Coated Free Sheet Paper from Indonesia: Final Affirmative Countervailing Duty Determination, 60642-60645 [E7-21040]
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60642
Federal Register / Vol. 72, No. 206 / Thursday, October 25, 2007 / Notices
Pulp Based On Monthly Weighted–
Average Prices
Comment 13: If the Department
Continues to Calculate Monthly
Weighted–Average Prices for Donghae
Pulp, Certain Methodological
Corrections Are Required
Comment 14: Hansol’s Arguments that
Donghae Pulp is Owned or Controlled
by the GOK
Comment 15: The Benefit Calculation
for Donghae Pulp’s Sale of Pulp Must
Account for Prevailing Market
Conditions
Comment 16: Whether Usance and
Document Acceptance Loans Provided
Outside of the ACCL Program Are
Countervailable
Comment 17: Whether the Department
Should Pro–Rate Benefits on D/A Loans
Under the Korea Export Import Bank
(KEXIM ) Program
Comment 18: Source Data of the
Benchmark To Be Applied to D/A Loans
Under the KEXIM Rediscount Program
and Usance Loans Issued by GOK
Authorities
Comment 19: Calculation of Benchmark
To Be Applied to D/A Loans Under the
KEXIM Rediscount Program
Comment 20: Whether Commercial
Paper and Corporate Procurement Loans
are Countervailable
Comment 21: Use of Company–Specific
Benchmark to Measure the Benefit to
Hansol Under KEXIM’s Export and
Import Credit Financing Program
Comment 22: Use of Non–CompanySpecific Benchmarks for KEXIM’s
Import and Export Credit Financing
Program
Comment 23: Whether Hansol Received
Countervailable Benefits Through the
KDB’s Placement of its Corporate Bonds
Comment 24: Whether Loans from the
Industrial Base Fund (IBF) Constitute
Countervailable Export Subsidies
Comment 25: Benchmark Rates for
Long–Term Korean Won–Denominated
Loans
XIII. RECOMMENDATION
[FR Doc. E7–21036 Filed 10–24–07; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
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C–560–821
Coated Free Sheet Paper from
Indonesia: Final Affirmative
Countervailing Duty Determination
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(the Department) has reached a final
AGENCY:
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17:26 Oct 24, 2007
Jkt 214001
determination that countervailable
subsidies are being provided to
producers and exporters of coated free
sheet paper (CFS) from Indonesia. For
information on the countervailable
subsidy rates, please see the ‘‘Final
Determination’’ section of this notice.
EFFECTIVE DATE: October 25, 2007.
FOR FURTHER INFORMATION CONTACT:
Sean Carey, Nicholas Czajkowski, or
Gene Calvert, AD/CVD Operations,
Office 6, Import Administration,
International Trade Administration,
U.S. Department of Commerce, Room
7866, 14th Street and Constitution
Avenue, NW, Washington, DC 20230;
telephone: (202) 482–3964, (202) 482–
1395, or (202) 482–3586, respectively.
SUPPLEMENTARY INFORMATION:
Case History
On April 9, 2007, the Department
published Coated Free Sheet Paper from
Indonesia: Notice of Preliminary
Affirmative Countervailing Duty
Determination, 72 FR 17498 (April 9,
2007) (Preliminary Determination).
Since the issuance of the Preliminary
Determination, the following events
have occurred. On April 10 and May 18,
2007, the Department issued
supplemental questionnaires to the
Government of Indonesia (GOI) and to
PT. Pabrik Kertas Tjiwi Kimia Tbk. (TK)
and Pindo Deli Pulp and Paper Mills
(PD) (the respondent companies). On
April 20 and May 24, 2007, the
Department issued initial and
supplemental questionnaires to the GOI
and to the respondent companies
regarding the petitioner’s December 15,
2007 additional allegations concerning
debt forgiveness. Both parties submitted
timely responses to all of the
Department’s questionnaires and
supplemental questionnaires.
On May 2, 2007, the Department
aligned the final determination in this
countervailing duty investigation with
the final determination in the
companion antidumping duty
investigation. See Coated Free Sheet
Paper from Indonesia, the People’s
Republic of China, and the Republic of
Korea: Alignment of Final
Countervailing Duty Determinations
with Final Antidumping Duty
Determinations, 72 FR 24277 (May 2,
2007). On May 10, 2007, NewPage
Corporation (the petitioner) requested a
hearing pursuant to 19 CFR 351.310(c)
and the Department’s Preliminary
Determination.
On June 18 and June 19, 2007, the
petitioner and the respondent
companies submitted new factual
information concerning the
Department’s investigation of the ‘‘GOI
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Provision of Standing Timber for Less
than Adequate Remuneration,’’ or
‘‘stumpage.’’ On June 28, 2007, the
petitioner submitted rebuttal comments
regarding the respondent companies’
new factual information submission.
From June 25 through July 13, 2007,
the Department conducted verification
of the questionnaire responses provided
by the GOI and the respondent
companies. On July 13, 2007, the
petitioner filed an upstream subsidy
allegation, claiming, in accordance with
section 771A(a) of the Tariff Act of
1930, as amended, (the Act), that (1) a
subsidy, other than an export subsidy,
has been paid or bestowed on an input
product that is used in the manufacture
or production of merchandise subject to
a countervailing duty proceeding; (2)
the subsidy bestows a competitive
benefit on the merchandise; and (3) the
subsidy has a significant effect on the
cost of manufacturing or producing the
merchandise. On July 23, 2007, the
respondent companies filed rebuttal
comments, and on August 10, 2007, the
petitioner filed surrebuttal comments on
this allegation.
