Notice of Initiation of Countervailing Duty Investigation: Light-Walled Rectangular Pipe and Tube from the People's Republic of China, 40281-40284 [E7-14277]
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Federal Register / Vol. 72, No. 141 / Tuesday, July 24, 2007 / Notices
requested an administrative review of
its sales for this period, and on March
30, 2007, Corus Engineering Steels
(CES), a division of Corus UK Limited,
requested an administrative of its sales
for this period. On April 27, 2007, the
Department published a notice of
initiation of an administrative review of
the antidumping duty order on stainless
steel bar from the United Kingdom with
respect to these companies. See
Initiation of Antidumping and
Countervailing Duty Administrative
Reviews, 72 FR 20986 (April 27, 2007).
Rescission of Review
On June 4, 2005, Sandvik Bioline
timely withdrew its request for an
administrative review of its sales during
the above–referenced period. One June
27 and July 6, 2007, Enpar and CES,
respectively, also withdrew their
requests for an administrative review of
their sales during the above–referenced
period. Section 351.213(d)(1) of the
Department’s regulations stipulates that
the Secretary will rescind an
administrative review if the party that
requests a review withdraws the request
within 90 days of the date of publication
of notice of initiation of the requested
review. In this case, Sandvik, Enpar and
CES have withdrawn their requests for
review within the 90-day period. As
these three companies were the only
parties to request the initiation of the
review, we are rescinding this review of
the antidumping duty order on stainless
steel bar from the United Kingdom
pursuant to 19 CFR 351.213(d)(1).
Accordingly, we will instruct U.S.
Customs and Border Protection to
liquidate entries of the subject
merchandise made during the period
March 1, 2006, through February 28,
2007, at the rate in effect for each
company upon the date of entry.
This notice is published in
accordance with section 751 of the
Tariff Act of 1930, as amended, and 19
CFR 351.213(d)(4).
Dated: July 16, 2007.
Stephen J. Claeys,
Deputy Assistant Secretary for Import
Administration.
[FR Doc. E7–14287 Filed 7–23–07; 8:45 am]
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BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
(C–570–915)
Notice of Initiation of Countervailing
Duty Investigation: Light–Walled
Rectangular Pipe and Tube from the
People’s Republic of China
Import Administration,
International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: July 24, 2007.
FOR FURTHER INFORMATION CONTACT:
Damian Felton, Shane Subler or
Brandon Farlander, AD/CVD
Operations, Import Administration,
International Trade Administration,
U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW,
Washington, DC 20230; telephone: (202)
482–0133, (202) 482–0189 and (202)
482–0182, respectively.
SUPPLEMENTARY INFORMATION:
AGENCY:
The Petition
On June 27, 2007, the Department of
Commerce (‘‘the Department’’) received
a petition filed in proper form by Allied
Tube & Conduit; Atlas Tube; Bull Moose
Tube Company; California Steel and
Tube; EXLTUBE; Hannibal Industries;
Levitt Tube Company LLC, Maruichi
American Corporation; Searing
Industries; Southland Tube; Vest Inc.;
Welded Tube; and Western Tube and
Conduit (collectively, ‘‘petitioners’’).
The Department received timely
information from petitioners
supplementing the petition on July 6,
July 9 and July 12, 2007.
In accordance with section 702(b)(1)
of the Tariff Act of 1930, as amended
(‘‘the Act’’), petitioners allege that
manufacturers, producers, or exporters
of light–walled rectangular (‘‘LWR’’)
pipe and tube in the People’s Republic
of China ( the ‘‘PRC’’), receive
countervailable subsidies within the
meaning of section 701 of the Act and
that such imports are materially
injuring, or threatening material injury
to, an industry in the United States.
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) and (D) of the Act and
petitioners have demonstrated sufficient
industry support with respect to the
countervailing duty investigation (see
‘‘Determination of Industry Support for
the Petition’’ section below).
Scope of Investigation
The merchandise that is the subject of
this investigation is certain welded
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40281
carbon–quality light–walled steel pipe
and tube, of rectangular (including
square) cross section (LWR), having a
wall thickness of less than 4mm.
The term carbon–quality steel
includes both carbon steel and alloy
steel which contains only small
amounts of alloying elements.
Specifically, the term carbon–quality
includes products in which none of the
elements listed below exceeds the
quantity by weight respectively
indicated: 1.80 percent of manganese, or
2.25 percent of silicon, or 1.00 percent
of copper, or 0.50 percent of aluminum,
or 1.25 percent of chromium, or 0.30
percent of cobalt, or 0.40 percent of
lead, or 1.25 percent of nickel, or 0.30
percent of tungsten, or 0.10 percent of
molybdenum, or 0.10 percent of
niobium, or 0.15 percent vanadium, or
0.15 percent of zirconium. The
description of carbon–quality is
intended to identify carbon–quality
products within the scope. The welded
carbon–quality rectangular pipe and
tube subject to this investigation is
currently classified under the
Harmonized Tariff Schedule of the
United States (‘‘HTSUS’’) subheadings
7306.61.50.00 and 7306.61.70.60. While
HTSUS subheadings are provided for
convenience and Customs purposes, our
written description of the scope of these
investigations is dispositive.
