CFR 351.525(b)(6)(vi). However, the information and
supporting documentation submitted by Ningbo are not sufficient to
support a finding that the legal representative is in a position to
control Ningbo Jiulong as well as JEE. Nor has Ningbo Jiulong
demonstrated that a private individual can control a government entity,
such as a COE. Absent such information, we must preliminarily
determine, contrary to Ningbo Jiulong's contentions, that the
regulatory requirements for cross ownership have not been met, i.e.,
that one company can use and control the assets of another company as
its own. That Ningbo Jiulong is a privately owned company, while JEE is
a COE that shares no common ownership with Ningbo Jiulong, is further
evidence that Ningbo Jiulong, as a private entity, is not in the
position to control or direct the use of the assets of a government-
owned entity as its own. Therefore, we preliminarily determine that
cross ownership does not exist between Ningbo Jiulong and JEE. As such,
for the purposes of this preliminary determination, we are only
examining subsidies provided to Ningbo Jiulong,
[[Page 56798]]
exclusive of any subsidies provided to JEE.
Application of Facts Otherwise Available and Adverse Inferences
Sections 776(a)(1) and (2) of the Act provide that the Department
shall apply ``facts otherwise available'' if 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.
In the instant investigation, Ningbo Jiulong identified the
producers of the hot-rolled steel input that Ningbo Jiulong used in the
manufacture of the subject merchandise, but failed to provide
information related to whether several of the producers were private or
government- owned. The Department's original questionnaire instructed
Ningbo Jiulong and the GOC to coordinate in identifying the producers
of hot-rolled steel as private or government-owned. We attempted twice
to solicit this information from the GOC, in both the original
questionnaire and the supplemental questionnaire that was issued on
September 29, 2009.
In the instant investigation, Ningbo Jiulong and the GOC withheld
requested information and significantly impeded this proceeding.
Specifically, Ningbo Jiulong and the GOC failed to respond to requests
for information concerning certain of the producers of hot-rolled
steel. Thus, in reaching our preliminary determination, pursuant to
sections 776(a)(2)(A) and (C) of the Act, we have determined, based on
facts otherwise available, to treat these producers as state-owned
enterprises for the purpose of identifying and measuring the
countervailable subsidy rate from the GOC provision of hot-rolled steel
for less than adequate remuneration.
As noted above, the GOC also failed to provide requested
information about the amount of production and consumption of hot-
rolled steel or coils represented by state-owned companies. In light of
this, we preliminarily determine that the GOC has not acted to the best
of its ability to provide the information needed for this investigation
and, hence, has failed to cooperate. Consequently, an adverse inference
is warranted in the application of facts available. As adverse facts
available (AFA), we are assuming that the GOC's dominance of the market
in the PRC for this input results in significant distortion of the
prices and, hence, that use of an external benchmark is warranted.
The Department's practice when selecting an adverse rate from among
the possible sources of information is to ensure that the result is
sufficiently adverse ``as to effectuate the statutory purposes of the
adverse facts available rule to induce respondents to provide the
Department with complete and accurate information in a timely manner.''
See Notice of Final Determination of Sales at Less than Fair Value:
Static Random Access Memory Semiconductors From Taiwan, 63 FR 8909,
8932 (February 23, 1998). The Department's practice also ensures ``that
the party does not obtain a more favorable result by failing to
cooperate than if it had cooperated fully.'' See Statement of
Administrative Action (SAA) accompanying the Uruguay Round Agreements
Act, H. Doc. No. 316, 103d Cong., 2d Session (1994), at 870.
Section 776(c) of the Act provides that, when the Department relies
on secondary information rather than on information obtained in the
course of an investigation or review, it shall, to the extent
practicable, corroborate that information from independent sources that
are reasonably at its disposal. Secondary information is ``information
derived from the petition that gave rise to the investigation or
review, the final determination concerning the subject merchandise, or
any previous review under section 751 concerning the subject
merchandise.'' See e.g., SAA, at 870. The Department considers
information to be corroborated if it has probative value. See id. To
corroborate secondary information, the Department will, to the extent
practicable, examine the reliability and relevance of the information
to be used. The SAA emphasizes, however, that the Department need not
prove that the selected facts available are the best alternative
information. See SAA, at 869.
To corroborate the Department's treatment of the companies that
produced the hot-rolled steel purchased by the mandatory respondent as
authorities and our finding that the GOC dominates the domestic market
for this input, we are relying on Circular Welded Carbon Quality Steel
Line Pipe from the People's Republic of China: Final Affirmative
Countervailing Duty Determination, 73 FR 70961 (November 24, 2008)
(Line Pipe from the PRC). In that case, the Department determined that
the GOC owned or controlled the entire hot-rolled steel industry in the
PRC. See Line Pipe from the PRC and accompanying Issues and Decision
Memorandum at Comment 1. Because there is no information available on
this record to rebut that finding, we determine that the adverse
inference we are applying with regard to the hot-rolled steel industry
is corroborated to the extent practicable as require by the Act.