The Department issued verification
reports on August 24, 2007: see
Memoranda to the File, Countervailing
Duty Investigation of Coated Free Sheet
(CFS) Paper from Indonesia:
Verification of the Questionnaire
Responses Submitted by Ministry of
Forestry and the Ministry of Finance;
Countervailing Duty Investigation of
Coated Free Sheet Paper from
Indonesia: Verification of Cross–
Ownership and Debt Restructuring for
the Asia Pulp and Paper/Sinar Mas
Group; Countervailing Duty
Investigation of Coated Free Sheet Paper
from Indonesia: Verification of PT Pindo
Deli Pulp & Paper Mills and PT. Pabrik
Kertas Tjiwi Kimia (Paper Producers/
Exports) and PT Cakrawala Mega Indah
(trading company); Countervailing Duty
Investigation of Coated Free Sheet (CFS)
Paper from Indonesia: Verification of
the Questionnaire Responses Submitted
by Pulp Producers PT. Lontar Papyrus
Pulp and Paper and Indah Kiat Pulp
and Paper Tbk.; and, Countervailing
Duty Investigation of Coated Free Sheet
(CFS) Paper from Indonesia:
Verification of the Questionnaire
Responses Submitted by Forestry
Companies PT. Arara Abadi, PT.
Wirakarya Sakti, PT. Finnantara Intiga,
and PT. Riau Abadi Lestari.
On September 5 and September 6,
2007, the petitioner, the GOI, the
respondent companies, and the United
Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied
Industrial and Service Workers
International Union, AFL–CIO, CLC
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Federal Register / Vol. 72, No. 206 / Thursday, October 25, 2007 / Notices
(USW), a domestic interested party to
this proceeding, timely filed case briefs
regarding our Preliminary
Determination. On September 11, 2007,
the petitioner, the GOI, the respondent
companies, and the USW each filed
rebuttal comments regarding our
Preliminary Determination. At the
Department’s request, the petitioner, the
GOI, and the respondent companies
removed what the Department
determined to be new factual
information from their comments and
rebuttal comments regarding the
Department’s Preliminary
Determination, and resubmitted those
comments to the Department on
September 18 and September 19, 2007.
On September 7, 2007, the
Department issued the interim analysis
of two additional subsidy allegations.
We explained in the Preliminary
Determination that because we had only
recently initiated investigations of these
two programs, there was not sufficient
time to gather information and analyze
the countervailability of the programs
for the purposes of the Preliminary
Determination. See the Memorandum to
David M. Spooner, Assistant Secretary
for Import Administration from Barbara
E. Tillman, Director, Office 6, AD/CVD
Operations, Countervailing Duty
Investigation: Coated Free Sheet Paper
from Indonesia; Post–Preliminary
Analysis of Two New Subsidy
Allegations (Post–Preliminary Analysis).
The Department set a separate briefing
schedule for parties to file comments
and rebuttal comments on our Post–
Preliminary Analysis. On September 18,
2007, such comments were filed by the
GOI and the respondent companies. The
petitioner filed rebuttal comments
regarding the Department’s Post–
Preliminary Analysis on September 25,
2007. The petitioner withdrew its
request for a hearing on September 10,
2007.
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Period of Investigation
The period of investigation (POI) for
which we are measuring subsidies is
January 1, 2005 through December 31,
2005, which corresponds to the most
recently completed fiscal year for the
respondent companies. See 19 CFR
351.204(b)(2).
Scope of the Investigation
The merchandise covered by this
investigation includes coated free sheet
paper and paperboard of a kind used for
writing, printing or other graphic
purposes. Coated free sheet paper is
produced from not–more-than 10
percent by weight mechanical or
combined chemical/mechanical fibers.
Coated free sheet paper is coated with
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17:26 Oct 24, 2007
Jkt 214001
kaolin (China clay) or other inorganic
substances, with or without a binder,
and with no other coating. Coated free
sheet paper may be surface–colored,
surface–decorated, printed (except as
described below), embossed, or
perforated. The subject merchandise
includes single- and double–side-coated
free sheet paper; coated free sheet paper
in both sheet or roll form; and is
inclusive of all weights, brightness
levels, and finishes. The terms ‘‘wood
free’’ or ‘‘art’’ paper may also be used to
describe the imported product.
Excluded from the scope are: (1)
Coated free sheet paper that is imported
printed with final content printed text
or graphics; (2) base paper to be
sensitized for use in photography; and,
(3) paper containing by weight 25
percent or more cotton fiber.
Coated free sheet paper is classifiable
under subheadings 4810.13.1900,
4810.13.2010, 4810.13.2090,
4810.13.5000, 4810.13.7040,
4810.14.1900, 4810.14.2010,
4810.14.2090, 4810.14.5000,
4810.14.7040, 4810.19.1900,
4810.19.2010, and 4810.19.2090 of the
Harmonized Tariff Schedule of the
United States (HTSUS). While HTSUS
subheadings are provided for
convenience and customs purposes, our
written description of the scope of this
investigation is dispositive.
Scope Comments
On January 12, 2007, the respondent
companies filed a request to exclude
cast–coated free sheet paper from the
scope of the investigations of CFS from
Indonesia, Korea, and the People’s
Republic of China. The petitioner
submitted comments on the respondent
companies’ request on January 19, 2007.
The Department analyzed both parties’
comments and denied the respondent
companies’ request to exclude cast–
coated free sheet paper from the scope
of these investigations. See the
Memorandum to Stephen J. Claeys,
Deputy Assistant Secretary for Import
Administration, Request to Exclude
Cast–Coated Free Sheet Paper from the
Antidumping Duty and Countervailing
Duty Investigations on Coated Free
Sheet Paper, dated March 22, 2007,
which is on file in the Central Records
Unit (CRU), Room B099 of the main
Commerce building.
On August 20, August 28, and
September 10, 2007, the petitioner
requested that the Department clarify
the scope of the antidumping and
countervailing duty investigations of
CFS paper from Indonesia, Korea and
the People’s Republic of China (PRC).
