Polyethylene Retail Carrier Bags From the Socialist Republic of Vietnam: Initiation of Countervailing Duty Investigation and Request for Public Comment on the Application of the Countervailing Duty Law to Imports From the Socialist Republic of Vietnam, 19064-19068 [E9-9565]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 74, Number 79 (Monday, April 27, 2009)]
[Notices]
[Pages 19064-19068]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-9565]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-552-805]


Polyethylene Retail Carrier Bags From the Socialist Republic of 
Vietnam: Initiation of Countervailing Duty Investigation and Request 
for Public Comment on the Application of the Countervailing Duty Law to 
Imports From the Socialist Republic of Vietnam

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

DATES: Effective Date: April 27, 2009.

FOR FURTHER INFORMATION CONTACT: Jun Jack Zhao or Gene Calvert, AD/CVD 
Operations, Office 6, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, DC 20230; telephone: (202) 482-
1396 and (202) 482-3586, respectively.

SUPPLEMENTARY INFORMATION:

The Petition

    On March 31, 2009, the Department of Commerce (the Department) 
received a petition concerning imports of polyethylene retail carrier 
bags (PRCBs) from the Socialist Republic of Vietnam (Vietnam) filed in 
proper form by Hilex Poly Co., LLC and Superbag Corporation 
(collectively, the petitioners), domestic producers of PRCBs. On April 
6, 2009, the Department issued requests for additional information and 
clarification of certain areas of the Petition involving

[[Page 19065]]

countervailable subsidy allegations. See Letter from Barbara E. 
Tillman, Director, AD/CVD Operations, Office 6, to the petitioners, 
``Petitions for the Imposition of Antidumping Duties on Polyethylene 
Retail Carrier Bags (PRCBs) from Indonesia, Taiwan, and Vietnam, and 
Countervailing Duties on Imports of PRCBs from Vietnam: Supplemental 
Questions on the Countervailing Duty Allegations, April 6, 2009.'' 
Based on the Department's request, the petitioners timely filed 
additional information concerning the Petition on April 8, 2009. The 
petitioners submitted a revised exhibit concerning domestic company 
shipments on April 10, 2009, and a revised list of all known Vietnamese 
producers and exporters of PRCBs that are believed to be benefitting 
from countervailable subsidies on April 16, 2009. During the 
consultations with the Government of Vietnam (GOV), see 
``Consultations'' section below, the GOV presented a written statement 
and government publications in opposition of the countervailing duty 
Petition. On April 17, 2009, Bin Tay Import Export Production Services 
Joint Stock Company, Loc Cuong Trading Producing Co., Ltd., Ontrue 
Plastics Co., Ltd., (Vietnam) and Alta Company (collectively, 
Vietnamese producers) submitted comments on the level of industry 
support expressed in the Petition. On April 20, 2009, the petitioners 
submitted rebuttal comments to the GOV and Vietnamese producers 
concerning industry support. The GOV submitted additional government 
publications on April 16 and April 20, 2009.
    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 PRCBs in Vietnam received countervailable 
subsidies within the meaning of section 701 of the Act, and that 
imports materially injure, or threaten material injury to, an industry 
in the United States.
    The Department finds that the petitioners filed this 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 that they are requesting the 
Department to initiate (see, infra, ``Determination of Industry Support 
for the Petition'').

Period of Investigation

    The anticipated period of investigation (POI) is calendar year 
2008. See 19 CFR 351.204(b)(2).

Scope of the Investigation

    The merchandise covered by this investigation is polyethylene 
retail carrier bags. See Attachment to this notice for a complete 
description of the merchandise covered by this investigation.

Comments on Scope of the Investigation

    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 1117, 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 Vietnam (the GOV) for 
consultations with respect to the countervailing duty Petition. The 
Department held these consultations on April 15, 2009. See Memorandum 
to the File, Petition on Polyethylene Retail Carrier Bags (PRCBs) from 
the Socialist Republic of Vietnam (Vietnam): Consultations with the 
Government of Vietnam (GOV), April 16, 2009 (Consultations Memo), on 
file in the CRU.