Comments on Scope of Investigation
During our review of the petition, we
discussed the scope with the petitioners
to ensure that it is an accurate reflection
of the products for which the domestic
industry is seeking relief. Moreover, as
discussed in the preamble to the
regulations (Antidumping Duties;
Countervailing Duties; Final Rule, 62 FR
27296, 27323 (May 19, 1997)), we are
setting aside a period for interested
parties to raise issues regarding product
coverage. The Department encourages
all interested parties to submit such
comments within 20 calendar days of
the publication of this notice.
Comments should be addressed to
Import Administration’s Central
Records Unit (‘‘CRU’’), Room 1870, U.S.
Department of Commerce, 14th Street
and Constitution Avenue, NW,
Washington, DC 20230. The period of
scope consultations is intended to
provide the Department with ample
opportunity to consider all comments
and to consult with parties prior to the
issuance of the preliminary
determinations.
Consultations
Pursuant to section 702(b)(4)(A)(ii) of
the Act, the Department invited
representatives of the Government of the
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PRC for consultations with respect to
the countervailing duty petition. The
Department held these consultations in
Beijing, China with representatives of
the Government of the PRC on July 16,
2007. See the Memoranda to The File,
entitled, ‘‘Consultations with Officials
from the Government of the People’s
Republic of China’’ (July 16, 2007)
(public documents on file in the CRU of
the Department of Commerce, Room B–
099).
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.
Section 771(4)(A) of the Act defines
the ‘‘industry’’ as the producers as a
whole of a domestic like product. Thus,
to determine whether a petition has the
requisite industry support, the statute
directs the Department to look to
producers and workers who produce the
domestic like product. The International
Trade Commission (‘‘ITC’’), which is
responsible for determining whether
‘‘the domestic industry’’ has been
injured, must also determine what
constitutes a domestic like product in
order to define the industry. While both
the Department and the ITC must apply
the same statutory definition regarding
the domestic like product (section
771(10) of the Act), they do so for
different purposes and pursuant to a
separate and distinct authority. In
addition, the Department’s
determination is subject to limitations of
time and information. Although this
may result in different definitions of the
like product, such differences do not
render the decision of either agency
contrary to law. See USEC, Inc. v.
United States, 132 F. Supp. 2d 1, 8 (CIT
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2001), citing Algoma Steel Corp. Ltd. v.
United States, 688 F. Supp. 639, 644
(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 subtitle.’’ Thus,
the reference point from which the
domestic like product analysis begins is
‘‘the article subject to an investigation,’’
(i.e., the class or kind of merchandise to
be investigated, which normally will be
the scope as defined in the petition).
With regard to the domestic like
product, petitioners do not offer a
definition of domestic like product
distinct from the scope of the
investigation. Based on our analysis of
the information submitted on the
record, we have determined that LWR
pipe and tube constitutes a single
domestic like product and we have
analyzed industry support in terms of
that domestic like product. For a
discussion of the domestic like product
analysis in this case, see Countervailing
Duty Investigation Initiation Checklist:
Light–Walled Rectangular Pipe and
Tube from the People’s Republic of
China, (China Initiation Checklist) at
Attachment II, (Analysis of Industry
Support), on file in the Central Records
Unit, Room B–099 of the main
Department of Commerce building.
In determining whether petitioners
have standing (i.e., those domestic
workers and producers supporting the
petition account for; (1) at least 25
percent of the total production of the
domestic like product; and (2) 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), we considered the industry
support data contained in the petition
with reference to the domestic like
product as defined in Attachment I,
(Scope of the Petition), to the China
Initiation Checklist. To establish
industry support, petitioners provided
their production of the domestic like
product for the year 2006, and
compared that to production of the
domestic like product for the industry.
For further discussion see the China
Initiation Checklist at Attachment II
(Analysis of Industry Support).
Our review of the data provided in the
petition, supplemental submissions, and
other information readily available to
the Department indicates that
petitioners have established industry
support. First, the domestic producers
have met the statutory criteria for
industry support under section
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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. Second, the
domestic producers 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. Because the petition
established support from domestic
producers (or workers) accounting for
more than 50 percent of the total
production of the domestic like product,
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.
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 the China Initiation Checklist
at Attachment II (Analysis of Industry
Support).
