[Federal Register Volume 79, Number 79 (Thursday, April 24, 2014)]
[Notices]
[Pages 22790-22793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09362]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-201-846]
Sugar From Mexico: Initiation of Countervailing Duty
Investigation
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
DATED: Effective Date: April 24, 2014.
FOR FURTHER INFORMATION CONTACT: Kaitlin Wojnar at (202) 482-3857, AD/
CVD Operations, Office VII, Enforcement and Compliance, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW., Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
The Petition
On March 28, 2014, the Department of Commerce (the Department)
received a countervailing duty (CVD) petition concerning imports of
sugar from Mexico, filed in proper form, on behalf of the American
Sugar Coalition and its members (collectively, Petitioners).\1\ The CVD
Petition was accompanied by an antidumping duty (AD) petition with
respect to Mexico.\2\ Petitioners are domestic processors, millers, and
refiners of sugar and growers of sugar cane and sugarbeets. On April 1,
2014, the Department requested information and clarification for
certain portions of the CVD Petition.\3\ On April 2, 2014, the
Department requested information and clarification for certain general
portions of the AD and CVD Petitions.\4\ Petitioners filed their
responses to these requests on April 7, 2014.\5\ In response to a phone
conversation with the Department on April 9, 2014,\6\ Petitioners filed
a second response supplementing the Petition on April 10, 2014.\7\ On
April 14, 2014, Petitioners made another submission modifying the scope
of the Petition.\8\
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\1\ See Petition for the Imposition of Countervailing Duties on
Imports of Sugar From Mexico, dated March 28, 2014 (CVD Petition or
Petition).
\2\ See Petition for the Imposition of Antidumping Duties on
Imports of Sugar From Mexico, dated March 28, 2014 (AD Petition).
\3\ See Letter to Robert C. Cassidy, Jr. from Mark Hoadley,
dated April 1, 2014 (CVD Supplemental Questions).
\4\ See Letter to Robert C. Cassidy, Jr. from Mark Hoadley,
dated April 2, 2014 (General Issues Supplemental Questions).
\5\ See Response to CVD Supplemental Questions, dated April 7,
2014 (CVD Supplement); Response to General Supplemental Questions,
dated April 7, 2014 (General Issues Supplement).
\6\ See Phone Call With Petitioners Ex Parte Memorandum, dated
April 9, 2014.
\7\ See Second General Issues Supplement to Petitions, dated
April 10, 2014 (Second General Issues Supplement).
\8\ See Supplement to the Scope of the Petition, dated April 14,
2014 (Scope Supplement).
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In accordance with section 702(b)(1) of the Tariff Act of 1930, as
amended (the Act), Petitioners allege that the Government of Mexico
(the GOM) is providing countervailable subsidies (within the meaning of
sections 701 and 771(5) of the Act) with respect to imports of sugar
from Mexico, and that imports of sugar from Mexico are materially
injuring, and threaten material injury to, the domestic industry
producing sugar in the United States. The Department finds that
Petitioners filed the Petition on behalf of the domestic industry
because Petitioners are interested parties as defined in sections
771(9)(C), (E), (F), or (G) of the Act, and that Petitioners
demonstrated sufficient industry support with respect to the initiation
of the investigation Petitioners are requesting.\9\
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\9\ See ``Determination of Industry Support for the Petition,''
below.
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Period of Investigation
The period of investigation (POI) is January 1, 2013, through
December 31, 2013.
Scope of Investigation
The product covered by this investigation is sugar from Mexico. For
a full description of the scope of this investigation, see ``Scope of
Investigation'' at the Appendix of this notice.
