[Federal Register Volume 77, Number 59 (Tuesday, March 27, 2012)]
[Notices]
[Pages 18211-18215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7331]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-984]
Drawn Stainless Steel Sinks From the People's Republic of China:
Initiation of Countervailing Duty Investigation
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
DATES: Effective Date: March 27, 2012.
FOR FURTHER INFORMATION CONTACT: Shane Subler and Hermes Pinilla, AD/
CVD Operations, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
0189 and (202) 482-3477, respectively.
SUPPLEMENTARY INFORMATION:
The Petition
On March 1, 2012, the Department of Commerce (``Department'')
received a countervailing duty (``CVD'') petition concerning imports of
drawn stainless steel sinks from the People's Republic of China
(``PRC'') filed in proper form by Elkay Manufacturing Company
(``Petitioner''). See Petition for the Imposition of Antidumping and
Countervailing Duties Against Drawn Stainless Steel Sinks from the
People's Republic of China, dated March 1, 2012 (``the Petition''). On
March 6 and 7, 2012, the Department issued requests to Petitioner for
additional information and for clarification of certain areas of the
CVD Petition. Based on the Department's requests, Petitioner filed a
supplement to the Petition on March 9, 2012.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as
amended (``Act''), Petitioner alleges that producers/exporters of drawn
stainless steel sinks from 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 Petitioner filed the Petition on behalf
of the domestic industry because Petitioner is an interested party, as
defined in section 771(9)(C) of the Act, and has demonstrated
sufficient industry support with respect to the investigation that it
requests the Department to initiate (see ``Determination of Industry
Support for the Petition'' below).
[[Page 18212]]
Period of Investigation
The period of investigation is January 1, 2011, through December
31, 2011.
Scope of Investigation
The products covered by the scope of this investigation are
stainless steel sinks with single or multiple drawn bowls, with or
without drain boards, whether finished or unfinished, regardless of
type of finish, gauge, or grade of stainless steel (``Drawn Stainless
Steel Sinks''). Mounting clips, fasteners, seals, and sound-deadening
pads are also covered by the scope of the investigation if they are
included within the sales price of the Drawn Stainless Steel Sinks.\1\
For purposes of this scope definition, the term ``drawn'' refers to a
manufacturing process using metal forming technology to produce a
smooth basin with seamless, smooth, and rounded corners. Drawn
Stainless Steel Sinks are available in various shapes and
configurations and may be described in a number of ways including flush
mount, top mount, or undermount (to indicate the attachment relative to
the countertop). Stainless steel sinks with multiple bowls that are
joined through a welding operation to form one unit are covered by the
scope of the investigation. Drawn Stainless Steel Sinks are covered by
the scope of the investigation whether or not they are sold in
conjunction with non-subject accessories such as faucets (whether
attached or unattached), strainers, strainer sets, rinsing baskets,
bottom grids, or other accessories.
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\1\ Mounting clips, fasteners, seals, and sound-deadening pads
are not covered by the scope of this investigation if they are not
included within the sales price of the Drawn Stainless Steel Sinks,
regardless of whether they are shipped with or entered with Drawn
Stainless Steel Sinks.
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Excluded from the scope of the investigation are stainless steel
sinks with fabricated bowls. Fabricated bowls do not have seamless
corners, but rather are made by notching and bending the stainless
steel, and then welding and finishing the vertical corners to form the
bowls. Stainless steel sinks with fabricated bowls may sometimes be
referred to as ``zero radius'' or ``near zero radius'' sinks.
The products covered by the investigation are currently classified
in the Harmonized Tariff Schedule of the United States (``HTSUS'')
under statistical reporting number 7324.10.000. Although the HTSUS
subheading is provided for convenience and customs purposes, the
written description of the products under investigation is dispositive
of its inclusion as subject merchandise.
Comments on Scope of Investigation
During our review of the Petition, we discussed the scope with
Petitioner to ensure that it is an accurate reflection of the products
for which the domestic industry is seeking relief. As a result, the
``Scope of Investigation'' language has been modified from the language
in the Petition to reflect these clarifications. See March 15, 2012
letter from Petitioner regarding Drawn Stainless Steel Sinks from the
People's Republic of China: Petitioner's Revision to the Proposed Scope
of Investigations.
Moreover, as discussed in the preamble to the regulations (see
Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19,
1997)), we are setting aside a period of time for interested parties to
raise issues regarding product coverage. The Department encourages
interested parties to submit such comments by 5 p.m. DST on Tuesday,
April 10, 2012, which is twenty calendar days from the signature date
of this notice. All comments must be filed on the records of both the
PRC antidumping duty investigation as well as the PRC CVD
investigation.