The Department finds that petitioners
filed the petition on behalf of the
domestic industry because they are an
interested party as defined in sections
771(9)(C) and (D) of the Act and they
have demonstrated sufficient industry
support with respect to the
countervailing duty investigation that
they are requesting the Department
initiate. See China Initiation Checklist at
Attachment II (Analysis of Industry
Support).
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
Petitioners allege that imports of LWR
pipe and tube from the PRC are
benefitting from countervailable
subsidies and that such imports are
causing or threatening to cause, material
injury to the domestic industry
producing LWR pipe and tube. In
addition, petitioners allege that
subsidized imports exceed the
negligibility threshold provided for
under section 771(24)(A) of the Act.
Petitioners contend that the industry’s
injured condition is illustrated by
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reduced market share, lost sales,
reduced production, reduced capacity
and capacity utilization rate, reduced
shipments and increased inventories,
underselling and price depression or
suppression, lost revenue, reduced
employment, decline in financial
performance and increase in import
penetration. We have assessed the
allegations and supporting evidence
regarding 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
China Initiation Checklist at Attachment
III (Injury).
Initiation of Countervailing Duty
Investigation
Section 702(b) of the Act requires the
Department to initiate a countervailing
duty 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 petitioners
supporting the allegations. The
Department has examined the
countervailing duty petition on LWR
pipe and tube from the PRC and found
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 countervailing
duty investigation to determine whether
manufacturers, producers, or exporters
of LWR pipe and tube in the PRC
receive countervailable subsidies. For a
discussion of evidence supporting our
initiation determination, see China
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:
Preferential Lending
1. Government Policy Lending
Program
2. Loans and interest subsidies
provided pursuant to the Northeast
Revitalization Program
Income Tax Programs
3. ‘‘Two Free, Three Half’’ program
4. Income tax exemption program for
export–oriented foreign investment
enterprises (‘‘FIEs’’)
5. Corporate income tax refund
program for reinvestment of FIE
profits in export–oriented
enterprises
6. Local income tax exemption and
reduction program for ‘‘productive’’
FIEs
7. Reduced income tax rates for FIEs
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based on location
8. Reduced income tax rate for
knowledge or technology intensive
FIEs
9. Reduced income tax rate for high or
new technology FIEs
10. Preferential tax policies for
research and development at FIEs
11. Income tax credits on purchases of
domestically produced equipment
by domestically–owned companies
12. Income tax credits on purchases of
domestically produced equipment
by FIEs
Provincial Subsidy Programs
13. Program to rebate antidumping
legal fees in Zhejiang province
14. Export interest subsidy funds for
enterprises located in Zhejiang
province
15. Loans pursuant to the Liaoning
Province’s five–year framework
Indirect Tax Programs and Import
Tariff Program
16. Export payments characterized as
VAT rebates
17. VAT and tariff exemptions on
imported equipment
18. VAT rebates on domestically
produced equipment
19. Exemption from payment of staff
and worker benefits for export–
oriented enterprises
Grant Programs
20. State Key Technology Renovation
Program Fund
21. Grants to loss–making state owned
enterprises
Provision Of Goods Or Services For
Less Than Adequate Remuneration
22. Hot–rolled steel
23. Electricity and natural gas
24. Water
25. Land
Government Restraints on Exports
26. Zinc
27. Hot–rolled steel
For further information explaining
why the Department is investigating
these programs, see China Initiation
Checklist.
We are postponing our investigation
of the following program until such time
as we select our respondents because
the allegation is company–specific:
1. Loans to uncreditworthy companies
For further information explaining
why the Department is postponing
investigation of this program, see China
Initiation Checklist.
We are not including in our
investigation the following programs
alleged to benefit producers and
exporters of the subject merchandise in
the PRC:
1. Currency manipulation
Petitioners allege that the Government
of China’s (‘‘GOC’’) policy of
maintaining an undervalued RMB is an
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40283
export subsidy that provides either a
direct transfer of funds or the provision
of a good or service at less than
adequate remuneration. Petitioners have
not sufficiently alleged the elements
necessary for the imposition of a
countervailing duty and did not support
the allegation with reasonably available
information. Therefore, we do not plan
to investigate the currency manipulation
program.
2. Tax incentives for companies
engaging in research and
development
Petitioners allege that ‘‘domestic’’
companies (i.e., companies that are not
FIEs) are a de jure specific group.
Petitioners have not established with
reasonably available evidence that this
program is de jure specific pursuant to
section 771(5A)(D)(i) of the Act.
Therefore, we do not plan to investigate
tax incentives for ‘‘domestic’’
companies engaging in research and
development.
3. Exemption of LWR pipe and tube
from export taxes
Petitioners allege that LWR pipe and
tube producers have been exempted
from the export taxes that were imposed
on 142 steel products effective June 1,
2007. Petitioners have not sufficiently
alleged, on the basis of reasonably
available information, that LWR pipe
and tube producers have been relieved
from paying export taxes that would
otherwise have been due. Consequently,
we do not plan to investigation the
exemption of LWR pipe and tube
producers from export taxes.
