Circular Welded Austenitic Stainless Pressure Pipe from the People's Republic of China: Notice of Initiation of Countervailing Duty Investigation, 9994-9997 [E8-3510]

Download as PDF 9994 Federal Register / Vol. 73, No. 37 / Monday, February 25, 2008 / Notices Dated: February 19, 2008. David M. Spooner, Assistant Secretary for Import Administration. FOR FURTHER INFORMATION CONTACT: Appendix I – Issues and Decision Memorandum I. Analysis Of Programs A. Programs Determined to Be Not Used 1. Provision of Fertilizer and Machinery 2. Provision of Credit 3. Tax Exemptions 4. Provision of Water and Irrigation Equipment 5. Technical Support 6. Duty Refunds on Imported Raw or Intermediate Materials Used in the Production of Export Goods 7. Program to Improve Quality of Exports of Dried Fruit 8. Iranian Export Guarantee Fund 9. GOI Grants and Loans to Pistachio Farmers 10. Crop Insurance for Pistachios II. Total Ad Valorem Rate III. Analysis Of Comments Comment 1: Whether Ahmadi’s Sale of Subject Merchandise Constitutes a Bona Fide Sale Comment 2: Whether the Department Should Assign an Adverse Facts Available Net Subsidy Rate to Ahmadi Because of the GOI’s Failure to Cooperate with the Department By Providing Incomplete Questionnaire Responses Comment 3: Whether the Department Should Assign an Adverse Facts Available Net Subsidy Rate to Ahmadi on the Grounds That it Failed to Respond to the Department’s Questionnaires to the Best of its Ability Comment 4: Whether the All–Others Rate Stated in the Preliminary Results Is Inaccurate and Should Be Corrected [FR Doc. E8–3511 Filed 2–22–08; 8:45 am] BILLING CODE 3510–DS–S International Trade Administration rfrederick on PROD1PC67 with NOTICES (C–570–931) Circular Welded Austenitic Stainless Pressure Pipe from the People’s Republic of China: Notice of Initiation of Countervailing Duty Investigation Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: February 25, 2008. VerDate Aug<31>2005 14:34 Feb 22, 2008 Jkt 214001 The Petition On January 30, 2008, the Department of Commerce (the ‘‘Department’’) received a petition filed in proper form by Bristol Metals, L.P., Felker Brothers Corp., Marcegaglia USA Inc., Outokumpu Stainless Pipe, Inc., and the United Steel Workers of America (the ‘‘petitioners’’), domestic producers of circular welded austenitic stainless pressure pipe (‘‘CWASPP’’ or ‘‘subject merchandise’’). In response to the Department’s request, the petitioners provided timely information supplementing the petition on February 5, February 11, and February 14, 2008. In accordance with Section 702(b)(1) of the Tariff Act of 1930, as amended (‘‘the Act’’), the petitioners allege that manufacturers, producers, or exporters of CWASPP in the People’s Republic of China (‘‘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 the petitioners filed the petition on behalf of the domestic industry because they are interested parties as defined in Section 771(9)(C) of the Act and the petitioners have demonstrated sufficient industry support with respect to the countervailing duty investigation (see ‘‘Determination of Industry Support for the Petition’’ section below). Period of Investigation The period of investigation (‘‘POI’’) is January 1, 2007, through December 31, 2007. Scope of the Investigation DEPARTMENT OF COMMERCE AGENCY: Darla Brown or Eric Greynolds, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482–2849 and (202) 482–6071, respectively. SUPPLEMENTARY INFORMATION: The merchandise covered by this investigation is circular welded austenitic stainless pressure pipe (‘‘CWASPP’’) not greater than 14 inches in outside diameter. This merchandise includes, but is not limited to, the American Society for Testing and Materials (ASTM) A–312 or ASTM A– 778 specifications, or comparable domestic or foreign specifications. ASTM A–358 products are only included when they are produced to meet ASTM A–312 or ASTM A–778 PO 00000 Frm 00011 Fmt 4703 Sfmt 4703 specifications, or comparable domestic or foreign specifications. Excluded from the scope are: (1) Welded stainless mechanical tubing, meeting ASTM A–554 or comparable domestic or foreign specifications; (2) boiler, heat exchanger, superheater, refining furnace, feedwater heater, and condenser tubing, meeting ASTM A– 249, ASTM A–688 or comparable domestic or foreign specifications; and (3) specialized tubing, meeting ASTM A–269, ASTM A–270 or comparable domestic or foreign specifications. The subject imports are normally classified in subheadings 7306.40.5005, 7306.40.5040, 7306.40.5062, 7306.40.5064, and 7306.40.5085 of the Harmonized Tariff Schedule of the United States (‘‘HTSUS’’). They may also enter under HTSUS subheadings 7306.40.1010, 7306.40.1015, 7306.40.5042, 7306.40.5044, 7306.40.5080, and 7306.40.5090. The HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope 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, we are setting aside a period for interested parties to raise issues regarding product coverage. See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997). 