Comments on Scope of Investigation
During our review of the Petition, the Department issued questions
to, and received responses from, Petitioners pertaining to the proposed
scope in order to ensure that the scope language in the Petition would
be an accurate reflection of the products for which the domestic
industry is seeking relief.\10\ As discussed in the Preamble to the
[[Page 22791]]
regulations,\11\ we are setting aside a period for interested parties
to raise issues regarding product coverage. The period of scope
comments 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. All comments must be filed
by 5:00 p.m. Eastern Daylight Time (EDT) on May 7, 2014, which is
twenty calendar days from the signature date of this notice. Any
rebuttal comments must be filed by 5:00 p.m. EDT on May 14, 2014. All
such comments must be filed on the records of the CVD investigation, as
well as the concurrent AD investigation.
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\10\ See General Issues Supplemental Questions; see also General
Issues Supplement at 3-8; Phone Call with Petitioners Ex Parte
Memorandum, dated April 9, 2014; Second General Issues Supplement at
1-4; Scope Supplement.
\11\ See Antidumping Duties; Countervailing Duties; Final Rule,
62 FR 27296, 27323 (May 19, 1997).
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Filing Requirements
All submissions to the Department must be filed electronically
using Enforcement and Compliance's Antidumping and Countervailing Duty
Centralized Electronic Service System (IA ACCESS).\12\ An
electronically filed document must be received successfully in its
entirety by the time and date noted above. Documents excepted from the
electronic submission requirements must be filed manually (i.e., in
paper form) with Enforcement and Compliance's APO/Dockets United, Room
1870, Department of Commerce, 14th Street and Constitution Avenue NW.,
Washington, DC 20230, and stamped with the date and time of receipt by
the established deadline.\13\
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\12\ For general filing requirements, see 19 CFR 351.303.
\13\ See 19 CFR 351.303(b). For details regarding the
Department's electronic filing requirements, see Antidumping and
Countervailing Duty Proceedings: Electronic Filing Procedures;
Administrative Protective Order Procedures, 76 FR 39263 (July 6,
2011). Information regarding IA ACCESS assistance 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
%20Filling%20Procedures.pdf.
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Consultations
Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department
invited representatives of the GOM for consultations with respect to
the Petition.\14\ Consultations were held with the GOM on April 11,
2014.\15\
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\14\ See Letter of Invitation Regarding Countervailing Duty
Petition on Sugar from Mexico, dated April 1, 2014.
\15\ See Consultations with the Government of Mexico Ex Parte
Memorandum, dated April 11, 2014 (Consultations Memorandum).
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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) if there is a large number of producers in
the industry, the Department may 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. In investigations
involving processed agricultural products, such as the instant
investigation, the Act allows the Department also to include growers or
producers of the raw agricultural product within the definition of the
industry upon satisfaction of certain conditions.\16\ 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 U.S. 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,\17\ 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.\18\
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\16\ See section 771(4)(E) of the Act. For a full discussion of
this provision of the Act and the Department's analysis, see
Attachment II--Countervailing Duty Investigation Initiation
Checklist: Sugar from Mexico (CVD Initiation Checklist) at
Attachment II, Analysis of Industry Support for the Antidumping and
Countervailing Duty Petitions Covering Sugar from Mexico. The CVD
Initiation Checklist is dated concurrently with, and hereby
incorporated into, this notice and on file electronically via IA
ACCESS. Access to documents filed via IA ACCESS is also available in
the Central Records Unit (CRU), Room 7046 of the main Department
building.
\17\ See section 771(10) of the Act.
\18\ See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8
(C.I.T. 2001) (citing Algoma Steel Corp., Ltd. v. United States, 688
F. Supp. 639, 644 (C.I.T. 1988), aff'd, 865 F.2d 240 (Fed. Cir.
1989)).
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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 determined that sugar, as defined in the scope of the
investigation, constitutes a single domestic like product and we
analyzed industry support in terms of that domestic like product.\19\
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\19\ See CVD Initiation Checklist at Attachment II.