4. Funds for technology and research
Petitioners allege that because the
GOC did not provide the criteria for
awarding funds under this program
when they notified it to the World Trade
Organization, funds are awarded on a
discretionary basis and, hence, specific.
Petitioners have not adequately
explained how this program is specific
pursuant to section 771(5A)(D)(i) of the
Act. Therefore, we do not plan to
investigate funds for technology and
research.
5. Provision of goods or services for
less than adequate remuneration other companies
Petitioners allege that the GOC’s
policy of combining steel companies
results in the provision of productive
assets to the combined companies at
less than adequate remuneration.
Petitioners have not sufficiently alleged
the elements necessary for the
imposition of a countervailing duty and
did not support the allegation with
reasonably available information.
Consequently, we do not plan to
investigate this program.
6. Loan guarantees from government–
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owned banks
As part of their Government Policy
Lending allegation, petitioners include
loan guarantees. To support this
allegation, they point to a provincial
guarantee program. However, the
supporting evidence indicates that this
program is for small and medium size
enterprises, a non–specific group under
our regulations. See 19 C.F.R.
351.502(e). Accordingly, we do not plan
to investigate loan guarantees from
government–owned banks.
7. Program to rebate antidumping
legal fees in Shenzhen province
Petitioners allege that the GOC is
reimbursing legal fees to local
companies located in the Shenzhen
province that are facing antidumping
duty investigations abroad. However,
petitioners did not demonstrate that
producers of LWR pipe and tube are
located in the Shenzhen Province or
explain why such information is
unavailable. Therefore, we do not
recommend investigating the program to
rebate antidumping legal fees in the
Shenzhen province.
8. Export interest subsidy funds for
enterprises located in Shenzhen
province
Petitioners allege that producers of
LWR pipe and tube with specific export
volumes are eligible for export interest
subsidies for merchandise produced in
the Shenzhen province. However,
petitioners did not demonstrate that
producers of LWR pipe and tube are
located in the Shenzhen province, or
explain why such information is
unavailable. Therefore, we do not
recommend investigating the program
for export interest subsidy funds for
enterprises located in Shenzhen
province.
9. Funds for ‘‘outward expansion’’ of
industries in Guangdong province
Petitioners allege that eligible LWR
pipe and tube producers in the
Guangdong province may apply for
special funding for the development of
export activities. However, Petitioners
did not demonstrate that producers of
LWR pipe and tube are located in the
Guangdong province or explain why
such information is unavailable.
Therefore, we do not recommend
investigating the program of the funds
for outward expansion of industries in
Guangdong province.
10. Domestic VAT refunds for
companies located in the Hainan
economic development zone
This program was found to be
preliminarily countervailable in CFS
Investigation. See Coated Free Sheet
Paper from the People’s Republic of
China; Amended Preliminary
Affirmative Countervailing Duty
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Determination, 72 FR 17484, 17496
(April 9, 2007) (‘‘CFS Investigation’’).
However, petitioners did not
demonstrate that producers of LWR pipe
and tube are located in the Hainan
economic development zone or explain
why such information is unavailable.
Therefore, we do not recommend
investigating the program on domestic
VAT refunds for companies located in
the Hainan economic development
zone.
For further information explaining
why the Department is not initiating an
investigation of these programs, see
China Initiation Checklist.
Georgetown Steel litigation does not
prevent us from concluding that the
PRC government has bestowed a
countervailable subsidy upon a Chinese
producer. See Georgetown Steel
Memorandum. Therefore, because
petitioners have provided sufficient
allegations and support for their
allegations to meet the statutory criteria
for initiating a countervailing duty
investigation of LWR pipe and tube
from the PRC, we continue to find that
Georgetown Steel does not preclude us
from initiating this investigation. For
further information, see China Initiation
Checklist.
Application of the Countervailing Duty
Law to the PRC
Petitioners argue that the Department
recently concluded that CVD law may
be applied to the present–day Chinese
economy and, thus, the Department
should continue to find that the
countervailing duty law applies to the
PRC in this investigation. See Petition,
Volume III, at page 2 (citing CFS
Investigation, 72 FR 17484, 17486; and
Memorandum for David M. Spooner,
Assistant Secretary for Import
Administration, entitled
‘‘Countervailing Duty Investigation of
Coated Free Sheet Paper from The
People’s Republic of China - Whether
the Analytic Elements of the
Georgetown Steel Opinion are
Applicable to China’s Present–Day
Economy,’’ (March 29, 2007) (citing
Georgetown Steel Corp. v. United States,
801 F.2d 1308 (Fed. Cir. 1986)
(‘‘Georgetown Steel’’) (‘‘Georgetown
Steel Memorandum’’)).