Analysis of Programs
Based upon our analysis of the petition and the responses to our
questionnaires, we determine the following:
I. Programs Preliminarily Determined to Be Countervailable
A. Government Provision of Hot-Rolled Steel for Less than Adequate
Remuneration
As discussed under ``Application of Facts Otherwise Available and
Adverse Inferences,'' above, for purposes of this preliminary
determination, we are relying on ``adverse facts available,'' in part,
for our analysis regarding the GOC's provision of hot-rolled steel to
producers of certain steel grating. First, as a result of the GOC's
decision not to provide the requested ownership information for certain
of the companies that produced the hot-rolled steel input purchased by
Ningbo Jiulong during the POI, we are treating these hot-rolled steel
producers as ``authorities'' within the meaning of section 771(5)(B) of
the Act. Therefore, we preliminarily determine that Ningbo Jiulong has
received a financial contribution from these companies that produced
the hot-;rolled steel input purchased by Ningbo Jiulong during the POI,
in the form of the provision of a good within the meaning of section
771(5)(D)(iii) of the Act. For certain other producers of the hot-
rolled steel input purchased by Ningbo during the POI, the GOC has
provided some information and documentation which indicates that they
are privately owned. Therefore, for purposes of the preliminary
determination, we are finding these producers to be privately owned.
However, the GOC has not provided all of the requested supporting
documentation for these companies. We intend to provide the GOC a final
opportunity to submit documentation (e.g., capital verification reports
and articles of association) necessary to
[[Page 56799]]
demonstrate definitively that during the entire POI these companies
were privately owned. If necessary information is not available, the
Department may apply ``facts otherwise available,'' in accordance with
section 776 of the Act.
The basis for identifying appropriate market-determined benchmarks
for measuring the adequacy of remuneration for government-provided
goods or services is set forth in 19 CFR 351.511(a)(2). 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
Investigation, the preferred benchmark in the hierarchy is an observed
market price from actual transactions within the country under
investigation because such prices generally would be expected to
reflect most closely the prevailing market conditions of the purchaser
under investigation. See Notice of Final Countervailing Duty
Determination and Final Negative Critical Circumstances Determination:
Certain Softwood Lumber Products from Canada, 67 FR 15545 (April 2,
2002) (Softwood Lumber Final) and accompanying Issues and Decision
Memorandum (Softwood Lumber Memorandum) at 36.
Beginning with tier one, the Department must determine whether the
prices from actual sales transactions involving Chinese buyers and
sellers are significantly distorted. As explained in the CVD Preamble:
``Where it is reasonable to conclude that actual transaction prices are
significantly distorted as a result of the government's involvement in
the market, we will resort to the next alternative {tier two{time} in
the hierarchy.'' See CVD Preamble at 65377. The CVD Preamble further
recognizes that distortion can occur when the government provider
constitutes a majority or, in certain circumstances, a substantial
portion of the market.
As explained under ``Application of Facts Otherwise Available and
Adverse Inferences,'' above, we are relying on AFA for purposes of
making a preliminary determination that GOC authorities play a
significant role in the PRC market for hot-rolled steel. Because of the
dominant role played by GOC authorities in the production of hot-rolled
steel, we preliminarily determine that the actual prices charged by
privately owned producers in the PRC for hot-rolled steel during the
POI are not appropriate tier one benchmarks under our regulations. See
Line Pipe from the PRC at Comment 1.
Consequently, we determine that there are no tier one benchmark
prices available for hot-rolled steel, and we have turned to a tier-two
hot-rolled steel benchmark, i.e., world market prices available to
purchasers in the PRC under 19 CFR 351.511(a)(2)(ii). Petitioners
provided ``Steel Benchmarker'' price data for hot-rolled steel. See
Petition for the Imposition of Antidumping and Countervailing Duties:
Certain Steel Grating from the People's Republic of China, May 29, 2009
(Petition) at Exhibit 77. In addition, we researched world market
prices for hot-rolled steel, and we have placed on the record publicly
available information on world steel prices from an industry
publication, MEPS, during the POI for hot-rolled steel coil. We find
that this is the most appropriate hot-rolled steel input to use based
on the production process reported by Ningbo Jiulong and the 15 Chinese
tariff numbers identified by the GOC under which this input can be
classified. See Exhibit 1 of Ningbo Jiulong's September 10, 2009
questionnaire response; see also GOC's September 14, 2009 questionnaire
response at 17-18. The Department has relied on pricing data from
industry publications such as MEPS in recent CVD proceedings involving
the PRC. See Shelving and Racks Decision Memorandum at 15; see also
Circular Welded Carbon Quality Steel Pipe from the People's Republic of
China: Final Affirmative Countervailing Duty Determination, 73 FR 31966
(CWP from the PRC) and the accompanying Issues and Decision Memorandum
at 11 (CWP Decision Memorandum); see also Light-Walled Rectangular Pipe
and Tube From People's Republic of China: Final Affirmative
Countervailing Duty Investigation Determination, 73 FR 35642 (June 24,
2008) (LWRP from the PRC) and the accompanying Issues and Decision
Memorandum at 9 (LWRP Decision Memorandum). These prices of hot-rolled
steel coil are reported on a monthly basis in U.S. dollars per metric
ton (MT). See Calculation Memorandum for the Preliminary Affirmative
Countervailing Duty Determination; Certain Steel Grating from the
People's Republic of China (Calculation Memorandum) at Attachment 4,
dated concurrently with this notice.