Specifically, the petitioner asked the
Department to ‘‘clarify that the scope of
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60643
the investigation includes coated free
sheet paper containing hardwood
BCTMP.’’
Because this was a general issue
pertaining to all six investigations, the
Department set up a general issues file
to handle this scope request. A hearing
on the scope request was held on
September 26, 2007. The hearing
comprised a public session, a closed
session for the antidumping
investigation from Korea, and a closed
session for the countervailing duty
investigation from the PRC. After
considering the comments submitted by
the parties to these investigations, we
have determined not to adopt the scope
clarification sought by the petitioner.
See Memorandum to Stephen J. Claeys,
Deputy Assistant Secretary for Import
Administration, entitled ‘‘Scope
Clarification Request: NewPage
Corporation’’ dated concurrently with
this notice, which is appended to
‘‘Issues and Decision Memorandum for
the Final Determination in the
Countervailing Duty Investigation of
Coated Free Sheet Paper from the
People’s Republic of China.’’
Initiation and Deferral of Upstream
Subsidy Investigation
On July 13, 2007, the petitioner filed
an upstream subsidy allegation,
claiming, in accordance with section
771A(a) of the Act, that (1) a subsidy,
other than an export subsidy, has been
paid or bestowed on an input product,
i.e., pulpwood, that is used in the
manufacture or production of
merchandise subject to a countervailing
duty proceeding, i.e., CFS paper; (2) the
subsidy bestows a competitive benefit
on the merchandise; and (3) the subsidy
has a significant effect on the cost of
manufacturing or producing the
merchandise. See 19 CFR 351.523. The
respondent companies filed rebuttal
arguments on July 23, 2007, and the
petitioner filed additional comments
and clarifications of its allegation on
August 13, 2007.
After fully considering all of these
submissions, we have determined that
the threshold requirements set forth in
the Act and the Department’s
regulations for initiation of an upstream
subsidy investigation have been met.
However, we have simultaneously
decided to defer the conduct of the
upstream subsidy investigation until the
first administrative review, if a
countervailing duty order is issued and
such a review is requested. See section
703(g)(2)(B)(i) of the Act. A complete
discussion of our decisions to both
initiate an upstream investigation and
defer the conduct of such investigation
can be found in the ‘‘Issues and
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Federal Register / Vol. 72, No. 206 / Thursday, October 25, 2007 / Notices
Decision Memorandum’’ from Stephen
J. Claeys, Deputy Assistant Secretary for
Import Administration, to David M.
Spooner, Assistant Secretary for Import
Administration, dated concurrently
with this notice (Decision
Memorandum) and hereby adopted by
this notice.
Analysis of Subsidy Programs and
Comments Received
The subsidy programs under
investigation and the issues raised by
interested parties in their case briefs and
rebuttal briefs on the Preliminary
Determination and the Post–Preliminary
Analysis, are discussed in the Decision
Memorandum. A list of the subsidy
programs and of the issues which
parties have raised is attached to this
notice as Appendix I. Parties can find a
complete discussion of all of the
subsidy programs, and issues raised in
this investigation and the corresponding
recommendations in this public
memorandum, which is on file in the
CRU. A complete version of the
Decision Memorandum is available at
https://www.trade.gov/ia under the
heading ‘‘Federal Register Notices.’’
The paper copy and the electronic
version of the Decision Memorandum
are identical in content.
Final Determination
In accordance with section
705(c)(1)(B)(i) of the Act, we have
determined a single subsidy rate for the
two cross–owned producers/exporters
of the subject merchandise. We
determine the total countervailable
subsidy rate to be:
the suspension of liquidation for
merchandise entered on or after August
7, 2007, but to continue the suspension
of liquidation of entries made on or after
April 9, 2007 and before August 7, 2007.
If the International Trade Commission
(ITC) issues a final affirmative injury
determination, we will issue a
countervailing duty order, reinstate
suspension of liquidation under section
706(a) of the Act for all entries, and
require a cash deposit of estimated
countervailing duties for such entries of
merchandise at the rates indicated
above. If the ITC determines that
material injury, or threat of material
injury, does not exist, this proceeding
will be terminated and all estimated
duties deposited or securities posted as
a result of the suspension of liquidation
will be refunded or canceled.
ITC Notification
In accordance with section 705(d) of
the Act, we will notify the ITC of our
determination. In addition, we are
making available to the ITC all non–
privileged and non–proprietary
information related to this investigation.
We will allow the ITC access to all
privileged and business proprietary
information in our files, provided the
ITC confirms it will not disclose such
information, either publicly or under an
administrative protective order (APO),
without the written consent of the
Assistant Secretary for Import
Administration.
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Return or Destruction of Proprietary
Information
In the event that the ITC issues a final
negative injury determination, this
Producer/Exporter
Rate
notice will serve as the only reminder
to parties subject to APO of their
PT. Pabrik Kertas Tjiwi
responsibility concerning the
Kimia Tbk./PT. Pindo
destruction of proprietary information
Deli Pulp and Paper
Mills ...........................
22.48% disclosed under APO in accordance
All Others ......................
22.48% with section 351.305(a)(3) of the
Department’s regulations. Failure to
In accordance with sections 703(d)
comply is a violation of the APO.
and 705(c)(5)(A) of the Act, we have set
This determination is issued and
the all- others rate as the rate for TK/PD published pursuant to sections 705(d)
because it was the only producer/
and 777(i) of the Act.
exporter under investigation.
Dated: October 17, 2007.
Suspension of Liquidation
In accordance with our affirmative
Preliminary Determination, we
instructed U.S. Customs and Border
Protection (CBP) to suspend liquidation
of all entries of CFS from Indonesia,
which were entered or withdrawn from
warehouse, for consumption on or after
April 9, 2007, the date of the
publication of our Preliminary
Determination in the Federal Register.