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 determination. Consultations Pursuant to Section 702(b)(4)(A)(ii) of the Act, the Department invited representatives of the Government of the 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 February 15, 2008. See the February 15, 2008, Memorandum to The File, entitled, E:\FR\FM\25FEN1.SGM 25FEN1 Federal Register / Vol. 73, No. 37 / Monday, February 25, 2008 / Notices rfrederick on PROD1PC67 with NOTICES ‘‘Consultations Regarding the Petition on Welded Stainless Steel Pressure Pipe from the People’s Republic of China’’ on file in the CRU of the Department of Commerce, Room 1117. Determination of Industry Support for the Petition Section 702(b)(1) of the Act requires that a petition be filed by or 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 (CIT 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, VerDate Aug<31>2005 14:34 Feb 22, 2008 Jkt 214001 most similar in characteristics and uses with, the article subject to an investigation under this title.’’ Thus, the reference point from which the domestic like product analysis begins is ‘‘the article subject to an investigation,’’ (i.e., the class or kind of merchandise to be investigated, which normally will be the scope as defined in the petition). With regard to the domestic like product, the 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 CWASPP constitutes a single domestic like product, which is defined further in the ‘‘Scope of the Investigation’’ section above, 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: Circular Welded Austenitic Stainless Pressure Pipe from the People’s Republic of China (‘‘PRC Initiation Checklist’’) at Attachment II, on file in the CRU. In determining whether the 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 PRC Initiation Checklist. To establish industry support, the petitioners provided their shipments for the domestic like product for the year 2007 and compared them to shipments of the domestic like product for the industry. In their February 13, 2008, supplement to the petition, the petitioners demonstrated the correlation between shipments and production. See February 13, 2008, Supplement to the petition. Based on the fact that total industry production data for the domestic like product for 2007 is not reasonably available, and that the petitioners have established that shipments are a reasonable proxy for production data, we have relied upon shipment data for purposes of measuring industry support. For further discussion see PRC Initiation Checklist at Attachment II (Industry Support). Our review of the data provided in the petition, supplemental submissions, and PO 00000 Frm 00012 Fmt 4703 Sfmt 4703 9995 other information readily available to the Department indicates that the petitioners have established industry support. First, the petition established support from domestic producers (or workers) accounting for more than 50 percent of the total production of the domestic like product and, as such, the Department is not required to take further action in order to evaluate industry support (e.g., polling). See Section 702(c)(4)(D) of the Act. Second, the domestic producers have met the statutory criteria for industry support under 702(c)(4)(A)(i) 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. Finally, the domestic producers have met the statutory criteria for industry support under Section 702(c)(4)(A)(ii) because the domestic producers (or workers) who support the petition account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Accordingly, the Department determines that the petition was filed on behalf of the domestic industry within the meaning of Section 702(b)(1) of the Act. See PRC Initiation Checklist at Attachment II (Industry Support). The Department finds that the petitioners filed the petition on behalf of the domestic industry because they are an interested party as defined in section 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 PRC Initiation Checklist at Attachment II (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 The petitioners allege that imports of CWASPP 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 CWASPP. In addition, the petitioners allege that subsidized imports exceed the negligibility threshold provided for E:\FR\FM\25FEN1.SGM 25FEN1 9996 Federal Register / Vol. 73, No. 37 / Monday, February 25, 2008 / Notices under Section 771(24)(A) of the Act. The petitioners contend that the industry’s injured condition is illustrated by reduced market share, lost sales, reduced production, capacity and capacity utilization rate, reduced shipments, 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 PRC 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 petitioner(s) supporting the allegations. The Department has examined the countervailing duty petition on CWASPP from the PRC and finds that it complies with the requirements of Section 702(b) of the Act. Therefore, in accordance with Section 702(b) of the Act, we are initiating a countervailing duty investigation to determine