The Department has treated the PRC
as a non–market economy (‘‘NME’’)
country in all past antidumping duty
investigations and administrative
reviews. In accordance with section
771(18)(C)(i) of the Act, any
determination that a country is an NME
country shall remain in effect until
revoked by the administering authority.
See Tapered Roller Bearings and Parts
Thereof, Finished and Unfinished,
(‘‘TRBs’’) From the People’s Republic of
China: Preliminary Results of 2001–
2002 Administrative Review and Partial
Rescission of Review, 68 FR 7500, 7500–
1 (February 14, 2003), unchanged in
TRBs from the People’s Republic of
China: Final Results of 2001–2002
Administrative Review, 68 FR 70488,
70488–89 (December 18, 2003). In the
CFS Investigation, the Department
preliminarily determined that the
current nature of China’s economy does
not create obstacles to applying the
necessary criteria in the CVD law. As
such, the Department determined that
the policy that gave rise to the
Distribution of Copies of the Petition
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In accordance with section
702(b)(4)(A)(i) of the Act, a copy of the
public version of the petition has been
provided to the Government of the PRC.
As soon as and to the extent practicable,
we will attempt to provide a copy of the
public version of the petition to each
exporter named in the petition,
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 25 days after the date on which
it receives notice of the initiation,
whether there is a reasonable indication
that imports of subsidized LWR pipe
and tube 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.
This notice is issued and published
pursuant to section 777(i) of the Act.
Dated: July 17, 2007.
Joseph A. Spetrini,
Deputy Assistant Secretary for Import
Administration.
[FR Doc. E7–14277 Filed 7–19–07; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
National Institute of Standards and
Technology
Visiting Committee on Advanced
Technology
National Institute of Standards
and Technology, Department of
Commerce.
AGENCY:
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]]>Agencies
[Federal Register Volume 72, Number 141 (Tuesday, July 24, 2007)]
[Notices]
[Pages 40281-40284]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14277]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
(C-570-915)
Notice of Initiation of Countervailing Duty Investigation: Light-
Walled Rectangular Pipe and Tube from the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: July 24, 2007.
FOR FURTHER INFORMATION CONTACT: Damian Felton, Shane Subler or Brandon
Farlander, 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-
0133, (202) 482-0189 and (202) 482-0182, respectively.
SUPPLEMENTARY INFORMATION:
The Petition
On June 27, 2007, the Department of Commerce (``the Department'')
received a petition filed in proper form by Allied Tube & Conduit;
Atlas Tube; Bull Moose Tube Company; California Steel and Tube;
EXLTUBE; Hannibal Industries; Levitt Tube Company LLC, Maruichi
American Corporation; Searing Industries; Southland Tube; Vest Inc.;
Welded Tube; and Western Tube and Conduit (collectively,
``petitioners''). The Department received timely information from
petitioners supplementing the petition on July 6, July 9 and July 12,
2007.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as
amended (``the Act''), petitioners allege that manufacturers,
producers, or exporters of light-walled rectangular (``LWR'') pipe and
tube in the People's Republic of China ( the ``PRC''), receive
countervailable subsidies within the meaning of section 701 of the Act
and that such imports are materially injuring, or threatening material
injury to, an industry in the United States.
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) and (D) of the Act and petitioners have
demonstrated sufficient industry support with respect to the
countervailing duty investigation (see ``Determination of Industry
Support for the Petition'' section below).
Scope of Investigation
The merchandise that is the subject of this investigation is
certain welded carbon-quality light-walled steel pipe and tube, of
rectangular (including square) cross section (LWR), having a wall
thickness of less than 4mm.
The term carbon-quality steel includes both carbon steel and alloy
steel which contains only small amounts of alloying elements.
Specifically, the term carbon-quality includes products in which none
of the elements listed below exceeds the quantity by weight
respectively indicated: 1.80 percent of manganese, or 2.25 percent of
silicon, or 1.00 percent of copper, or 0.50 percent of aluminum, or
1.25 percent of chromium, or 0.30 percent of cobalt, or 0.40 percent of
lead, or 1.25 percent of nickel, or 0.30 percent of tungsten, or 0.10
percent of molybdenum, or 0.10 percent of niobium, or 0.15 percent
vanadium, or 0.15 percent of zirconium. The description of carbon-
quality is intended to identify carbon-quality products within the
scope. The welded carbon-quality rectangular pipe and tube subject to
this investigation is currently classified under the Harmonized Tariff
Schedule of the United States (``HTSUS'') subheadings 7306.61.50.00 and
7306.61.70.60. While HTSUS subheadings are provided for convenience and
Customs purposes, our written description of the scope of these
investigations is dispositive.