Under 19 CFR 351.511(a)(2)(iv), when measuring the adequacy of
remuneration under tier one or tier two, the Department will adjust the
benchmark price to reflect the price that a firm actually paid or would
pay if it imported the product, including delivery charges and import
duties. Regarding delivery charges, we have included a freight cost
that would be incurred based on the average cost of shipping hot-rolled
steel coils from Europe. We have also added import duties, as reported
by the GOC, and the VAT applicable to imports of hot-rolled steel coils
into the PRC. See Calculation Memorandum at Attachment 4. To determine
the price that constitutes adequate remuneration, we first converted
the monthly MEPS prices for hot-rolled steel coils from U.S. dollars to
RMB using U.S. dollar to RMB exchange rates, as reported by the Federal
Reserve Statistical Release. For each month, we averaged the MEPS
prices and the ``Steel Benchmarker'' prices. We then compared the
monthly price Ningbo Jiulong paid to each supplier that we found to be
an ``authority,'' to the corresponding month's adjusted hot-rolled
steel benchmark price. Comparing the resulting monthly benchmark unit
prices to the monthly average unit prices paid by Ningbo Jiulong for
hot-rolled steel coil produced by the GOC during the POI, we determine
that hot-rolled steel was provided for LTAR and that a benefit exists
in the amount of the difference between the benchmark price and what
the respondent paid for hot-rolled steel coil. See 19 CFR 351.511(a).
Finally, with respect to specificity, although the GOC stated that
the number of industries that purchase hot-rolled steel are ``too
numerous to mention,'' the GOC provided no additional supporting
documentation to substantiate this claim. See GOC's September 15, 2009
questionnaire response at 18. The questionnaire clearly requested that
the GOC provide a list of industries in the PRC that purchase hot-
rolled steel directly. Because the GOC did not provide the requested
information necessary for analyzing specificity, we preliminarily
determine that this subsidy is specific because the recipients are
limited in number. See section 771(5A)(D)(iii)(I) of the Act. See
Shelving and Racks Decision Memorandum at 16. Therefore, we determine
that a countervailable subsidy was conferred on Ningbo Jiulong through
the GOC's provision of hot-rolled steel for LTAR. To calculate the
benefit, we measured the difference between the delivered world market
price and the price Ningbo Jiulong paid for hot-rolled steel produced
by the GOC, on a monthly basis, during the
[[Page 56800]]
POI. See 19 CFR 351.524(c). We divided the total benefit received by
Ningbo Jiulong during the POI by its total sales during the POI. On
this basis, we preliminarily determine the net countervailable subsidy
to be 1.61 percent ad valorem for Ningbo Jiulong.
B. Government Provision of Wire Rod for Less than Adequate
Remuneration
The Department is investigating whether the GOC provided wire rod
to the mandatory respondent for LTAR. Ningbo Jiulong reported that
during the POI, it obtained twisted wire rod from a COE, JEE. The GOC
has identified the 21 Chinese tariff numbers under which wire rod can
be classified and provided a two-page excerpt of the PRC tariff code.
See GOC's September 14, 2009 questionnaire response at 24. The numerous
tariff numbers identified by the GOC provide only a broad
classification of wire rod, and the two-page excerpt does not discuss
or address the tariff numbers used by the GOC to identify wire rod, or
more specifically, twisted wire rod, the type of wire rod purchased by
Ningbo Jiulong. For purposes of this preliminary determination, we are
considering twisted wire rod to be a type of wire rod, and as such, it
is properly included in our investigation of wire rod for LTAR. We will
request additional information from the GOC concerning how and where it
classifies twisted wire rod within the Chinese tariff classification
schedule, and whether twisted wire rod is also classifiable under any
of the reported 21 tariff numbers.
In CWP from the PRC, the Department determined that 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 is less than adequate remuneration. See CWP
Decision Memorandum at 10. Based on the record in the instant
investigation, we preliminarily determine that JEE's status as a COE
falls within the statutory meaning of an ``authority.'' Documentation
from JEE indicates that this company is a COE owned by the Civil
Affairs Bureau Zenhai Ningbo. See JEE's September 9, 2009 questionnaire
response at 4. In the final determination of LWRP from the PRC, the
Department affirmed its decision to treat collectives as government
authorities. See LWRP from the PRC, and the LWRP Decision Memorandum at
Comment 5. Because respondents have not provided information on the
record to indicate that collectively-owned companies are not state-
controlled, and because it appears that Jiulong Factory is owned by a
local government agency (the Civil Affairs Bureau Zhenhai Ningbo), we
find that Jiulong Factory should be classified as an ``authority.'' The
Department will continue to evaluate this finding for the final
determination. As a result, we determine that the wire rod provided by
Ningbo Jiulong's sole supplier, JEE, provides a financial contribution
in the form of a government provision of a good, and that Ningbo
Jiulong received a subsidy to the extent that the price it paid for the
wire rod produced by JEE was for LTAR. See sections 771(5)(D)(iv) and
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 Investigation, the
preferred benchmark in the hierarchy is an observed market price from
actual transactions within the country under investigation because such
prices generally would be expected to reflect most closely the
prevailing market conditions of the purchaser under investigation. See
Softwood Lumber Final and Softwood Lumber Memorandum at 36.
Beginning with tier one, the Department must determine whether the
prices from actual sales transactions involving Chinese buyers and
sellers are significantly distorted. As explained in the CVD Preamble:
``Where it is reasonable to conclude that actual transaction prices are
significantly distorted as a result of the government's involvement in
the market, we will resort to the next alternative {tier two{time} in
the hierarchy.'' See CVD Preamble at 65377. The CVD Preamble further
recognizes that distortion can occur when the government provider
constitutes a majority or, in certain circumstances, a substantial
portion of the market.
In the instant investigation, the GOC reported the total wire rod
production by state-;owned entities during the POI. See GOC
Questionnaire Response at 22-23. The number of these state-owned
entities (SOEs and COEs) accounted for approximately the same
percentage of the wire rod production in the PRC as was recently found
in Shelving and Racks from the PRC, in which the Department determined
that the GOC had direct ownership or control of wire rod production.