whether manufacturers, producers, or exporters of CWASPP in the PRC receive countervailable subsidies. For a discussion of evidence supporting our initiation determination, see PRC 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: rfrederick on PROD1PC67 with NOTICES Preferential Lending 1. Loans and Export Credits Pursuant to the Northeast Revitalization Program Income Tax Programs 2. ‘‘Two Free, Three Half’’ Program 3. Income Tax Reductions for Export– oriented Foreign Investment Enterprises (‘‘FIEs’’) 4. Reduced Income Tax Rate for FIEs Located in Economic and Technological Development Zones and Other Special Economic Zones 5. Income Tax Credit or Refund for Reinvestment of FIE Profits VerDate Aug<31>2005 14:34 Feb 22, 2008 Jkt 214001 6. Provincial and Local Tax Exemptions and Reductions for Productive FIEs 7. Local Income Tax Reductions in Certain Development Zones 8. Preferential Tax Policies for Research and Development at FIEs Indirect Tax Programs and Import Tariff Program 9. VAT Refunds on Purchases of Domestically–produced Equipment by FIEs 10. Tax Credits on Purchases of Domestically–produced Equipment by Domestically–owned Companies Provincial Subsidy Programs 11. Guangdong Province’s ‘‘Outward Expansion’’ Program 12. Preferential Loans Pursuant to Liaoning Province’s Five–Year Framework 13. Preferential Tax Policies for Town and Village Enterprises (‘‘TVEs’’) Provision of Goods or Services for Less than Adequate Remuneration 14. Provision of Stainless Steel Coil for Less than Adequate Remuneration 15. Provision of Land Use Rights for Less than Adequate Remuneration Government Restraints on Exports 16. Export Restraints on Flat–rolled Steel For further information explaining why the Department is investigating these programs, see the PRC 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. Guangshou High Technologic Enterprise: Petitioners allege that a producer of CWASPP located in Guangshou received subsidies by virtue of its status as a high technology enterprise, but failed to explain what those alleged subsidies were. 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 this program. 2. Exemption of Export Taxes for CWASPP: Petitioners allege that producers of CWASPP are exempt from paying certain export taxes that the Government of China (‘‘GOC’’) levies on other steel products. Consistent with the Department’s decision in the initiation of Light–walled Rectangular Pipe and PO 00000 Frm 00013 Fmt 4703 Sfmt 4703 Tube from the PRC, we find that petitioners have failed to adequately allege how CWASPP producers have been relieved of taxes they would otherwise have paid. See Notice of Initiation of Countervailing Duty Investigation: Light–walled Rectangular Pipe and Tube from the People’s Republic of China, 72 FR 40281, 40283 (July 24, 2007) (‘‘LWRP Initiation Notice’’). 3. City of Shenzhen’s Grants to Exporter to Cover Interest on Loans: Petitioners allege that the City of Shenzhen provides interest payment grants to exporters in the Shenzhen Special Economic Zone (‘‘SEZ’’). Consistent with the Department’s practice in recent initiations, we are declining to initiate on the allegation because petitioners have failed to provide information indicating that a producer of CWASPP is located in the Shenzhen SEZ. See, e.g., LWRP Initiation Notice 72 FR at 40284. 4. ‘‘Famous Brands’’ Program: Petitioners allege that the GOC designates the products of certain firms as ‘‘Famous Brands,’’ thereby making the firms eligible for grants and for enhanced trademark protection. In addition, petitioners allege that some provinces have coordinated efforts to build brands from their provinces. Petitioners have not sufficiently alleged the elements necessary for the imposition of a countervailing duty and did not support their allegation with reasonably available information. Therefore, we do not plan to investigate the ‘‘Famous Brands’’ program. 5. Reduced Income Tax Rate for Technology and Knowledge Intensive FIEs: Petitioners allege that FIEs that qualify as technology intensive or knowledge intensive and have major products listed in a catalogue issued by the Ministry of Science and Technology (‘‘MOST’’) pay a reduced income tax of 15 percent. However, there is no mention of ‘‘pipe’’ in the catalogue, a fact that petitioners acknowledge. Thus, based on record evidence, producers of subject merchandise cannot use this program. Therefore, we do not plan to investigate this program. 6. Provision of Electricity, Natural Gas, and Water for Less than Adequate Remuneration: Petitioners allege that the GOC controls electricity, natural gas, and water prices through the National Development and Reform Commission. Petitioners state that the government caps the price that power generation companies can charge. Petitioners maintain that the steel industry has benefited from preferential treatment in both the prices of these utilities as well as access to the utilities. E:\FR\FM\25FEN1.SGM 25FEN1 Federal Register / Vol. 73, No. 37 / Monday, February 25, 2008 / Notices rfrederick on PROD1PC67 with NOTICES Petitioners have not sufficiently alleged the elements necessary for the imposition of a countervailing duty and did not support their allegation with reasonably available information. Therefore, we are not investigating the provision of electricity, natural gas, and water for less than adequate remuneration. 