In accordance with section 703(d) of the
Act, we instructed CBP to discontinue
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17:26 Oct 24, 2007
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David M. Spooner,
Assistant Secretary for Import
Administration.
Appendix I: Issues and Decision
Memorandum
I. Summary
II. Background
III. Initiation and Deferral of Upstream
Subsidy Investigation
IV. Subsidies Valuation Information
A. Cross–Ownership
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B. Attribution of Subsidies Provided to
Cross–Owned Input Suppliers
C. Allocation Period
D. Loan Benchmark and Discount Rate
E. Creditworthiness
V. Application of Facts Available and
Use of an Adverse Inference
VI. Analysis of Programs
A. Programs Determined to Be
Countervailable
1. GOI Provision of Standing Timber
for Less Than Adequate
Remuneration
2. GOI’s Log Export Ban
3. Subsidized Funding for
Reforestation (Hutan Tanaman
Industria or HTI Program): ‘‘Zero
Interest’’ Rate Loans
4. Debt Forgiveness Through the
GOI’s Acceptance of Instruments
that Had No Market Value
5. Debt Forgiveness through SMG/
APP’s the Buyback of Its Own Debt
from the GOI
B. Program Determined to Be Not
Countervailable
Subsidized Funding for Reforestation
(Hutan Tanaman Industria or HTI
Program): Government Capital
Infusions into Joint Venture Forest
Plantation
C. Program Determined To Be Not Used
Subsidized Funding for Reforestation
(Hutan Tanaman Industria or HTI
Program): Commercial Rate Loans
VII. Analysis of Comments
Comment 1: Whether the Department
Should Find that SMG/APP Received
Upstream Subsidies on Purchases of
Timber from Non–Cross Owned Entities
and Consider the Legality Under which
This Timber was Harvested
Comment 2: Whether the Department’s
Cross–Ownership Regulations Provide
for the Attribution of Upstream
Subsidies to Cross–Owned Companies
Comment 3: Cross–Ownership of AA
and WKS with IK, Lontar, TK and PD
Comment 4: Widjaja Family Interest In
Purinusa and Cross–Ownership
Comment 5: Cross–Ownership Between
AA and WKS
Comment 6: Cross–Ownership Between
WKS and Purinusa
Comment 7: Cross–Ownership Between
AA and Purinusa
Comment 8: Cross–Ownership of
Certain Additional Companies That
Were Preliminarily Found to be Cross–
Owned with Companies in the APP/
SMG CFS Group
Comment 9: Whether the Provision of
Standing Acacia is the Provision of a
Good by the GOI to the SMG/APP
Forestry Companies
Comment 10: Specificity of the GOI’s
Provision of Standing Timber for Less
Than Adequate Remuneration
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Comment 11: Use of Malaysian Export
Statistics as the Starting Point for
Deriving Stumpage Benchmarks
Comment 12: The Stumpage Rate
Calculation Provided by Respondents in
their Expert’s Report
Comment 13: Calculation of Species–
Specific Benchmarks
Comment 14: Whether to Adjust the
Benchmark for Movement Expenses
Comment 15: Whether to Use Monthly
Exchange Rates
Comment 16: Whether to Adjust the
Benchmark for Export Royalty Fees and
G&A Expenses
Comment 17: Profit Adjustment to the
Benchmark
Comment 18: Use of Actual Versus
Accrued Stumpage Payments
Comment 19: Use of the FAO’s
Conversion Factors
Comment 20: Whether to Adjust WKS’
Log Harvest
Comment 21: Adjustments to the Sales
Denominator
Comment 22: Treatment of Alleged
Illegal Logging in Indonesia
Comment 23: Indications of Illegal
Logging Practices in Subsidizing
Indonesia’s CFS Paper Industry
Comment 24: Examination of Log
Purchases from Non–Cross Owned
Entities Under the Log Export Ban
Comment 25: The Legality of the WTO’s
Findings on Export Restraints
Comment 26: Whether Respondent
Companies Cured Any Deficiency with
Respect to Settling Debt with COEs
Comment 27: Specificity of IBRA’s
Acceptance of BII Shares and COEs for
the Repayment of SMG/APP Debt
Comment 28: The Effect of IBRA’s
Outright Debt Forgiveness on the
Specificity of the Acceptance of COEs
for SMG/APP Debt
Comment 29: Benefit from IBRA’s
Acceptance of COEs as Settlement of
Debt
Comment 30: Whether an Adverse
Inference Can be Applied in
Determining that Orleans was Affiliated
with SMG/APP
Comment 31: Specificity of IBRA’s Sale
of SMG/APP Debt to an Affiliate of the
Original Debtor
Comment 32: Whether the Information
the Department Relied Upon Was
Speculative and Circumstantial
Comment 33: Procedural Abnormalities
in IBRA’s Sale of the SMG/APP Debt
and Specificity
Comment 34: Effect of the Lack of
Reduction in Debt on the
Countervailability of the Sale of SMG/
APP’s Debt to Orleans
Comment 35: The Appropriateness of
the Department’s Reliance on Facts
Available with an Adverse Inference
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Comment 36: Whether A Government
Can Provide a Financial Contribution
When the Act is Illegal
VIII. Recommendation
[FR Doc. E7–21040 Filed 10–24–07; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
[C–570–907]
Coated Free Sheet Paper from the
People’s Republic of China: Final
Affirmative Countervailing Duty
Determination
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(Department) has made a final
determination that countervailable
subsidies are being provided to
producers and exporters of coated free
sheet (CFS) paper from the People’s
Republic of China. For information on
the estimated countervailing duty rates,
please see the ‘‘Suspension of
Liquidation’’ section, below.