See Shelving and Racks Decision Memorandum, at Comment 4. Because the
GOC has not provided any information that would lead the Department to
reconsider the determination in Shelving and Racks from the PRC, we
find that the substantial market share held by SOEs shows that the
government plays a predominant role in the this market. See Shelving
and Racks Decision Memorandum at 15. The government's predominant
position is further demonstrated by the low level of imports, which
accounted for only 0.91 percent of the volume of wire rod available in
the Chinese market during the POI. See GOC's September 15, 2009
questionnaire response at 23. Because the share of imports of wire rod
into the PRC is small relative to Chinese domestic production of wire
rod, it would be inappropriate to use import values to calculate a
benchmark. This is consistent with the Department's approach discussed
in LWRP Decision Memorandum, at Comment 7.
In addition to the government's predominant role in the market, we
found in Shelving and Racks from the PRC that the 10 percent export
tariff and export licensing requirement instituted by the GOC
contributed to the distortion of the domestic market in the PRC for
wire rod. Such export restraints can discourage exports and increase
the supply of wire rod in the domestic market, with the result that
domestic prices are lower than they would otherwise be. See Shelving
and Racks Decision Memorandum at 15.
Consequently, we determine that there are no tier one benchmark
prices available for wire rod, and we have turned to a tier-two wire
rod benchmark, i.e., world market prices available to purchasers in the
PRC under 19 CFR 351.511(a)(2)(ii). Petitioners provided price data
from the ``Steel Business Briefing,'' see, Petition at Exhibit 77. In
addition, we researched world market prices for wire rod, and we have
placed on the record publicly available world steel prices from MEPS
during the POI for steel wire rod. We note that the Department has
relied on pricing data from industry publications such as MEPS in
recent CVD proceedings involving the PRC. See Shelving and Racks from
the PRC at 15;
[[Page 56801]]
see also CWP from the PRC and CWP Decision Memorandum at 20; see also
LWRP Decision Memorandum at 9. The steel wire rod prices are reported
on a monthly basis in U.S. dollars per metric ton (MT). See Calculation
Memorandum at Attachment 6.
To determine the price that constitutes adequate remuneration, we
first converted the monthly MEPS prices for steel wire rod from U.S.
dollars to RMB using U.S. dollar to RMB exchange rates, as reported by
the Federal Reserve Statistical Release. Because Ningbo Jiulong's wire
rod purchases were reported as one aggregate number comprising all
purchases made during the POI, we averaged the monthly MEPS prices and
the monthly ``Steel Business Briefing'' prices for steel wire rod to
calculate an annual benchmark price for 2008.
Under 19 CFR 351.511(a)(2)(iv), when measuring the adequacy of
remuneration under tier one or tier two, the Department will adjust the
benchmark price to reflect the price that a firm actually paid or would
pay if it imported the product, including delivery charges and import
duties. Regarding delivery charges, we have included a freight cost
that would be incurred based on the average cost of shipping wire rod
from South America and Europe. We have also added import duties, as
reported by the GOC, and the VAT applicable to imports of wire rod into
the PRC. See Calculation Memorandum at Attachment 6. Comparing the
resulting annual benchmark unit price to the unit price paid by Ningbo
Jiulong for wire rod during the POI that we found to be produced by an
``authority,'' we determine that wire rod was provided for LTAR and
that a benefit exists in the amount of the difference between the
benchmark price and what the respondent paid for wire rod. See 19 CFR
351.511(a).
Finally, with respect to specificity, the GOC has provided
information regarding end uses for wire rod. See GOC questionnaire
response at 26 and Exhibit-O-II-D.2. The GOC stated that the end uses
would relate to the type of industry involved as a direct purchaser of
the input. See GQR at Exhibit 33. While the listed industries may
represent numerous products, section 771(5A)(D)(iii)(I) of the Act
directs the Department to conduct its analysis on an enterprise or
industry 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 also LWRP Decision Memorandum at
Comment 7. Therefore, we determine that a countervailable subsidy was
conferred on Ningbo Jiulong through the GOC's provision of wire rod for
LTAR. To calculate the subsidy, we took the difference between the
delivered world market price and the price Ningbo Jiulong paid for wire
rod produced by the government during the POI. See 19 CFR 351.524(c).
We divided this by Ningbo Jiulong's total sales during the POI. On this
basis, we preliminarily determine the net countervailable subsidy rate
to be 3.65 percent ad valorem for Ningbo Jiulong.
C. Income Tax Credits for Domestically Owned Companies Purchasing
Domestically Produced Equipment
Ningbo Jiulong reported receiving an income tax credit on the tax
return it filed during the POI under the ``Income Tax Credits for
Domestically Owned Companies Purchasing Domestically Produced
Equipment'' program. According to the GOC, this program was established
on July 1, 1999, pursuant to ``Provisional Measures on Enterprise
Income Tax Credit for Investment in Domestically Produced Equipment for
Technology Renovation.'' The GOC states that under the program, a
domestically invested company may claim tax credits on the purchase of
domestic equipment if the project is compatible with the industrial
policies of the GOC. Specifically, a tax credit up to 40 percent of the
purchase price of the domestic equipment may apply to the incremental
increase in tax liability from the previous tax year. The GOC further
states that pursuant to the ``Circular on Relevant Issues with Respect
to Ceasing Implementation Of Income Tax Credit To Purchase Of
Domestically Produced Equipment by Enterprises,'' the program has been
terminated, effective January 1, 2008.