7. The State Key Technologies Renovation Project Fund: Petitioners allege that the purpose of this subsidy program is to promote technological renovations and improvements in key industries through the grant of funds equal to two or three years of interest expense payments for the projects depending upon the region of the country in which the project occurs, not to exceed 15 percent of the total cost of the project. Petitioners have not sufficiently alleged the elements necessary for the imposition of a countervailing duty and did not support their allegation with reasonably available information. Therefore, we do not plan to investigate ‘‘The State Key Technologies Renovation Project Fund’’ program. Because petitioner has not sufficiently alleged countervailable subsidies for these programs, we are not initiating on them at this time. Application of the Countervailing Duty Law to the PRC 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, e.g., Tapered Roller Bearings and Parts Thereof, Finished and 10 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 final affirmative countervailing duty determination on coated free sheet paper from the PRC, the Department determined that the current nature of the PRC economy does not create obstacles to applying the necessary criteria in the CVD law. See Coated Free Sheet Paper from the People’s Republic of China: Final Affirmative Countervailing Duty Determination, 72 FR 60645 (October 25, 2007) and the accompanying Issues and Decision VerDate Aug<31>2005 14:34 Feb 22, 2008 Jkt 214001 Memorandum at Comment 1. Therefore, because the petitioners have provided sufficient allegations and support of their allegations to meet the statutory criteria for initiating a CVD investigation of CWASPP from the PRC, initiation of a CVD investigation is warranted in this case. Respondent Selection For this investigation, the Department expects to select respondents based on U.S. Customs and Border Protection (‘‘CBP’’) data for U.S. imports during the POI. We intend to make our decision regarding respondent selection within 20 days of publication of this Federal Register notice. The Department invites comments regarding the CBP data and respondent selection within seven calendar days of publication of this Federal Register notice. Distribution of Copies of the Petition In accordance with Section 702(b)(4)(A)(i) of the Act, 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 CWASPP 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: February 19, 2008. David M. Spooner, Assistant Secretary for Import Administration. [FR Doc. E8–3510 Filed 2–22–08; 8:45 am] BILLING CODE 3510–DS–S PO 00000 Frm 00014 Fmt 4703 Sfmt 4703 9997 DEPARTMENT OF COMMERCE International Trade Administration [A–428–840, A–570–920] Lightweight Thermal Paper From Germany and the People’s Republic of China: Postponement of Preliminary Determinations of Antidumping Duty Investigations Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: February 25, 2008. FOR FURTHER INFORMATION CONTACT: Cindy Robinson or George McMahon (Germany), or Frances Veith (the People’s Republic of China), AD/CVD Operations, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230, telephone: (202) 482–3797, (202) 482–1167, (202) 482– 4295, respectively. SUPPLEMENTARY INFORMATION: AGENCY: Postponement of Preliminary Determinations On October 29, 2007, the Department of Commerce (the Department) initiated the antidumping duty investigations of lightweight thermal paper from Germany, the Republic of Korea, and the People’s Republic of China (PRC). See Notice of Initiation of Antidumping Duty Investigations: Lightweight Thermal Paper from Germany, the Republic of Korea, and the People’s Republic of China, 72 FR 62430 (November 5, 2007). The notice of initiation stated that the Department would issue its preliminary determinations for these investigations no later than 140 days after the date of issuance of the initiation, in accordance with section 733(b)(1)(A) of the Tariff Act of 1930, as amended (the Act). On December 5, 2007, the International Trade Commission (ITC) determined that imports of lightweight thermal paper from the Republic of Korea were negligible, and therefore, terminated the investigation with regard to the Republic of Korea. See Certain Lightweight Thermal Paper From China, Germany, and Korea, 72 FR 70343 (December 11, 2007). On February 6, 2008, the petitioner, Appleton Papers Inc. (Appleton), made a timely request pursuant to section 733(c)(1)(A) of the Act and 19 CFR 351.205(b)(2) and (e) for a 50-day postponement of the preliminary determinations. The petitioner requested postponement of the preliminary determinations for Germany and the PRC in order to allow E:\FR\FM\25FEN1.SGM 25FEN1