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In determining whether Petitioners have 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 Investigation'' section above. To
establish industry support, Petitioners provided their production of
the domestic like product in crop year 2012/2013,\20\ and compared this
to the total production of the domestic like product for the entire
domestic industry.\21\ We relied upon data
[[Page 22792]]
Petitioners provided for purposes of measuring industry support.\22\
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\20\ Data on the domestic sugar industry are gathered and
presented by the United States Department of Agriculture (USDA) on a
crop year basis to reflect the annual cycle of planting, growing,
harvesting, and processing sugar. The crop year begins on October 1
and ends on September 30. Petitioners contend that data on a crop
year basis more accurately reflects the production of sugar than
would data presented on a calendar year basis. In addition,
Petitioners note that all producers of sugar report their data to
USDA on a crop year basis. See General Issues Supplement at 12.
\21\ See Petition at Exhibit I-6; General Issues Supplement at
9-16, Exhibits II, and Exhibit III; and Second General Issues
Supplement at Attachment IA.
\22\ See CVD Initiation Checklist at Attachment II.
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On April 10, 2014, we received comments on industry support from
the Grocery Manufacturers Association (GMA).\23\ We also received
comments on industry support from Archer Daniels Midland Company (ADM)
\24\ and Camara Nacional de Las Industrias Azucarera Y Al Alcoholera
(Camara) \25\ on April 11, 2014. Petitioners responded to the letters
from GMA, ADM, and Camara on April 15, 2014.\26\ In its consultations
with the Department, the GOM raised the issue of industry support.\27\
On April 15, 2014, we received additional comments on industry support
from the GMA.\28\ For further discussion of these comments, see the CVD
Initiation Checklist at Attachment II.
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\23\ See Letter from the Grocery Manufacturers Association,
dated April 11, 2014. We note that this letter is dated April 11,
2014; however, it was received by the Department on April 10, 2014.
\24\ See Letter from Archer Daniels Midland Company, dated April
11, 2014.
\25\ See Letter from Camara, dated April 11, 2014.
\26\ See Letter from Petitioners, dated April 15, 2014.
\27\ See Consultations Memorandum.
\28\ See Letter from the Grocery Manufacturers Association,
dated April 15, 2014.
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Based on information provided in the Petition, supplemental
submissions, and other information readily available to the Department,
we determine that Petitioners 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.\29\ Based
on information provided in the Petition, the domestic producers (or
workers) 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.
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.\30\
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\29\ Id.
\30\ Id.
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The Department finds that Petitioners filed the Petition on behalf
of the domestic industry because they are interested parties as defined
in sections 771(9)(C), (E), (F), or (G) of the Act and they
demonstrated sufficient industry support with respect to the
countervailing duty investigation that they are requesting the
Department initiate.\31\
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\31\ Id.
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Injury Test
Because Mexico 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 Mexico materially
injure, or threaten material injury to, a U.S. industry.
Allegations and Evidence of Material Injury and Causation
Petitioners allege 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. Petitioners allege that subject
imports exceed the negligibility threshold provided for under section
771(24)(A) of the Act.\32\
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\32\ See Petition at 31 and Exhibit I-15; see also General
Issues Supplement at 17-18 and Exhibit VII.
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Petitioners contend that the industry's injured condition is
illustrated by reduced market share, underselling and price depression
or suppression, lost sales and revenues, forfeitures and USDA purchases
that remove surpluses of domestically produced sugar from the market to
stabilize prices, decline in payments to growers and farmers, and
decline in financial performance.\33\ 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.\34\
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\33\ See Petition at 3-4, 19-20, 28-55, Exhibit I-3, Exhibit I-
4, Exhibit I-13, and Exhibits I-15 through I-21; see also General
Issues Supplement at 15-19, Exhibit I.A, and Exhibits VI through
VIII; Second General Issues Supplement at 5-7 and Attachment 3; and
Scope Supplement at 2 and Attachment 1.
\34\ See CVD Initiation Checklist at Attachment III, Analysis of
Allegations and Evidence of Material Injury and Causation for the
Antidumping and Countervailing Duty Petitions Covering Sugar from
Mexico.