We determine that the income tax deductions provided under the
program constitute a financial contribution, in the form of revenue
forgone, and a benefit, in an amount equal to the tax savings, under
section 771(5)(D)(ii) of the Act and 19 CFR 351.509(a)(1),
respectively. We further find that this program is specific under
section 771(5A)(C) of the Act because the receipt of the tax savings is
contingent upon the use of domestic equipment over imported equipment,
and therefore constitutes an import substitution subsidy. To calculate
the benefit, we used the amount of tax savings Ningbo Jiulong received
on the tax return it filed during the POI, pursuant to 19 CFR
351.509(a)(2)(b). In accordance with 19 CFR 351.509(c), we have
allocated benefits received under the program to the POI.
To calculate the net subsidy rate, we divided the benefit by Ningbo
Jiulong's total sales during the POI. On this basis, we preliminarily
determine the net countervailable subsidy rate to be 1.68 percent ad
valorem for Ningbo Jiulong.
II. Programs Discovered During the Course of the Investigation and
Preliminarily Found to be Countervailable
A. Export Grant 2008
Ningbo Jiulong reported that it received benefits under the
``Export Grant 2008'' program from the State Tax Authority Ningbo City
during the POI. According to Ningbo Jiulong, the grant is received on a
monthly basis, at a rate of 0.03 RMB for each US$1 of exports during
that month. Based on information on the record, the Department finds
that this grant constitutes a financial contribution within the meaning
of section 771(5)(D)(i) of the Act. A benefit is received equal to the
amount of the grant, in accordance with 19 CFR 351.504(a). Because the
grant appears to be contingent on export performance, the Department
preliminarily determines that it is specific within the meaning of
section 771(5A)(B) of the Act.
Because grants under this program are not exceptional and the
company can expect to receive them on an ongoing basis, we are treating
them as recurring, under 19 CFR 351.524(c)(2) and allocating the grants
received to the year of receipt. To calculate the net subsidy rate, we
first summed all of the grants received by Ningbo Jiulong during the
POI and then divided this amount by Ningbo Jiulong's total export sales
during the POI. On this basis, we preliminarily determine the net
countervailable subsidy rate to be 0.09 percent ad valorem for Ningbo
Jiulong.
B. Jiulong Lake Town Grant 2008
In its response to the supplemental questionnaire, Ningbo Jiulong
reported that this grant is a conglomeration of four separate awards
provided by Ningbo Zhenhai Jiulong Lake Town Government and received by
Ningbo Jiulong during the POI: 1) the Technical Reform Input Award,
which is awarded to only one company; 2) the Advancement in Sales
Award, which is awarded to three companies; 3) the District Model
Enterprise for Environmental Protection award, which is awarded to only
one company; and 4) the Advanced Enterprise in Energy-Saving award,
which is awarded to three companies. Based on information
[[Page 56802]]
on the record, the Department finds that these awards constitute
financial contributions in the form of grants, within the meaning of
section 771(5)(D)(i) of the Act. The benefit received is equal to the
amount of the grants, in accordance with 19 CFR 351.504(a). Because it
appears that only a limited number of companies received each grant,
the Department preliminarily determines that these grants are specific
within the meaning of section 771(5A)(D)(iii)(I) of the Act. In
accordance with 19 CFR 351.504(c) and 19 CFR 351.524(b)(2), we have
performed the ``0.5 percent test,'' and, because the benefits are less
than 0.5 percent of total sales, we have allocated benefits received
under the program to the year of receipt.
To calculate the net subsidy rate, we divided sum of all the grants
under this program received during the POI by Ningbo Jiulong's total
sales during the POI. On this basis, we preliminarily determine the net
countervailable subsidy rate to be 0.04 percent ad valorem for Ningbo
Jiulong.
C. Energy Saving Grant 2008
Ningbo Jiulong reported receiving benefits under the ``Energy
Saving Grant 2008'' program during the POI. According to Ningbo
Jiulong, these grants are provided by the Ningbo Zhenhai Development
and Reform Bureau as an award for investment in energy-saving projects.
The amount of the grant is calculated as a percentage of the total
investment made in energy-saving projects. Based on information on the
record, the Department finds that this grant constitutes a financial
contribution within the meaning of section 771(5)(D)(i) of the Act.
There is a benefit equal to the amount of the grant in accordance with
19 CFR 351.504(a). Ningbo Jiulong reported that, during the POI, only
19 companies received grants for investments made in energy-saving
projects under this program. Because these grants were provided to a
limited number of enterprises, the Department preliminarily determines
this program to be specific within the meaning of section
771(5A)(D)(iii)(I) of the Act. In accordance with 19 CFR 351.504(c) and
19 CFR 351.524(b)(2), and as a result of the ``0.5 percent test,'' we
have allocated benefits received under the program to the year of
receipt.
To calculate the net subsidy rate, we divided the grant amount by
Ningbo Jiulong's total sales of subject merchandise during the POI. On
this basis, we preliminarily determine the net countervailable subsidy
rate to be 0.14 percent ad valorem for Ningbo Jiulong.
D. Foreign Trade Grant 2008
Ningbo Jiulong reported that it received a grant under the
``Foreign Trade Grant 2008'' program during the POI. Ningbo Jiulong
states that the grant was a flat award amount, available after an
eligible firm reached a minimum value of exports. Based on information
on the record, the Department finds that a financial contribution was
provided in the form of a grant within the meaning of section 771(D)(i)
of the Act. A benefit exists in the amount of the grant, within the
meaning of 19 CFR 351.504(a). Because the awarding of the grant is
contingent upon a company reaching a minimum level of export sales, the
Department preliminarily determines that this grant is an export
subsidy and therefore specific under section 771(5A)(B) of the Act. In
accordance with 19 CFR 351.504(c) and 19 CFR 351.524(a) and (c), and as
a result of the ``0.5 percent test'' performed with Ningbo Jiulong's
total exports, we have allocated benefits received under the program to
the year of receipt.