Agencies

[Federal Register Volume 73, Number 37 (Monday, February 25, 2008)]
[Notices]
[Pages 9994-9997]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-3510]


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DEPARTMENT OF COMMERCE

International Trade Administration

(C-570-931)


Circular Welded Austenitic Stainless Pressure Pipe from the 
People's Republic of China: Notice of Initiation of Countervailing Duty 
Investigation

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: February 25, 2008.

FOR FURTHER INFORMATION CONTACT: Darla Brown or Eric Greynolds, AD/CVD 
Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-2849 
and (202) 482-6071, respectively.

SUPPLEMENTARY INFORMATION:

The Petition

    On January 30, 2008, the Department of Commerce (the 
``Department'') received a petition filed in proper form by Bristol 
Metals, L.P., Felker Brothers Corp., Marcegaglia USA Inc., Outokumpu 
Stainless Pipe, Inc., and the United Steel Workers of America (the 
``petitioners''), domestic producers of circular welded austenitic 
stainless pressure pipe (``CWASPP'' or ``subject merchandise''). In 
response to the Department's request, the petitioners provided timely 
information supplementing the petition on February 5, February 11, and 
February 14, 2008.
    In accordance with Section 702(b)(1) of the Tariff Act of 1930, as 
amended (``the Act''), the petitioners allege that manufacturers, 
producers, or exporters of CWASPP in the People's Republic of China 
(``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 the petitioners filed the petition on 
behalf of the domestic industry because they are interested parties as 
defined in Section 771(9)(C) of the Act and the petitioners have 
demonstrated sufficient industry support with respect to the 
countervailing duty investigation (see ``Determination of Industry 
Support for the Petition'' section below).

Period of Investigation

    The period of investigation (``POI'') is January 1, 2007, through 
December 31, 2007.