Comments on Scope of Investigation
During our review of the petition, we discussed the scope with the
petitioners to ensure that it is an accurate reflection of the products
for which the domestic industry is seeking relief. Moreover, as
discussed in the preamble to the regulations (Antidumping Duties;
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)),
we are setting aside a period for interested parties to raise issues
regarding product coverage. The Department encourages all interested
parties to submit such comments within 20 calendar days of the
publication of this notice. Comments should be addressed to Import
Administration's Central Records Unit (``CRU''), Room 1870, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, DC 20230. The period of scope consultations is intended to
provide the Department with ample opportunity to consider all comments
and to consult with parties prior to the issuance of the preliminary
determinations.
Consultations
Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department
invited representatives of the Government of the
[[Page 40282]]
PRC for consultations with respect to the countervailing duty petition.
The Department held these consultations in Beijing, China with
representatives of the Government of the PRC on July 16, 2007. See the
Memoranda to The File, entitled, ``Consultations with Officials from
the Government of the People's Republic of China'' (July 16, 2007)
(public documents on file in the CRU of the Department of Commerce,
Room B-099).
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.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers as a whole of a domestic like product. Thus, to determine
whether a petition has the requisite industry support, the statute
directs the Department to look to producers and workers who produce the
domestic like product. The International Trade Commission (``ITC''),
which is responsible for determining whether ``the domestic industry''
has been injured, must also determine what constitutes a domestic like
product in order to define the industry. While both the Department and
the ITC must apply the same statutory definition regarding the domestic
like product (section 771(10) of the Act), they do so for different
purposes and pursuant to a separate and distinct authority. In
addition, the Department's determination is subject to limitations of
time and information. Although this may result in different definitions
of the like product, such differences do not render the decision of
either agency contrary to law. See USEC, Inc. v. United States, 132 F.
Supp. 2d 1, 8 (CIT 2001), citing Algoma Steel Corp. Ltd. v. United
States, 688 F. Supp. 639, 644 (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 subtitle.'' Thus, the reference point from which the
domestic like product analysis begins is ``the article subject to an
investigation,'' (i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition).
With regard to the domestic like product, petitioners do not offer
a definition of domestic like product distinct from the scope of the
investigation. Based on our analysis of the information submitted on
the record, we have determined that LWR pipe and tube constitutes a
single domestic like product and we have analyzed industry support in
terms of that domestic like product. For a discussion of the domestic
like product analysis in this case, see Countervailing Duty
Investigation Initiation Checklist: Light-Walled Rectangular Pipe and
Tube from the People's Republic of China, (China Initiation Checklist)
at Attachment II, (Analysis of Industry Support), on file in the
Central Records Unit, Room B-099 of the main Department of Commerce
building.
In determining whether petitioners have standing (i.e., those
domestic workers and producers supporting the petition account for; (1)
at least 25 percent of the total production of the domestic like
product; and (2) 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), we considered the
industry support data contained in the petition with reference to the
domestic like product as defined in Attachment I, (Scope of the
Petition), to the China Initiation Checklist. To establish industry
support, petitioners provided their production of the domestic like
product for the year 2006, and compared that to production of the
domestic like product for the industry. For further discussion see the
China Initiation Checklist at Attachment II (Analysis of Industry
Support).
Our review of the data provided in the petition, supplemental
submissions, and other information readily available to the Department
indicates that petitioners have established industry support. First,
the domestic producers 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. Second,
the domestic producers 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. Because the petition established support from domestic
producers (or workers) accounting for more than 50 percent of the total
production of the domestic like product, 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. 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 the China Initiation Checklist at Attachment II (Analysis of
Industry Support).
The Department finds that petitioners filed the petition on behalf
of the domestic industry because they are an interested party as
defined in sections 771(9)(C) and (D) of the Act and they have
demonstrated sufficient industry support with respect to the
countervailing duty investigation that they are requesting the
Department initiate. See China Initiation Checklist at Attachment II
(Analysis of Industry Support).
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
Petitioners allege that imports of LWR pipe and tube from the PRC
are benefitting from countervailable subsidies and that such imports
are causing or threatening to cause, material injury to the domestic
industry producing LWR pipe and tube. In addition, petitioners allege
that subsidized imports exceed the negligibility threshold provided for
under section 771(24)(A) of the Act.
Petitioners contend that the industry's injured condition is
illustrated by
[[Page 40283]]
reduced market share, lost sales, reduced production, reduced capacity
and capacity utilization rate, reduced shipments and increased
inventories, underselling and price depression or suppression, lost
revenue, reduced employment, decline in financial performance and
increase in import penetration. We have assessed the allegations and
supporting evidence regarding 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 China Initiation Checklist at Attachment III (Injury).