Filing Requirements
All submissions to the Department must be filed electronically
using Import Administration's Antidumping and Countervailing Duty
Centralized Electronic Service System (``IA ACCESS''). An
electronically filed document must be received successfully in its
entirety by the Department's electronic records system, IA ACCESS, by
the time and date set by the Department. Documents excepted from the
electronic submission requirements must be filed manually (i.e., in
paper form) with the Import Administration's APO/Dockets Unit, Room
1870, U.S. Department of Commerce, 14th Street and Constitution Avenue
NW., Washington, DC 20230, and stamped with the date and time of
receipt by the deadline noted above.\2\
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\2\ See http://www.gpo.gov/fdsys/pkg/FR-2011-07-06/pdf/2011-16352.pdf for details of the Department's Electronic Filing
Requirements, which went into effect on August 5, 2011. Information
on help using IA ACCESS can be found at https://iaaccess.trade.gov/help.aspx and a handbook can be found at https://iaaccess.trade.gov/help/Handbook%20on%20Electronic%20Filing%20Procedures.pdf.
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Consultations
Pursuant to section 702(b)(4)(A)(ii) of the Act, on March 5, 2012,
the Department invited representatives of the Government of the PRC
(``GOC'') for consultations with respect to the CVD petition. Those
consultations were held on March 15, 2012. See Ex-Parte Memorandum on
Consultations with Officials from the Government of the People's
Republic of China on the Countervailing Duty Petition regarding Drawn
Stainless Steel Sinks, dated March 19, 2012.
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, or those producers
whose collective output of a domestic like product constitutes a major
proportion of the total domestic production of the 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.
[[Page 18213]]
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, Petitioner does not offer
a definition of the 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 drawn stainless steel sinks
constitute 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: Drawn Stainless Steel Sinks from
the People's Republic of China'' (CVD Initiation Checklist) at
Attachment II, dated concurrently with this notice and on file
electronically via IA ACCESS. Access to IA ACCESS is available in the
Central Records Unit (CRU), Room 7046 of the main Department of
Commerce building.
In determining whether Petitioner has standing under section
702(c)(4)(A) of the Act, we considered the industry support data
contained in the Petition with reference to the domestic like product
as defined in the ``Scope of the Investigation'' section of this
notice. To establish industry support, Petitioner provided its own 2011
production of the domestic like product, and compared this to the total
production of the domestic like product for the entire domestic
industry. See Volume I of the Petition, at 3 and Exhibit I-1, and
General Issues Supplement, at 4; see also CVD Initiation Checklist at
Attachment II.
Our review of the data provided in the Petition, supplemental
submission, and other information readily available to the Department
indicates that Petitioner has established industry support. See CVD
Initiation Checklist at Attachment II. First, the 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 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 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 Petition. See id. Accordingly, the Department determines that the
Petition was filed on behalf of the domestic industry within the
meaning of section 702(b)(1) of the Act. See id.
The Department finds that Petitioner filed the Petition on behalf
of the domestic industry because it is an interested party as defined
in section 771(9)(C) of the Act and it has demonstrated sufficient
industry support with respect to the CVD investigation that it is
requesting the Department initiate. See id.
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 the subject merchandise from the PRC materially
injure, or threaten material injury to, a U.S. industry.
Allegations and Evidence of Material Injury and Causation
Petitioner alleges that imports of the subject merchandise are
benefitting from countervailable subsidies and that such imports are
causing, or threaten to cause, material injury to the U.S. industry
producing the domestic like product. In addition, Petitioner alleges
that subject imports exceed the negligibility threshold provided for
under section 771(24)(A) of the Act.
Petitioner contends that the industry's injured condition is
illustrated by reduced market share; underselling and price depression
or suppression; decline in financial performance; lost sales and
revenue; and production, capacity, capacity utilization, shipment, and
employment data. See Volume I of the Petition, at 8-25 and Exhibits I-4
through I-32, and General Issues Supplement, at 4. 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 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 petitioner(s)
supporting the allegations. The Department has examined the Petition on
drawn stainless steel sinks from the PRC and finds that it complies
with the requirements of section 702(b) of the Act. Therefore, in
accordance with section 702(b) of the Act, we are initiating a CVD
investigation to determine whether manufacturers, producers, or
exporters of drawn stainless steel sinks in the PRC receive
countervailable subsidies. For a discussion of evidence supporting our
initiation determination, see Initiation Checklist.
We are including in our investigation the following programs
alleged in the Petition to have provided countervailable subsidies to
producers and exporters of the subject merchandise in the PRC:
A. Grant Programs
1. The State Key Technology Renovation Fund.
2. ``Famous Brands'' Awards.
3. Grants to Cover Legal Fees in Trade Remedy Cases.
4. Special Fund for Energy Saving Technology Reform.
5. The Clean Production Technology Fund.
6. Grants for Listing Shares.
7. Export Assistance Grants.
8. Guangdong Province Science and Technology Bureau Project Fund
(aka Guangdong Industry, Research, University Cooperating Fund).