Scope of the Investigation

    The merchandise covered by this investigation is circular welded 
austenitic stainless pressure pipe (``CWASPP'') not greater than 14 
inches in outside diameter. This merchandise includes, but is not 
limited to, the American Society for Testing and Materials (ASTM) A-312 
or ASTM A-778 specifications, or comparable domestic or foreign 
specifications. ASTM A-358 products are only included when they are 
produced to meet ASTM A-312 or ASTM A-778 specifications, or comparable 
domestic or foreign specifications.
    Excluded from the scope are: (1) Welded stainless mechanical 
tubing, meeting ASTM A-554 or comparable domestic or foreign 
specifications; (2) boiler, heat exchanger, superheater, refining 
furnace, feedwater heater, and condenser tubing, meeting ASTM A-249, 
ASTM A-688 or comparable domestic or foreign specifications; and (3) 
specialized tubing, meeting ASTM A-269, ASTM A-270 or comparable 
domestic or foreign specifications.
    The subject imports are normally classified in subheadings 
7306.40.5005, 7306.40.5040, 7306.40.5062, 7306.40.5064, and 
7306.40.5085 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). They may also enter under HTSUS subheadings 7306.40.1010, 
7306.40.1015, 7306.40.5042, 7306.40.5044, 7306.40.5080, and 
7306.40.5090. The HTSUS subheadings are provided for convenience and 
customs purposes only; the written description of the scope 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, we are setting aside a 
period for interested parties to raise issues regarding product 
coverage. See Antidumping Duties; Countervailing Duties; Final Rule, 62 
FR 27296, 27323 (May 19, 1997). 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 
determination.

Consultations

    Pursuant to Section 702(b)(4)(A)(ii) of the Act, the Department 
invited representatives of the Government of the 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 February 15, 2008. See the February 15, 2008, 
Memorandum to The File, entitled,

[[Page 9995]]

``Consultations Regarding the Petition on Welded Stainless Steel 
Pressure Pipe from the People's Republic of China'' on file in the CRU 
of the Department of Commerce, Room 1117.

Determination of Industry Support for the Petition

    Section 702(b)(1) of the Act requires that a petition be filed by 
or 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 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 
1989), cert. denied 492 U.S. 919 (1989).
    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition).
    With regard to the domestic like product, the 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 CWASPP constitutes a single 
domestic like product, which is defined further in the ``Scope of the 
Investigation'' section above, 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: Circular Welded Austenitic 
Stainless Pressure Pipe from the People's Republic of China (``PRC 
Initiation Checklist'') at Attachment II, on file in the CRU.
    In determining whether the 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 PRC Initiation Checklist. To establish industry 
support, the petitioners provided their shipments for the domestic like 
product for the year 2007 and compared them to shipments of the 
domestic like product for the industry. In their February 13, 2008, 
supplement to the petition, the petitioners demonstrated the 
correlation between shipments and production. See February 13, 2008, 
Supplement to the petition. Based on the fact that total industry 
production data for the domestic like product for 2007 is not 
reasonably available, and that the petitioners have established that 
shipments are a reasonable proxy for production data, we have relied 
upon shipment data for purposes of measuring industry support. For 
further discussion see PRC Initiation Checklist at Attachment II 
(Industry Support).
    Our review of the data provided in the petition, supplemental 
submissions, and other information readily available to the Department 
indicates that the petitioners have established industry support. 
First, the petition established support from domestic producers (or 
workers) accounting for more than 50 percent of the total production of 
the domestic like product and, as such, the Department is not required 
to take further action in order to evaluate industry support (e.g., 
polling). See Section 702(c)(4)(D) of the Act. Second, the domestic 
producers have met the statutory criteria for industry support under 
702(c)(4)(A)(i) 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. Finally, the domestic producers have met the 
statutory criteria for industry support under Section 702(c)(4)(A)(ii) 
because the domestic producers (or workers) who support the petition 
account for more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support 
for, or opposition to, the petition. Accordingly, the Department 
determines that the petition was filed on behalf of the domestic 
industry within the meaning of Section 702(b)(1) of the Act. See PRC 
Initiation Checklist at Attachment II (Industry Support).
    The Department finds that the petitioners filed the petition on 
behalf of the domestic industry because they are an interested party as 
defined in section 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 PRC Initiation Checklist at Attachment II 
(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