Initiation of Countervailing Duty Investigation
Section 702(b) of the Act requires the Department to initiate a
countervailing duty 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
petitioners supporting the allegations. The Department has examined the
countervailing duty petition on LWR pipe and tube from the PRC and
found 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 countervailing duty investigation to determine whether
manufacturers, producers, or exporters of LWR pipe and tube in the PRC
receive countervailable subsidies. For a discussion of evidence
supporting our initiation determination, see China 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:
Preferential Lending
1. Government Policy Lending Program
2. Loans and interest subsidies provided pursuant to the Northeast
Revitalization Program
Income Tax Programs
3. ``Two Free, Three Half'' program
4. Income tax exemption program for export-oriented foreign
investment enterprises (``FIEs'')
5. Corporate income tax refund program for reinvestment of FIE
profits in export-oriented enterprises
6. Local income tax exemption and reduction program for
``productive'' FIEs
7. Reduced income tax rates for FIEs based on location
8. Reduced income tax rate for knowledge or technology intensive
FIEs
9. Reduced income tax rate for high or new technology FIEs
10. Preferential tax policies for research and development at FIEs
11. Income tax credits on purchases of domestically produced
equipment by domestically-owned companies
12. Income tax credits on purchases of domestically produced
equipment by FIEs
Provincial Subsidy Programs
13. Program to rebate antidumping legal fees in Zhejiang province
14. Export interest subsidy funds for enterprises located in
Zhejiang province
15. Loans pursuant to the Liaoning Province's five-year framework
Indirect Tax Programs and Import Tariff Program
16. Export payments characterized as VAT rebates
17. VAT and tariff exemptions on imported equipment
18. VAT rebates on domestically produced equipment
19. Exemption from payment of staff and worker benefits for export-
oriented enterprises
Grant Programs
20. State Key Technology Renovation Program Fund
21. Grants to loss-making state owned enterprises
Provision Of Goods Or Services For Less Than Adequate Remuneration
22. Hot-rolled steel
23. Electricity and natural gas
24. Water
25. Land
Government Restraints on Exports
26. Zinc
27. Hot-rolled steel
For further information explaining why the Department is
investigating these programs, see China Initiation Checklist.
We are postponing our investigation of the following program until
such time as we select our respondents because the allegation is
company-specific:
1. Loans to uncreditworthy companies
For further information explaining why the Department is postponing
investigation of this program, see China Initiation Checklist.
We are not including in our investigation the following programs
alleged to benefit producers and exporters of the subject merchandise
in the PRC:
1. Currency manipulation
Petitioners allege that the Government of China's (``GOC'') policy
of maintaining an undervalued RMB is an export subsidy that provides
either a direct transfer of funds or the provision of a good or service
at less than adequate remuneration. Petitioners have not sufficiently
alleged the elements necessary for the imposition of a countervailing
duty and did not support the allegation with reasonably available
information. Therefore, we do not plan to investigate the currency
manipulation program.
2. Tax incentives for companies engaging in research and
development
Petitioners allege that ``domestic'' companies (i.e., companies
that are not FIEs) are a de jure specific group. Petitioners have not
established with reasonably available evidence that this program is de
jure specific pursuant to section 771(5A)(D)(i) of the Act. Therefore,
we do not plan to investigate tax incentives for ``domestic'' companies
engaging in research and development.
3. Exemption of LWR pipe and tube from export taxes
Petitioners allege that LWR pipe and tube producers have been
exempted from the export taxes that were imposed on 142 steel products
effective June 1, 2007. Petitioners have not sufficiently alleged, on
the basis of reasonably available information, that LWR pipe and tube
producers have been relieved from paying export taxes that would
otherwise have been due. Consequently, we do not plan to investigation
the exemption of LWR pipe and tube producers from export taxes.
4. Funds for technology and research
Petitioners allege that because the GOC did not provide the
criteria for awarding funds under this program when they notified it to
the World Trade Organization, funds are awarded on a discretionary
basis and, hence, specific. Petitioners have not adequately explained
how this program is specific pursuant to section 771(5A)(D)(i) of the
Act. Therefore, we do not plan to investigate funds for technology and
research.
5. Provision of goods or services for less than adequate
remuneration - other companies
Petitioners allege that the GOC's policy of combining steel
companies results in the provision of productive assets to the combined
companies at less than adequate remuneration. Petitioners have not
sufficiently alleged the elements necessary for the imposition of a
countervailing duty and did not support the allegation with reasonably
available information. Consequently, we do not plan to investigate this
program.
6. Loan guarantees from government-
[[Page 40284]]
owned banks
As part of their Government Policy Lending allegation, petitioners
include loan guarantees. To support this allegation, they point to a
provincial guarantee program. However, the supporting evidence
indicates that this program is for small and medium size enterprises, a
non-specific group under our regulations. See 19 C.F.R. 351.502(e).
Accordingly, we do not plan to investigate loan guarantees from
government-owned banks.