EFFECTIVE DATE: October 25, 2007.
FOR FURTHER INFORMATION CONTACT:
David Layton or David Neubacher, AD/
CVD Operations, Office 1, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW, Washington, DC 20230;
telephone: (202) 482–0371 or (202) 482–
5823, respectively.
SUPPLEMENTARY INFORMATION:
AGENCY:
Petitioner
The petitioner in this investigation is
the NewPage Corporation (petitioner).
Period of Investigation
The period for which we are
measuring subsidies, or period of
investigation, is January 1, 2005,
through December 31, 2005.
Case History
The following events have occurred
since the announcement of the
preliminary determination on March 30,
2007, and subsequent publication in the
Federal Register on April 9, 2007. See
Coated Free Sheet Paper from the
People’s Republic of China: Amended
Affirmative Preliminary Countervailing
Duty Determination, 72 FR 17484 (April
9, 2007) (Preliminary Determination).
On April 9, 2007, Gold East Paper
(Jiangsu) Co., Ltd. (GE) and the
petitioner submitted ministerial error
allegations relating to the Preliminary
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60645
Determination. We addressed these
ministerial error allegations in a May 11,
2007, memorandum to Stephen J.
Claeys, Deputy Assistant Secretary for
Import Administration, entitled
Ministerial Error Allegations, which is
on file in the Central Records Unit
(CRU), Room B–099 of the main
Department building.
On April 12, 2007, the Department
requested that GE amend the bracketing
and resubmit its March 9, 2007,
supplemental questionnaire response,
which GE did on April 17, 2007.
We issued a supplemental
questionnaire to the Government of the
People’s Republic of China (GOC) on
April 23, 2007, and to GE and Shandong
Chenming Paper Holdings Ltd.
(Shandong Chenming) on April 20,
2007. We received the GOC’s
supplemental questionnaire response on
May 13, 2007, Shandong Chenming’s
supplemental questionnaire response on
May 18, 2007, and GE’s supplemental
response on May 25, 2007. On May 25,
2007, we issued a supplemental
questionnaire to Shandong Chenming,
but did not receive a response. The
GOC, GE, the petitioner, and interested
parties also submitted factual
information, comments, and arguments
at numerous instances prior to the final
determination based on various
deadlines for submissions of factual
information and/or arguments
established by the Department
subsequent to the Preliminary
Determination.
On May 2, 2007, the Department
published notification of alignment of
the final determinations in the
antidumping and countervailing duty
investigations of CFS paper from the
People’s Republic of China (PRC). See
Coated Free Sheet Paper from
Indonesia, the People’s Republic of
China, and the Republic of Korea:
Alignment of Final Countervailing Duty
Determinations with Final Antidumping
Duty Determinations, 72 FR 24277 (May
2, 2007). The Department subsequently
postponed the final determinations for
the antidumping and countervailing
investigations of CFS paper from the
PRC. See Preliminary Determination of
Sales at Less Than Fair Value and
Postponement of Final Determination:
Coated Free Sheet Paper from the
People’s Republic of China, 72 FR 30758
(June 4, 2007).
On June 13, 2007, we received a letter
from Shandong Chenming withdrawing
its participation in the investigation and
requesting that all of its business
proprietary information be removed
from the record and destroyed. On June
27, 2007, the Department notified
Shandong Chenming that it had
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]]>Agencies
[Federal Register Volume 72, Number 206 (Thursday, October 25, 2007)]
[Notices]
[Pages 60642-60645]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-21040]
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DEPARTMENT OF COMMERCE
International Trade Administration
C-560-821
Coated Free Sheet Paper from Indonesia: Final Affirmative
Countervailing Duty Determination
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) has reached a
final determination that countervailable subsidies are being provided
to producers and exporters of coated free sheet paper (CFS) from
Indonesia. For information on the countervailable subsidy rates, please
see the ``Final Determination'' section of this notice.
EFFECTIVE DATE: October 25, 2007.
FOR FURTHER INFORMATION CONTACT: Sean Carey, Nicholas Czajkowski, or
Gene Calvert, AD/CVD Operations, Office 6, Import Administration,
International Trade Administration, U.S. Department of Commerce, Room
7866, 14th Street and Constitution Avenue, NW, Washington, DC 20230;
telephone: (202) 482-3964, (202) 482-1395, or (202) 482-3586,
respectively.
SUPPLEMENTARY INFORMATION:
Case History
On April 9, 2007, the Department published Coated Free Sheet Paper
from Indonesia: Notice of Preliminary Affirmative Countervailing Duty
Determination, 72 FR 17498 (April 9, 2007) (Preliminary Determination).
Since the issuance of the Preliminary Determination, the following
events have occurred. On April 10 and May 18, 2007, the Department
issued supplemental questionnaires to the Government of Indonesia (GOI)
and to PT. Pabrik Kertas Tjiwi Kimia Tbk. (TK) and Pindo Deli Pulp and
Paper Mills (PD) (the respondent companies). On April 20 and May 24,
2007, the Department issued initial and supplemental questionnaires to
the GOI and to the respondent companies regarding the petitioner's
December 15, 2007 additional allegations concerning debt forgiveness.
Both parties submitted timely responses to all of the Department's
questionnaires and supplemental questionnaires.
On May 2, 2007, the Department aligned the final determination in
this countervailing duty investigation with the final determination in
the companion antidumping duty investigation. See Coated Free Sheet
Paper from Indonesia, the People's Republic of China, and the Republic
of Korea: Alignment of Final Countervailing Duty Determinations with
Final Antidumping Duty Determinations, 72 FR 24277 (May 2, 2007). On
May 10, 2007, NewPage Corporation (the petitioner) requested a hearing
pursuant to 19 CFR 351.310(c) and the Department's Preliminary
Determination.