To calculate the net subsidy rate, we divided the grant amount by
Ningbo Jiulong's total export sales during the POI. On this basis, we
preliminarily determine the net countervailable subsidy rate to be 0.01
percent ad valorem for Ningbo Jiulong.
E. Famous Brand Grant 2008
Ningbo Jiulong reported receiving grants under the ``Famous Brand
Grant 2008'' program from the Bureau of Quality and Technical
Supervision during the POI. According to Ningbo Jiulong, eligibility
for the receipt of benefits under the program is contingent on a
company owning a Ningbo famous brand and being located in Zhenhai
District, and four companies received grants under this program. Based
on information on the record, the Department finds that this program
constitutes a financial contribution in the form of a grant in
accordance with section 771(5)(D)(i) of the Act. The amount of the
benefit is equal to the amount of the grant, according to 19 CFR
351.504(a). We preliminarily determine that the program is specific
within the meaning of section 771(5A)(D)(iii)(I) of the Act because the
actual recipients of the grant, whether considered on an enterprise or
industry basis, are limited in number. In accordance with 19 CFR
351.504(c) and 19 CFR 351.524(b)(2), and as a result of the ``0.5
percent test,'' we have allocated benefits received under the program
to the year of receipt.
To calculate the net subsidy rate, we divided the benefit by Ningbo
Jiulong's total sales during the POI. On this basis, we preliminarily
determine the net countervailable subsidy rate to be 0.02 percent ad
valorem for Ningbo Jiulong.
F. Innovative Small- and Medium-Sized Enterprise Grant 2008
Ningbo Jiulong identified itself as a recipient of the ``Innovative
Small-and Medium-Sized Enterprise Grant 2008'' from the Ningbo Zhenhai
Development and Reform Bureau during the POI. Criteria for receipt of
benefits under this program include minimum sales and sales growth
levels, as well as ownership of certain brands and technologies. Based
on information on the record, the Department finds that this grant is a
financial contribution within the meaning of section 771(5)(D)(i) of
the Act. The amount of the benefit is equal to the amount of the grant,
which is the same amount for all companies that meet the eligibility
criteria of the program. Because only nine companies received the grant
during the POI, the Department preliminarily determines that the grant
is specific within the meaning of section 771(5A)(D)(iii)(I) of the Act
because it is provided to a group of enterprises that is limited in
number. In accordance with 19 CFR 351.504(c) and 19 CFR 351.524(b)(2),
and as a result of the ``0.5 percent test,'' we have allocated benefits
received under the program to the year of receipt.
To calculate the net subsidy rate, we divided the grant amount by
Ningbo Jiulong's total sales during the POI. On this basis, we
preliminarily determine the net countervailable subsidy rate to be 0.04
percent ad valorem for Ningbo Jiulong.
G. Water Fund Refund/Exemption 2008
Ningbo Jiulong reported that it received benefits under the ``Water
Fund Refund/Exemption 2008'' program during the POI, and that receipt
of these benefits was contingent on it being an exporting company. From
January to July 2008, Ningbo Jiulong reports that the amount it paid
into the water fund, which is a percentage of its total sales, was
refunded to it. From August to December 2008, Ningbo Jiulong reports
that it was exempted from the water fund payments normally required.
For funds received between January and July of 2008, there is a
financial contribution within the meaning of section 771(5)(D)(i) of
the Act. A benefit exists in the amount of the refund, in accordance
with 19 CFR 351.504(a). For the amount of the water fund that Ningbo
Jiulong was exempted from paying, a financial contribution exists
within the meaning of section 771(5)(D)(ii) of the Act. The benefit is
equal to the amount of the water fund payments that Ningbo Jiulong
would
[[Page 56803]]
have otherwise made, in accordance with 19 CFR 351.509(a)(1). Because
eligibility for the receipt of benefits under this program is
contingent on the recipient being an exporting company, the program is
specific within the meaning of section 771(5A)(B) of the Act.
Because grants under this program are received on a monthly basis,
we are treating them as recurring, and allocating the grants received
during the POI to the year of receipt. To calculate the net subsidy
rate, we added together the water fund refunds received for January
through July 2008 and the value of the water fund payments from which
Ningbo Jiulong was exempt for August through December 2008. We then
divided the total benefit by Ningbo Jiulong's total export sales during
the POI. On this basis, we preliminarily determine the net
countervailable subsidy rate to be 0.14 percent ad valorem for Ningbo
Jiulong.
H. Product Quality Grant
In Ningbo Jiulong's original questionnaire response, it provided an
exhibit in Chinese identifying fifteen grant programs from which it had
received benefits. However, two of those programs were not listed in
the English translation of that document. In the supplemental
questionnaire issued by the Department, we asked Ningbo Jiulong to
provide an exact, line-by-line translation of the original exhibit.
Ningbo Jiulong provided this full translation in its supplemental
questionnaire response, which identified the ``Product Quality Grant''
program as a program under which it received benefits during the POI.