7. Program to rebate antidumping legal fees in Shenzhen province
Petitioners allege that the GOC is reimbursing legal fees to local
companies located in the Shenzhen province that are facing antidumping
duty investigations abroad. However, petitioners did not demonstrate
that producers of LWR pipe and tube are located in the Shenzhen
Province or explain why such information is unavailable. Therefore, we
do not recommend investigating the program to rebate antidumping legal
fees in the Shenzhen province.
8. Export interest subsidy funds for enterprises located in
Shenzhen province
Petitioners allege that producers of LWR pipe and tube with
specific export volumes are eligible for export interest subsidies for
merchandise produced in the Shenzhen province. However, petitioners did
not demonstrate that producers of LWR pipe and tube are located in the
Shenzhen province, or explain why such information is unavailable.
Therefore, we do not recommend investigating the program for export
interest subsidy funds for enterprises located in Shenzhen province.
9. Funds for ``outward expansion'' of industries in Guangdong
province
Petitioners allege that eligible LWR pipe and tube producers in the
Guangdong province may apply for special funding for the development of
export activities. However, Petitioners did not demonstrate that
producers of LWR pipe and tube are located in the Guangdong province or
explain why such information is unavailable. Therefore, we do not
recommend investigating the program of the funds for outward expansion
of industries in Guangdong province.
10. Domestic VAT refunds for companies located in the Hainan
economic development zone
This program was found to be preliminarily countervailable in CFS
Investigation. See Coated Free Sheet Paper from the People's Republic
of China; Amended Preliminary Affirmative Countervailing Duty
Determination, 72 FR 17484, 17496 (April 9, 2007) (``CFS
Investigation''). However, petitioners did not demonstrate that
producers of LWR pipe and tube are located in the Hainan economic
development zone or explain why such information is unavailable.
Therefore, we do not recommend investigating the program on domestic
VAT refunds for companies located in the Hainan economic development
zone.
For further information explaining why the Department is not
initiating an investigation of these programs, see China Initiation
Checklist.
Application of the Countervailing Duty Law to the PRC
Petitioners argue that the Department recently concluded that CVD
law may be applied to the present-day Chinese economy and, thus, the
Department should continue to find that the countervailing duty law
applies to the PRC in this investigation. See Petition, Volume III, at
page 2 (citing CFS Investigation, 72 FR 17484, 17486; and Memorandum
for David M. Spooner, Assistant Secretary for Import Administration,
entitled ``Countervailing Duty Investigation of Coated Free Sheet Paper
from The People's Republic of China - Whether the Analytic Elements of
the Georgetown Steel Opinion are Applicable to China's Present-Day
Economy,'' (March 29, 2007) (citing Georgetown Steel Corp. v. United
States, 801 F.2d 1308 (Fed. Cir. 1986) (``Georgetown Steel'')
(``Georgetown Steel Memorandum'')).
The Department has treated the PRC as a non-market economy
(``NME'') country in all past antidumping duty investigations and
administrative reviews. In accordance with section 771(18)(C)(i) of the
Act, any determination that a country is an NME country shall remain in
effect until revoked by the administering authority. See Tapered Roller
Bearings and Parts Thereof, Finished and Unfinished, (``TRBs'') From
the People's Republic of China: Preliminary Results of 2001-2002
Administrative Review and Partial Rescission of Review, 68 FR 7500,
7500-1 (February 14, 2003), unchanged in TRBs from the People's
Republic of China: Final Results of 2001-2002 Administrative Review, 68
FR 70488, 70488-89 (December 18, 2003). In the CFS Investigation, the
Department preliminarily determined that the current nature of China's
economy does not create obstacles to applying the necessary criteria in
the CVD law. As such, the Department determined that the policy that
gave rise to the Georgetown Steel litigation does not prevent us from
concluding that the PRC government has bestowed a countervailable
subsidy upon a Chinese producer. See Georgetown Steel Memorandum.
Therefore, because petitioners have provided sufficient allegations and
support for their allegations to meet the statutory criteria for
initiating a countervailing duty investigation of LWR pipe and tube
from the PRC, we continue to find that Georgetown Steel does not
preclude us from initiating this investigation. For further
information, see China Initiation Checklist.
Distribution of Copies of the Petition
In accordance with section 702(b)(4)(A)(i) of the Act, a copy of
the public version of the petition has been provided to the Government
of the PRC. As soon as and to the extent practicable, we will attempt
to provide a copy of the public version of the petition to each
exporter named in the petition, 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 25 days after the date
on which it receives notice of the initiation, whether there is a
reasonable indication that imports of subsidized LWR pipe and tube 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.
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: July 17, 2007.
Joseph A. Spetrini,
Deputy Assistant Secretary for Import Administration.
[FR Doc. E7-14277 Filed 7-19-07; 8:45 am]
BILLING CODE 3510-DS-S