On June 18 and June 19, 2007, the petitioner and the respondent
companies submitted new factual information concerning the Department's
investigation of the ``GOI Provision of Standing Timber for Less than
Adequate Remuneration,'' or ``stumpage.'' On June 28, 2007, the
petitioner submitted rebuttal comments regarding the respondent
companies' new factual information submission.
From June 25 through July 13, 2007, the Department conducted
verification of the questionnaire responses provided by the GOI and the
respondent companies. On July 13, 2007, the petitioner filed an
upstream subsidy allegation, claiming, in accordance with section
771A(a) of the Tariff Act of 1930, as amended, (the Act), that (1) a
subsidy, other than an export subsidy, has been paid or bestowed on an
input product that is used in the manufacture or production of
merchandise subject to a countervailing duty proceeding; (2) the
subsidy bestows a competitive benefit on the merchandise; and (3) the
subsidy has a significant effect on the cost of manufacturing or
producing the merchandise. On July 23, 2007, the respondent companies
filed rebuttal comments, and on August 10, 2007, the petitioner filed
surrebuttal comments on this allegation.
The Department issued verification reports on August 24, 2007: see
Memoranda to the File, Countervailing Duty Investigation of Coated Free
Sheet (CFS) Paper from Indonesia: Verification of the Questionnaire
Responses Submitted by Ministry of Forestry and the Ministry of
Finance; Countervailing Duty Investigation of Coated Free Sheet Paper
from Indonesia: Verification of Cross-Ownership and Debt Restructuring
for the Asia Pulp and Paper/Sinar Mas Group; Countervailing Duty
Investigation of Coated Free Sheet Paper from Indonesia: Verification
of PT Pindo Deli Pulp & Paper Mills and PT. Pabrik Kertas Tjiwi Kimia
(Paper Producers/Exports) and PT Cakrawala Mega Indah (trading
company); Countervailing Duty Investigation of Coated Free Sheet (CFS)
Paper from Indonesia: Verification of the Questionnaire Responses
Submitted by Pulp Producers PT. Lontar Papyrus Pulp and Paper and Indah
Kiat Pulp and Paper Tbk.; and, Countervailing Duty Investigation of
Coated Free Sheet (CFS) Paper from Indonesia: Verification of the
Questionnaire Responses Submitted by Forestry Companies PT. Arara
Abadi, PT. Wirakarya Sakti, PT. Finnantara Intiga, and PT. Riau Abadi
Lestari.
On September 5 and September 6, 2007, the petitioner, the GOI, the
respondent companies, and the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers
International Union, AFL-CIO, CLC
[[Page 60643]]
(USW), a domestic interested party to this proceeding, timely filed
case briefs regarding our Preliminary Determination. On September 11,
2007, the petitioner, the GOI, the respondent companies, and the USW
each filed rebuttal comments regarding our Preliminary Determination.
At the Department's request, the petitioner, the GOI, and the
respondent companies removed what the Department determined to be new
factual information from their comments and rebuttal comments regarding
the Department's Preliminary Determination, and resubmitted those
comments to the Department on September 18 and September 19, 2007.
On September 7, 2007, the Department issued the interim analysis of
two additional subsidy allegations. We explained in the Preliminary
Determination that because we had only recently initiated
investigations of these two programs, there was not sufficient time to
gather information and analyze the countervailability of the programs
for the purposes of the Preliminary Determination. See the Memorandum
to David M. Spooner, Assistant Secretary for Import Administration from
Barbara E. Tillman, Director, Office 6, AD/CVD Operations,
Countervailing Duty Investigation: Coated Free Sheet Paper from
Indonesia; Post-Preliminary Analysis of Two New Subsidy Allegations
(Post-Preliminary Analysis). The Department set a separate briefing
schedule for parties to file comments and rebuttal comments on our
Post-Preliminary Analysis. On September 18, 2007, such comments were
filed by the GOI and the respondent companies. The petitioner filed
rebuttal comments regarding the Department's Post-Preliminary Analysis
on September 25, 2007. The petitioner withdrew its request for a
hearing on September 10, 2007.
Period of Investigation
The period of investigation (POI) for which we are measuring
subsidies is
January 1, 2005 through December 31, 2005, which corresponds to the
most recently completed fiscal year for the respondent companies. See
19 CFR 351.204(b)(2).
Scope of the Investigation
The merchandise covered by this investigation includes coated free
sheet paper and paperboard of a kind used for writing, printing or
other graphic purposes. Coated free sheet paper is produced from not-
more-than 10 percent by weight mechanical or combined chemical/
mechanical fibers. Coated free sheet paper is coated with kaolin (China
clay) or other inorganic substances, with or without a binder, and with
no other coating. Coated free sheet paper may be surface-colored,
surface-decorated, printed (except as described below), embossed, or
perforated. The subject merchandise includes single- and double-side-
coated free sheet paper; coated free sheet paper in both sheet or roll
form; and is inclusive of all weights, brightness levels, and finishes.
The terms ``wood free'' or ``art'' paper may also be used to describe
the imported product.
Excluded from the scope are: (1) Coated free sheet paper that is
imported printed with final content printed text or graphics; (2) base
paper to be sensitized for use in photography; and, (3) paper
containing by weight 25 percent or more cotton fiber.
Coated free sheet paper is classifiable under subheadings
4810.13.1900, 4810.13.2010, 4810.13.2090, 4810.13.5000, 4810.13.7040,
4810.14.1900, 4810.14.2010, 4810.14.2090, 4810.14.5000, 4810.14.7040,
4810.19.1900, 4810.19.2010, and 4810.19.2090 of the Harmonized Tariff
Schedule of the United States (HTSUS). While HTSUS subheadings are
provided for convenience and customs purposes, our written description
of the scope of this investigation is dispositive.