9. Export Rebate for Mechanic, Electronic, and High-tech Products.
10. Funds for Outward Expansion of Industries in Guangdong
Province.
11. Fund for Small and Medium Enterprises (``SME'') Bank-enterprise
Cooperation Projects.
12. Special Fund for Fostering Stable Growth of Foreign Trade.
[[Page 18214]]
13. Local Government Deposits Into Bank Accounts.
B. Loans and Directed Credit
1. Policy Loans.
2. Preferential Export Financing.
3. Treasury Bond Loans or Grants.
4. Preferential Loans for State-owned Enterprises (``SOEs'').
C. Income Tax Programs
1. ``Two Free, Three Half'' Program.
2. Provincial Tax Exemptions and Reductions for ``Productive''
Foreign Invested. Enterprises (``FIEs'').
3. Tax Reductions for FIEs Purchasing Chinese-made Equipment.
4. Tax Reductions for FIEs in Designated Geographic Locations.
5. Tax Reductions for Technology- or Knowledge-intensive FIEs
6. Tax Reductions for FIEs that are also High or New Technology
Enterprises (``HNTEs'').
7. Tax Reductions for HNTEs Involved in Designated Projects.
8. Tax Offsets for Research and Development at FIEs.
9. Tax Credits for Domestically Owned Companies Purchasing Chinese-
made Equipment.
10. Tax Reductions for Export-oriented FIEs.
11. Tax Refunds for Reinvestment of FIE Profits in Export-Oriented
Enterprises.
12. Tax Reduction for High-tech Industries in Guangdong Province.
D. Other Tax Programs
1. Import Tariff and Value Added Tax (``VAT'') Exemptions for FIEs
and Certain Domestic Enterprises Using Imported Equipment in Encouraged
Industries.
2. VAT Rebates on FIE Purchases of Domestically Produced Equipment.
3. City Tax and Surcharge Exemptions for FIEs.
4. Exemptions from Administrative Charges for Companies in
Industrial Zones.
5. Export Subsidies Characterized as ``VAT Rebates''.
6. VAT and Import Duty Exemptions on Imported Material.
7. VAT Rebates on Domestically Produced Equipment.
E. Government Provision of Goods or Services for Less Than Adequate
Remuneration (``LTAR'')
1. Land to SOEs.
2. Lands to Companies Located in Industrial or Other Special
Economic Zones.
3. Electricity.
4. Stainless Steel Coils.
F. Subsidies to Enterprises Located in Industrial Cluster Zones
1. Exemptions from Land Development Fees.
2. Land Purchase Grants.
3. Grants to Hire Post-doctoral Workers.
4. Financial Subsidies: Interest Subsidies, Preferential Loans, and
Lowered Interest Rates.
5. Tax Reductions or Exemptions.
We are not including in our investigation the following programs
alleged to benefit producers and exporters of the subject merchandise
in the PRC:
1. Tax Exemptions and Reductions for Enterprises That Utilize
Recycled Materials.
2. The State Science and Technology Support Scheme.
3. Provincial Loan Discount Special Fund for SMEs.
4. Tax Preferences Available to Companies That Operate at a Small
Profit.
For further information explaining why the Department is not
investigating these programs, see CVD Initiation Checklist.
Respondent Selection
For this investigation, the Department expects to select
respondents based on U.S. Customs and Border Protection (``CBP'') data
for U.S. imports during the period of investigation. We intend to make
our decision regarding respondent selection within 20 days of
publication of this Federal Register notice. The Department invites
comments regarding the CBP data and respondent selection within seven
calendar days of publication of this Federal Register notice.
Distribution of Copies of the Petition
In accordance with section 702(b)(4)(A)(i) of the Act and 19 CFR
351.202(f), a copy of the public version of the Petition has been
provided to the representatives of the GOC. Because of the particularly
large number of producers/exporters identified at Exhibit I-2 of the
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 Petition is filed, whether there is a reasonable
indication that imports of subsidized drawn stainless steel sinks from
the PRC are causing material injury, or threatening to cause 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; otherwise, the investigation will proceed according to
statutory and regulatory time limits.
Notification to Interested Parties
Interested parties must submit applications for disclosure under
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 this investigation 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 or 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 or
CVD proceedings initiated on or after March 14, 2011. See Certification
of Factual Information for 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. Foreign governments and their officials
may continue to submit certifications in either the format that was in
use prior to the effective date of the Interim Final Rule, or in the
format provided in the Interim Final Rule. See Certification of Factual
Information to Import Administration During Antidumping and
Countervailing Duty Proceedings: Supplemental Interim Final Rule, 76 FR
54697 (September 2, 2011). The Department intends to reject factual
information submissions in any proceeding segments initiated on or
after March 14, 2011, if the submitting party does not comply with the
revised certification requirements.
[[Page 18215]]
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: March 21, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2012-7331 Filed 3-26-12; 8:45 am]
BILLING CODE 3510-DS-P