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Initiation of Countervailing Duty Investigation
Section 702(b)(1) of the Act requires the Department to initiate a
CVD investigation 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 petitioner
supporting the allegations. In the Petition, Petitioners allege that
producers/exporters of sugar in Mexico benefited from countervailable
subsidies bestowed by the government. The Department examined the
Petition 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
manufacturers, producers, or exporters of sugar from Mexico receive
countervailable subsidies from the government.
Based on our review of the Petition, we find that there is
sufficient information to initiate a CVD investigation on certain
alleged programs. For a full discussion of the basis for our decision
to initiate or not initiate on each program, see the attached CVD
Initiation Checklist.
A public version of the initiation checklist is available on IA
ACCESS.
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 of subject merchandise during the POI under the following
Harmonized Tariff Schedule of the United States (HTSUS) numbers:
1701.12.1000, 1701.12.5000, 1701.13.1000, 1701.13.5000, 1701.14.1000,
1701.14.5000, 1701.91.1000, 1701.91.3000, 1701.99.1025, 1701.99.1050,
1701.99.5025, 1701.99.5050, and 1702.90.4000. We intend to release the
CBP data under Administrative Protective Order (APO) to all parties
with access to information protected by APO shortly after the
announcement of this case initiation.
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 at http://enforcement.trade.gov/apo/.
Interested parties may submit comments regarding the CBP data and
respondent selection by 5:00 p.m. EDT on the seventh calendar day after
publication of this notice. Comments must be filed in accordance with
the requirements discussed above in the ``Filing Requirements'' section
of this notice. If respondent selection is necessary, we intend to base
our decision regarding respondent selection upon comments received from
interested parties and our analysis of the record information within 20
days of publication of this notice.
[[Page 22793]]
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 Petitions has been
provided to the GOM via IA ACCESS. To the extent practicable, we will
attempt to provide a copy of the public version of the Petition to each
known exporter (as named in the Petition), as provided in 19 CFR
351.203(c)(2).
ITC Notification
We 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 was filed, whether there is a reasonable
indication that imports of sugar from Mexico are materially injuring,
or threatening material injury to, a U.S. industry.\35\ A negative ITC
determination will result in the investigation being terminated;
otherwise, this investigation will proceed according to statutory and
regulatory time limits.
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\35\ See section 703(a) of the Act.
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Submission of Factual Information
On April 10, 2013, the Department published Definition of Factual
Information and Time Limits for Submission of Factual Information:
Final Rule, 78 FR 21246 (April 10, 2013), which modified two
regulations related to AD and CVD proceedings: the definition of
factual information (19 CFR 351.102(b)(21)), and the time limits for
the submission of factual information (19 CFR 351.301). The final rule
identifies five categories of factual information in 19 CFR
351.102(b)(21), which are summarized as follows: (i) Evidence submitted
in response to questionnaires; (ii) evidence submitted in support of
allegations; (iii) publicly available information to value factors
under 19 CFR 351.408(c) or to measure the adequacy of remuneration
under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by the
Department; and (v) evidence other than factual information described
in (i)-(iv). The final rule requires any party, when submitting factual
information, to specify under which subsection of 19 CFR 351.102(b)(21)
the information is being submitted and, if the information is submitted
to rebut, clarify, or correct factual information already on the
record, to provide an explanation identifying the information already
on the record that the factual information seeks to rebut, clarify, or
correct. The final rule also modified 19 CFR 351.301 so that, rather
than providing general time limits, there are specific time limits
based on the type of factual information being submitted. These
modifications are effective for all segments initiated on or after May
10, 2013, and thus are applicable to this investigation. Please review
the final rule, available at http://enforcement.trade.gov/frn/2013/1304frn/2013-08227.txt, prior to submitting factual information in this
investigation.
Certification Requirements
Any party submitting factual information in an AD or CVD proceeding
must certify to the accuracy and completeness of that information.\36\
Parties are hereby reminded that the Department issued a final rule
with respect to certification requirements, effective August 16, 2013.