Scope Comments
On January 12, 2007, the respondent companies filed a request to
exclude cast-coated free sheet paper from the scope of the
investigations of CFS from Indonesia, Korea, and the People's Republic
of China. The petitioner submitted comments on the respondent
companies' request on January 19, 2007. The Department analyzed both
parties' comments and denied the respondent companies' request to
exclude cast-coated free sheet paper from the scope of these
investigations. See the Memorandum to Stephen J. Claeys, Deputy
Assistant Secretary for Import Administration, Request to Exclude Cast-
Coated Free Sheet Paper from the Antidumping Duty and Countervailing
Duty Investigations on Coated Free Sheet Paper, dated March 22, 2007,
which is on file in the Central Records Unit (CRU), Room B099 of the
main Commerce building.
On August 20, August 28, and September 10, 2007, the petitioner
requested that the Department clarify the scope of the antidumping and
countervailing duty investigations of CFS paper from Indonesia, Korea
and the People's Republic of China (PRC). Specifically, the petitioner
asked the Department to ``clarify that the scope of the investigation
includes coated free sheet paper containing hardwood BCTMP.''
Because this was a general issue pertaining to all six
investigations, the Department set up a general issues file to handle
this scope request. A hearing on the scope request was held on
September 26, 2007. The hearing comprised a public session, a closed
session for the antidumping investigation from Korea, and a closed
session for the countervailing duty investigation from the PRC. After
considering the comments submitted by the parties to these
investigations, we have determined not to adopt the scope clarification
sought by the petitioner. See Memorandum to Stephen J. Claeys, Deputy
Assistant Secretary for Import Administration, entitled ``Scope
Clarification Request: NewPage Corporation'' dated concurrently with
this notice, which is appended to ``Issues and Decision Memorandum for
the Final Determination in the Countervailing Duty Investigation of
Coated Free Sheet Paper from the People's Republic of China.''
Initiation and Deferral of Upstream Subsidy Investigation
On July 13, 2007, the petitioner filed an upstream subsidy
allegation, claiming, in accordance with section 771A(a) of the Act,
that (1) a subsidy, other than an export subsidy, has been paid or
bestowed on an input product, i.e., pulpwood, that is used in the
manufacture or production of merchandise subject to a countervailing
duty proceeding, i.e., CFS paper; (2) the subsidy bestows a competitive
benefit on the merchandise; and (3) the subsidy has a significant
effect on the cost of manufacturing or producing the merchandise. See
19 CFR 351.523. The respondent companies filed rebuttal arguments on
July 23, 2007, and the petitioner filed additional comments and
clarifications of its allegation on August 13, 2007.
After fully considering all of these submissions, we have
determined that the threshold requirements set forth in the Act and the
Department's regulations for initiation of an upstream subsidy
investigation have been met. However, we have simultaneously decided to
defer the conduct of the upstream subsidy investigation until the first
administrative review, if a countervailing duty order is issued and
such a review is requested. See section 703(g)(2)(B)(i) of the Act. A
complete discussion of our decisions to both initiate an upstream
investigation and defer the conduct of such investigation can be found
in the ``Issues and
[[Page 60644]]
Decision Memorandum'' from Stephen J. Claeys, Deputy Assistant
Secretary for Import Administration, to David M. Spooner, Assistant
Secretary for Import Administration, dated concurrently with this
notice (Decision Memorandum) and hereby adopted by this notice.
Analysis of Subsidy Programs and Comments Received
The subsidy programs under investigation and the issues raised by
interested parties in their case briefs and rebuttal briefs on the
Preliminary Determination and the Post-Preliminary Analysis, are
discussed in the Decision Memorandum. A list of the subsidy programs
and of the issues which parties have raised is attached to this notice
as Appendix I. Parties can find a complete discussion of all of the
subsidy programs, and issues raised in this investigation and the
corresponding recommendations in this public memorandum, which is on
file in the CRU. A complete version of the Decision Memorandum is
available at https://www.trade.gov/ia under the heading ``Federal
Register Notices.'' The paper copy and the electronic version of the
Decision Memorandum are identical in content.
Final Determination
In accordance with section 705(c)(1)(B)(i) of the Act, we have
determined a single subsidy rate for the two cross-owned producers/
exporters of the subject merchandise. We determine the total
countervailable subsidy rate to be:
------------------------------------------------------------------------
Producer/Exporter Rate
------------------------------------------------------------------------
PT. Pabrik Kertas Tjiwi Kimia Tbk./PT. Pindo Deli 22.48%
Pulp and Paper Mills...............................
All Others.......................................... 22.48%
------------------------------------------------------------------------
In accordance with sections 703(d) and 705(c)(5)(A) of the Act, we
have set the all- others rate as the rate for TK/PD because it was the
only producer/exporter under investigation.
Suspension of Liquidation
In accordance with our affirmative Preliminary Determination, we
instructed U.S. Customs and Border Protection (CBP) to suspend
liquidation of all entries of CFS from Indonesia, which were entered or
withdrawn from warehouse, for consumption on or after
April 9, 2007, the date of the publication of our Preliminary
Determination in the Federal Register. In accordance with section
703(d) of the Act, we instructed CBP to discontinue the suspension of
liquidation for merchandise entered on or after August 7, 2007, but to
continue the suspension of liquidation of entries made on or after
April 9, 2007 and before August 7, 2007.
If the International Trade Commission (ITC) issues a final
affirmative injury determination, we will issue a countervailing duty
order, reinstate suspension of liquidation under section 706(a) of the
Act for all entries, and require a cash deposit of estimated
countervailing duties for such entries of merchandise at the rates
indicated above. If the ITC determines that material injury, or threat
of material injury, does not exist, this proceeding will be terminated
and all estimated duties deposited or securities posted as a result of
the suspension of liquidation will be refunded or canceled.