    The petitioners allege that imports of CWASPP 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 CWASPP. In addition, the petitioners allege that 
subsidized imports exceed the negligibility threshold provided for

[[Page 9996]]

under Section 771(24)(A) of the Act. The petitioners contend that the 
industry's injured condition is illustrated by reduced market share, 
lost sales, reduced production, capacity and capacity utilization rate, 
reduced shipments, 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 PRC 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 
petitioner(s) supporting the allegations. The Department has examined 
the countervailing duty petition on CWASPP from the PRC and finds that 
it complies with the requirements of Section 702(b) of the Act. 
Therefore, in accordance with Section 702(b) of the Act, we are 
initiating a countervailing duty investigation to determine whether 
manufacturers, producers, or exporters of CWASPP in the PRC receive 
countervailable subsidies. For a discussion of evidence supporting our 
initiation determination, see PRC 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. Loans and Export Credits Pursuant to the Northeast 
Revitalization Program

Income Tax Programs

    2. ``Two Free, Three Half'' Program
    3. Income Tax Reductions for Export-oriented Foreign Investment 
Enterprises (``FIEs'')
    4. Reduced Income Tax Rate for FIEs Located in Economic and 
Technological Development Zones and Other Special Economic Zones
    5. Income Tax Credit or Refund for Reinvestment of FIE Profits
    6. Provincial and Local Tax Exemptions and Reductions for 
Productive FIEs
    7. Local Income Tax Reductions in Certain Development Zones
    8. Preferential Tax Policies for Research and Development at FIEs

Indirect Tax Programs and Import Tariff Program

    9. VAT Refunds on Purchases of Domestically-produced Equipment by 
FIEs
    10. Tax Credits on Purchases of Domestically-produced Equipment by 
Domestically-owned Companies

Provincial Subsidy Programs

    11. Guangdong Province's ``Outward Expansion'' Program
    12. Preferential Loans Pursuant to Liaoning Province's Five-Year 
Framework
    13. Preferential Tax Policies for Town and Village Enterprises 
(``TVEs'')

Provision of Goods or Services for Less than Adequate Remuneration

    14. Provision of Stainless Steel Coil for Less than Adequate 
Remuneration
    15. Provision of Land Use Rights for Less than Adequate 
Remuneration