Based on the facts available to the Department, we preliminarily
conclude that the ``Product Quality Grant'' constitutes a financial
contribution within the meaning of section 771(5)(D)(i) of the Act, and
that a benefit is received in the amount of the grant in accordance
with 19 CFR 351.504(a). Because neither the GOC nor Ningbo Jiulong
provided information about the number or types of recipients of grants
under this program, we must rely on facts available pursuant to section
776(a)(1) and (a)(2)(B) of the Act. Further, because we find that the
respondents should have been able to provide this information, we
preliminarily determine that they failed to act to the best of their
abilities. Accordingly, we are making an adverse inference under
section 776(b) of the Act, in applying the facts otherwise available
concerning this program. On this basis, we preliminarily determine the
Product Quality Grant to be specific. As such, it provides a
countervailable subsidy within the meaning of section 771(5) of the
Act. In accordance with 19 CFR 351.504(c) and 19 CFR 351.524(b)(2), and
as a result of the ``0.5 percent test,'' we have allocated the grant
received under the program to the year of receipt.
To calculate the net subsidy rate, we divided the grant amount by
Ningbo Jiulong's total sales during the POI. On this basis, we
preliminarily determine the net countervailable subsidy rate to be 0.02
percent ad valorem for Ningbo Jiulong.
III. Program Discovered During the Course of the Investigation and
Preliminarily Found To Be Not Countervailable
Cleaning Production Grant 2008
Ningbo Jiulong reported that it received benefits under the
``Cleaning Production Grant 2008'' program from the Ningbo Zhenhai
Environment Protection Bureau during the POI. The grant is provided to
organizations that carry out energy-saving and environmental protection
projects. Information in the record shows that grants under this
program are provided to a large number of businesses and organizations
across a wide range of fields, including numerous and diverse
industries ranging from appliance manufacturers to garment makers and
chemical companies, as well as schools, district governments,
hospitals, restaurants and a number of individuals. See Ningbo
Jiulong's September 21, 2009 supplemental questionnaire response. Based
on the value of the grant that Ningbo Jiulong received, and the total
amount of grants provided, Ningbo Jiulong does not appear to have
received a predominant or disproportionate share of the grants
distributed. As such, we preliminarily determine that Ningbo Jiulong's
receipt of the Cleaning Production Grant 2008 is not specific in
accordance with section 771(5A)(D)(iii)(I), (II) and (III) of the Act
and is therefore not countervailable. We will continue to gather
information about this program for the final determination.
IV. Programs Preliminarily Determined To Be Not Used
We preliminarily determine that Ningbo Jiulong did not apply for or
receive benefits during the POI under the programs listed below. We
will examine these programs and Ningbo Jiulong's reported non-use of
these programs further through supplemental questionnaires issued after
this preliminary determination and during verification.
A. Government Provision of Steel Bar for Less than Adequate
Remuneration
B. Government Provision of Steel Plate for Less than Adequate
Remuneration
C. Government Provision of Land-Use Rights to SOEs for Less than
Adequate Remuneration
D. ``Two Free, Three Half'' Program
E. Reduced Income Tax Rates for Export-Oriented FIEs
F. Preferential Income Tax Policy for Enterprises in the Northeast
Region
G. Forgiveness of Tax Arrears for Enterprises in the Old Industrial
Bases of Northeast China
H. Tax Subsidies for FIES in Specially Designated Geographic Areas
I. Local Income Tax Exemption and Reduction Programs for
``Productive'' FIEs
J. Income Tax Credits for FIEs Purchasing Domestically Produced
Equipment
K. Preferential Tax Programs for FIEs Recognized as High or New
Technology Enterprises
L. Import Tariff and Value Added Tax (VAT) Exemptions for
Encouraged Industries Importing Equipment for Domestic Operations
M. VAT and Tariff Exemptions for Purchases of Fixed Assets Under
the Foreign Trade Development Fund
N. Loans and Interest Subsidies Provided Pursuant to the Northeast
Revitalization Program
O. Grants to ``Third-Line'' Military Enterprises
P. Guangdong and Zhejiang Province Program to Rebate Antidumping
Fees
Q. The State Key Technology Project Fund
R. Export Incentive Payments Characterized as ``VAT Rebates''
S. VAT Refunds for FIEs Purchasing Domestically-Produced Equipment
V. Program for Which We Preliminarily Determine Ningbo Jiulong To Be
Ineligible
Petitioners have alleged the existence of certain provincial/
municipal programs that are potentially available to producers of
certain steel grating. The Department initiated an investigation into
these programs prior to respondent selection. Because Ningbo Jiulong
and all of its production facilities are located in the city of Ningbo,
Zhejiang Province, and not in the provinces or municipalities that
administer these programs, we preliminarily determine that Ningbo
Jiulong is ineligible to receive benefits under these programs.
A. Liaoning Province ``Five Points, One Line'' Program
B. Guangzhou City Famous Exports
[[Page 56804]]
Brands
C. Grants to Companies for ``Outward Expansion'' in Guangdong
Province
VI. Programs Preliminarily Determined Not to Provide Benefits During
the POI
Ningbo Jiulong reported that it received grants under several
additional programs in years prior to the POI. We requested, and Ningbo
Jiulong provided, its total sales and total export values for the years
in which these grants were received. We performed the ``0.5 percent
test,'' as prescribed under 19 CFR 351.524(b)(2), for the years in
which these grants were received. Because these grants were less than
0.5 percent of their relevant sales, the Department has determined that
these grants would have been expensed in the year of receipt.
Therefore, we preliminarily determine that grants which Ningbo Jiulong
reported receiving under the programs below did not benefit Ningbo
Jiulong's production, sale, or exports of certain steel grating during
the POI. See Calculation Memorandum at Attachment 10.