ITC Notification
In accordance with section 705(d) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all non-privileged and non-proprietary information related to this
investigation. We will allow the ITC access to all privileged and
business proprietary information in our files, provided the ITC
confirms it will not disclose such information, either publicly or
under an administrative protective order (APO), without the written
consent of the Assistant Secretary for Import Administration.
Return or Destruction of Proprietary Information
In the event that the ITC issues a final negative injury
determination, this notice will serve as the only reminder to parties
subject to APO of their responsibility concerning the destruction of
proprietary information disclosed under APO in accordance with section
351.305(a)(3) of the Department's regulations. Failure to comply is a
violation of the APO.
This determination is issued and published pursuant to sections
705(d) and 777(i) of the Act.
Dated: October 17, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
Appendix I: Issues and Decision Memorandum
I. Summary
II. Background
III. Initiation and Deferral of Upstream Subsidy Investigation
IV. Subsidies Valuation Information
A. Cross-Ownership
B. Attribution of Subsidies Provided to Cross-Owned Input Suppliers
C. Allocation Period
D. Loan Benchmark and Discount Rate
E. Creditworthiness
V. Application of Facts Available and Use of an Adverse Inference
VI. Analysis of Programs
A. Programs Determined to Be Countervailable
1. GOI Provision of Standing Timber for Less Than Adequate
Remuneration
2. GOI's Log Export Ban
3. Subsidized Funding for Reforestation (Hutan Tanaman Industria or
HTI Program): ``Zero Interest'' Rate Loans
4. Debt Forgiveness Through the GOI's Acceptance of Instruments
that Had No Market Value
5. Debt Forgiveness through SMG/APP's the Buyback of Its Own Debt
from the GOI
B. Program Determined to Be Not Countervailable
Subsidized Funding for Reforestation (Hutan Tanaman Industria or
HTI Program): Government Capital Infusions into Joint Venture Forest
Plantation
C. Program Determined To Be Not Used
Subsidized Funding for Reforestation (Hutan Tanaman Industria or
HTI Program): Commercial Rate Loans
VII. Analysis of Comments
Comment 1: Whether the Department Should Find that SMG/APP Received
Upstream Subsidies on Purchases of Timber from Non-Cross Owned Entities
and Consider the Legality Under which This Timber was Harvested
Comment 2: Whether the Department's Cross-Ownership Regulations Provide
for the Attribution of Upstream Subsidies to Cross-Owned Companies
Comment 3: Cross-Ownership of AA and WKS with IK, Lontar, TK and PD
Comment 4: Widjaja Family Interest In Purinusa and Cross-Ownership
Comment 5: Cross-Ownership Between AA and WKS
Comment 6: Cross-Ownership Between WKS and Purinusa
Comment 7: Cross-Ownership Between AA and Purinusa
Comment 8: Cross-Ownership of Certain Additional Companies That Were
Preliminarily Found to be Cross-Owned with Companies in the APP/SMG CFS
Group
Comment 9: Whether the Provision of Standing Acacia is the Provision of
a Good by the GOI to the SMG/APP Forestry Companies
Comment 10: Specificity of the GOI's Provision of Standing Timber for
Less Than Adequate Remuneration
[[Page 60645]]
Comment 11: Use of Malaysian Export Statistics as the Starting Point
for Deriving Stumpage Benchmarks
Comment 12: The Stumpage Rate Calculation Provided by Respondents in
their Expert's Report
Comment 13: Calculation of Species-Specific Benchmarks
Comment 14: Whether to Adjust the Benchmark for Movement Expenses
Comment 15: Whether to Use Monthly Exchange Rates
Comment 16: Whether to Adjust the Benchmark for Export Royalty Fees and
G&A Expenses
Comment 17: Profit Adjustment to the Benchmark
Comment 18: Use of Actual Versus Accrued Stumpage Payments
Comment 19: Use of the FAO's Conversion Factors
Comment 20: Whether to Adjust WKS' Log Harvest
Comment 21: Adjustments to the Sales Denominator
Comment 22: Treatment of Alleged Illegal Logging in Indonesia
Comment 23: Indications of Illegal Logging Practices in Subsidizing
Indonesia's CFS Paper Industry
Comment 24: Examination of Log Purchases from Non-Cross Owned Entities
Under the Log Export Ban
Comment 25: The Legality of the WTO's Findings on Export Restraints
Comment 26: Whether Respondent Companies Cured Any Deficiency with
Respect to Settling Debt with COEs
Comment 27: Specificity of IBRA's Acceptance of BII Shares and COEs for
the Repayment of SMG/APP Debt
Comment 28: The Effect of IBRA's Outright Debt Forgiveness on the
Specificity of the Acceptance of COEs for SMG/APP Debt
Comment 29: Benefit from IBRA's Acceptance of COEs as Settlement of
Debt
Comment 30: Whether an Adverse Inference Can be Applied in Determining
that Orleans was Affiliated with SMG/APP
Comment 31: Specificity of IBRA's Sale of SMG/APP Debt to an Affiliate
of the Original Debtor
Comment 32: Whether the Information the Department Relied Upon Was
Speculative and Circumstantial
Comment 33: Procedural Abnormalities in IBRA's Sale of the SMG/APP Debt
and Specificity
Comment 34: Effect of the Lack of Reduction in Debt on the
Countervailability of the Sale of SMG/APP's Debt to Orleans
Comment 35: The Appropriateness of the Department's Reliance on Facts
Available with an Adverse Inference
Comment 36: Whether A Government Can Provide a Financial Contribution
When the Act is Illegal
VIII. Recommendation
[FR Doc. E7-21040 Filed 10-24-07; 8:45 am]
BILLING CODE 3510-DS-S