Parties are hereby reminded that revised certification requirements are
in effect for company/government officials as well as their
representatives. All segments of any AD or CVD proceedings initiated on
or after August 16, 2013, including this investigation, should use the
formats for the revised certifications provided at the end of the Final
Rule.\37\ The Department intends to reject factual submissions if the
submitting party does not comply with the applicable revised
certification requirements.
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\36\ See section 782(b) of the Act.
\37\ See Certification of Factual Information To Import
Administration During Antidumping and Countervailing Duty
Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule); see also the
frequently asked questions regarding the Final Rule, available at
the following: http://enforcement.trade.gov/tlei/notices/factual_info_final_rule_FAQ_07172013.pdf.
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Extension of Time Limits
On September 20, 2013, the Department published Extension of Time
Limits, Final Rule, 78 FR 57790 (September 20, 2013), which modified
one regulation related to AD and CVD proceedings regarding the
extension of time limits for submissions in such proceedings (19 CFR
351.302(c)). These modifications are effective for all segments
initiated on or after October 21, 2013, and thus are applicable to this
investigation. Please review the final rule, available at http://www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013-22853.htm prior to
requesting an extension.
Notification to Interested Parties
Interested parties must submit applications for disclosure under
APO 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 (January
22, 2008). 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)).
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: April 17, 2014.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.
Appendix--Scope of the Investigation
The product covered by this investigation is sugar derived from
sugar cane or sugar beets. Sucrose gives sugar its essential
character. Sucrose is a nonreducing disaccharide composed of glucose
and fructose linked via their anomeric carbons. The molecular
formula for sucrose is C12H22011,
the International Union of Pure and Applied Chemistry (IUPAC)
International Chemical Identifier (InChl) for sucrose is 1S/
C12H22O11/c13-1-4-6(16)8(18)9(19)11(21-4)23-12(3-15)10(20)7(17)5(2-
14)22-12/h4-11,13-20H,1-3H2/t4-,5-,6-,7-,8+,9-,10+,11-,12+/m1/s1,
the InChl Key for sucrose is CZMRCDWAGMRECN-UGDNZRGBSA-N, the U.S.
National Institutes of Health PubChem Compound Identifier (CID) for
sucrose is 5988, and the Chemical Abstracts Service (CAS) Number of
sucrose is 57-50-1.
Sugar within the scope of this investigation includes raw sugar
(sugar with a sucrose content by weight in a dry state that
corresponds to a polarimeter reading of less than 99.5 degrees) and
estandar or standard sugar which is sometimes referred to as ``high
polarity'' or ``semi-refined'' sugar (sugar with a sucrose content
by weight in a dry state that corresponds to a polarimeter reading
of 99.2 to 99.6 degrees). Sugar within the scope of this
investigation includes refined sugar with a sucrose content by
weight in a dry state that corresponds to a polarimeter reading of
at least 99.9 degrees. Sugar within the scope of this investigation
includes brown sugar, liquid sugar (sugar dissolved in water),
organic raw sugar and organic refined sugar.
Inedible molasses is not within the scope of this investigation.
Specialty sugars, e.g., rock candy, fondant, sugar decorations, are
not within the scope of this investigation. Processed food products
that contain sugar, e.g., beverages, candy, cereals, are not within
the scope of this investigation.
Merchandise covered by this investigation is typically imported
under the following headings of the Harmonized Tariff Schedule of
the United States (HTSUS): 1701.12.1000, 1701.12.5000, 1701.13.1000,
1701.13.5000, 1701.14.1000, 1701.14.5000, 1701.91.1000,
1701.91.3000, 1701.99.1025, 1701.99.1050, 1701.99.5025,
1701.99.5050, and 1702.90.4000. The tariff classification is
provided for convenience and customs purposes; however, the written
description of the scope of this investigation is dispositive.
[FR Doc. 2014-09362 Filed 4-23-14; 8:45 am]
BILLING CODE 3510-DS-P