A. Technical Upgrading Grant 2005
B. Power Engine Grant 2005
C. Technical Innovation Grant 2006
D. Export Grant 2006
E. Technical Upgrading Grant 2007
F. Export Grant 2007
VII.Program for Which We Need Additional Information
GOC Provision of Electricity for Less than Adequate Remuneration
The Department initiated on the GOC's provision of electricity for
LTAR in the New Subsidy Initiation Memorandum on September 21, 2009.
The GOC and Ningbo Jiulong reported in their respective new subsidy
allegation questionnaire responses that no benefits were provided under
the program. According to the GOC, ``no benefit is conferred on end
users of electricity, which is provided as generally available
infrastructure to all user types.'' See the GOC's October 15, 2009 New
Subsidy Allegation Questionnaire Response at page 8. Because this was
the GOC's initial questionnaire response regarding the new subsidy
allegations, there has not been sufficient time for the Department to
issue a supplemental questionnaire to the GOC regarding the provision
of electricity. Furthermore, the GOC reported that it was still in the
process of gathering key information with regard to how Zhejiang
Province accounts for its cost elements; how cost increases are
factored into the retail price for electricity; and, how these final
price increases are allocated across the province and across tariff
end-user categories. See Id. at 12. Without this information, the
Department is unable to determine whether a benefit was provided to
Ningbo Jiulong from the provision of electricity. Therefore, the
Department will request from the GOC the additional information needed
to complete our analysis of whether this program provides a
countervailable subsidy to Ningbo Jiulong.
Verification
In accordance with section 782(i)(1) of the Act, we intend to
verify the information submitted by the respondents prior to making our
final determination.
Suspension of Liquidation
In accordance with section 703(d)(1)(A)(i) of the Act, we
calculated an individual rate for Ningbo Jiulong, the only producer/
exporter of the subject merchandise individually investigated. Sections
703(d) and 705(c)(5)(A) of the Act state that, for companies not
investigated, we will determine an all others rate by weighting the
individual company subsidy rate of each of the companies investigated
by each company's exports of subject merchandise to the United States.
However, the all others rate may not include zero and de minimis rates
or any rates based solely on the facts available.\1\ In this
investigation, Ningbo Jiulong's rate meets the criteria for the all
others rate. Therefore, we have assigned Ningbo Jiulong's rate to all
other producers and exporters. We preliminarily determine the total
estimated net countervailable subsidy rates to be:
---------------------------------------------------------------------------
\1\ Pursuant to 19 CFR 351.204(d)(3), the Department must also
exclude the countervailable subsidy rate calculated for a voluntary
respondent. In this investigation we had no producers or exporters
request to be voluntary respondents.
------------------------------------------------------------------------
Manufacturer/Exporter Net Subsidy Rate
------------------------------------------------------------------------
Ningbo Jiulong Machinery Manufacturing Co., Ltd..... 7.44 percent ad
valorem
All Others.......................................... 7.44 percent ad
valorem
------------------------------------------------------------------------
In accordance with section 703(d)(1)(B) and (2) of the Act, we are
directing U.S. Customs and Border Protection to suspend liquidation of
all entries of certain steel grating from the PRC that are entered, or
withdrawn from warehouse, for consumption on or after the date of the
publication of this notice in the Federal Register, and to require a
cash deposit or bond for such entries of merchandise in the amounts
indicated above.
ITC Notification
In accordance with section 703(f) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all non-privileged and non-proprietary information relating to this
investigation. We will allow the ITC access to all privileged and
business proprietary information in our files, provided the ITC
confirms that it will not disclose such information, either publicly or
under an administrative protective order, without the written consent
of the Assistant Secretary for Import Administration. In accordance
with section 705(b)(2)(B) of the Act, if our final determination is
affirmative, the ITC will make its final determination within 45 days
after the Department makes its final determination.
Disclosure and Public Comment
In accordance with 19 CFR 351.224(b), we will disclose to the
parties the calculations for this preliminary determination within five
days of its announcement. Unless otherwise notified by the Department,
case briefs for this investigation must be submitted no later than 50
days after the date of publication of the preliminary determination.
See 19 CFR 351.309(c) (for a further discussion of case briefs).
Rebuttal briefs must be filed within five days after the deadline for
submission of case briefs, pursuant to 19 CFR 351.309(d)(1). A list of
authorities relied upon, a table of contents, and an executive summary
of issues should accompany any briefs submitted to the Department.
Executive summaries should be limited to five pages total, including
footnotes.
Section 774 of the Act provides that the Department will hold a
public hearing to afford interested parties an opportunity to comment
on arguments raised in case or rebuttal briefs, provided that such a
hearing is requested by an interested party. If a request for a hearing
is made in this investigation, the hearing will tentatively be held two
days after the deadline for submission of the rebuttal briefs, pursuant
to 19 CFR 351.310(d), at the U.S. Department of Commerce, 14th Street
and Constitution Avenue, NW, Washington, DC 20230. Parties should
confirm by telephone the time, date, and place of the hearing 48 hours
before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written
[[Page 56805]]
request to the Assistant Secretary for Import Administration, U.S.
Department of Commerce, Room 1870, within 30 days of the publication of
this notice, pursuant to 19 CFR 351.310(c). Requests should contain:
(1) the party's name, address, and telephone number; (2) the number of
participants; and (3) a list of the issues to be discussed. Oral
presentations will be limited to issues raised in the briefs.
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: October 26, 2009.
John M. Andersen,
Acting Deputy Assistant Secretary for Antidumping/Countervailing Duty
Operations.
[FR Doc. E9-26318 Filed 11-2-09; 8:45 am]
BILLING CODE 3510-DS-S