Government Restraints on Exports

    16. Export Restraints on Flat-rolled Steel
    For further information explaining why the Department is 
investigating these programs, see the PRC 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. Guangshou High Technologic Enterprise: Petitioners allege that a 
producer of CWASPP located in Guangshou received subsidies by virtue of 
its status as a high technology enterprise, but failed to explain what 
those alleged subsidies were. 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 this program.
    2. Exemption of Export Taxes for CWASPP: Petitioners allege that 
producers of CWASPP are exempt from paying certain export taxes that 
the Government of China (``GOC'') levies on other steel products. 
Consistent with the Department's decision in the initiation of Light-
walled Rectangular Pipe and Tube from the PRC, we find that petitioners 
have failed to adequately allege how CWASPP producers have been 
relieved of taxes they would otherwise have paid. See Notice of 
Initiation of Countervailing Duty Investigation: Light-walled 
Rectangular Pipe and Tube from the People's Republic of China, 72 FR 
40281, 40283 (July 24, 2007) (``LWRP Initiation Notice'').
    3. City of Shenzhen's Grants to Exporter to Cover Interest on 
Loans: Petitioners allege that the City of Shenzhen provides interest 
payment grants to exporters in the Shenzhen Special Economic Zone 
(``SEZ''). Consistent with the Department's practice in recent 
initiations, we are declining to initiate on the allegation because 
petitioners have failed to provide information indicating that a 
producer of CWASPP is located in the Shenzhen SEZ. See, e.g., LWRP 
Initiation Notice 72 FR at 40284.
    4. ``Famous Brands'' Program: Petitioners allege that the GOC 
designates the products of certain firms as ``Famous Brands,'' thereby 
making the firms eligible for grants and for enhanced trademark 
protection. In addition, petitioners allege that some provinces have 
coordinated efforts to build brands from their provinces. Petitioners 
have not sufficiently alleged the elements necessary for the imposition 
of a countervailing duty and did not support their allegation with 
reasonably available information. Therefore, we do not plan to 
investigate the ``Famous Brands'' program.
    5. Reduced Income Tax Rate for Technology and Knowledge Intensive 
FIEs: Petitioners allege that FIEs that qualify as technology intensive 
or knowledge intensive and have major products listed in a catalogue 
issued by the Ministry of Science and Technology (``MOST'') pay a 
reduced income tax of 15 percent. However, there is no mention of 
``pipe'' in the catalogue, a fact that petitioners acknowledge. Thus, 
based on record evidence, producers of subject merchandise cannot use 
this program. Therefore, we do not plan to investigate this program.
    6. Provision of Electricity, Natural Gas, and Water for Less than 
Adequate Remuneration: Petitioners allege that the GOC controls 
electricity, natural gas, and water prices through the National 
Development and Reform Commission. Petitioners state that the 
government caps the price that power generation companies can charge. 
Petitioners maintain that the steel industry has benefited from 
preferential treatment in both the prices of these utilities as well as 
access to the utilities.

[[Page 9997]]

    Petitioners have not sufficiently alleged the elements necessary 
for the imposition of a countervailing duty and did not support their 
allegation with reasonably available information. Therefore, we are not 
investigating the provision of electricity, natural gas, and water for 
less than adequate remuneration.
    7. The State Key Technologies Renovation Project Fund: Petitioners 
allege that the purpose of this subsidy program is to promote 
technological renovations and improvements in key industries through 
the grant of funds equal to two or three years of interest expense 
payments for the projects depending upon the region of the country in 
which the project occurs, not to exceed 15 percent of the total cost of 
the project. Petitioners have not sufficiently alleged the elements 
necessary for the imposition of a countervailing duty and did not 
support their allegation with reasonably available information. 
Therefore, we do not plan to investigate ``The State Key Technologies 
Renovation Project Fund'' program.
    Because petitioner has not sufficiently alleged countervailable 
subsidies for these programs, we are not initiating on them at this 
time.

Application of the Countervailing Duty Law to the PRC

    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, e.g., Tapered 
Roller Bearings and Parts Thereof, Finished and 10 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 final affirmative countervailing duty determination on 
coated free sheet paper from the PRC, the Department determined that 
the current nature of the PRC economy does not create obstacles to 
applying the necessary criteria in the CVD law. See Coated Free Sheet 
Paper from the People's Republic of China: Final Affirmative 
Countervailing Duty Determination, 72 FR 60645 (October 25, 2007) and 
the accompanying Issues and Decision Memorandum at Comment 1. 
Therefore, because the petitioners have provided sufficient allegations 
and support of their allegations to meet the statutory criteria for 
initiating a CVD investigation of CWASPP from the PRC, initiation of a 
CVD investigation is warranted in this case.

Respondent Selection

    For this investigation, the Department expects to select 
respondents based on U.S. Customs and Border Protection (``CBP'') data 
for U.S. imports during the POI. We intend to make our decision 
regarding respondent selection within 20 days of publication of this 
Federal Register notice. The Department invites comments regarding the 
CBP data and respondent selection within seven calendar days of 
publication of this Federal Register notice.

Distribution of Copies of the Petition

    In accordance with Section 702(b)(4)(A)(i) of the Act, 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 CWASPP 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: February 19, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-3510 Filed 2-22-08; 8:45 am]
BILLING CODE 3510-DS-S

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