Determination of Industry Support for the Petition

    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (i) At least 
25 percent of the total production of the domestic like product; and 
(ii) more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support 
for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of 
the Act provides that, if the petition does not establish support of 
domestic producers or workers accounting for more than 50 percent of 
the total production of the domestic like product, the Department 
shall: (i) poll the industry or rely on other information in order to 
determine if there is support for the petition, as required by section 
702(c)(4)(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 U.S. International Trade Commission (ITC), 
which is responsible for determining whether ``the domestic industry'' 
has been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While both the Department and 
the ITC must apply the same statutory definition regarding the domestic 
like product (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 subtitle.'' Thus, the reference point from which the 
domestic like product analysis begins is ``the article subject to an 
investigation,'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition).
    With regard to the domestic like product, 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 PRCBs constitute a single 
domestic like product and we have analyzed industry support in terms of 
that domestic like product. For a discussion of the domestic like 
product analysis in this case, see Countervailing Duty Investigation 
Initiation Checklist: Countervailing Duty Petition on Polyethylene 
Retail Carrier Bags from the Socialist Republic of Vietnam (Initiation 
Checklist), at Attachment II (Analysis of Industry

[[Page 19066]]

Support for the Petition), on file in the CRU.
    With regard to section 702(c)(4)(A) of the Act, 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 the ``Scope of the Investigation'' section above. To 
establish industry support, the petitioners provided their shipments of 
the domestic like product for the year 2008, and compared them to an 
estimate of shipments of the domestic like product for the entire 
industry. See Volume II of the Petition at Exhibit 3, and Supplement to 
the Petition, dated April 10, 2009. The petitioners argue that U.S. 
shipments of PRCBs are a reasonable proxy for U.S. production of PRCBs 
as most PRCBs are produced to order for specific retail customers, and 
that inventories that are maintained are typically small. See Volume II 
of the Petition at Exhibit 3. Based on the fact that total industry 
production data for the domestic like product for 2008 are not 
reasonably available, and that the petitioners have established that 
shipments are a reasonable proxy for production, we have relied upon 
shipment data for purposes of measuring industry support. For further 
discussion, see Initiation Checklist at Attachment II.
    On April 15, 2009, the GOV, an interested party to this proceeding 
as defined in section 771(9)(B) of the Act, provided the Department 
with a written statement to accompany its remarks during consultations 
with the Department regarding the Petition. The first issue raised in 
this statement addresses the GOV's concerns that the petitioners may 
not meet the required threshold for standing. The Department placed the 
GOV's written statement on the record of the Petition. See 
Consultations Memo. Also, on April 17, 2009, we received submissions on 
behalf of Vietnamese producers of PRCBs, interested parties to this 
proceeding as defined in section 771(9)(A) of the Act, questioning the 
industry support calculation. See Initiation Checklist, at Attachment 
II (Analysis of Industry Support for the Petition). On April 20, 2009, 
the petitioners filed their reply to these challenges. For further 
discussion of all of these submissions see Initiation Checklist at 
Attachment II (Analysis of Industry Support for the Petition).
    The Department's review of the data provided in the Petition, 
supplemental submissions, other information on the record, and other 
information readily available to the Department, indicates that the 
petitioners have established industry support. Because the Petition 
establishes support from domestic producers (or workers) accounting for 
more than 50 percent of the total production of the domestic like 
product, the Department is not required to take further action in order 
to evaluate industry support (e.g., polling). See Section 702(c)(4)(D) 
of the Act and Initiation Checklist at Attachment II. Nonetheless, the 
domestic producers (or workers) have met the statutory criteria for 
industry support under section 702(c)(4)(A)(i) of the Act because the 
domestic producers (or workers) who support the Petition account for at 
least 25 percent of the total production of the domestic like product. 
See Initiation Checklist at Attachment II. Finally, the domestic 
producers (or workers) have met the statutory criteria for industry 
support under section 702(c)(4)(A)(ii) of the Act because the domestic 
producers (or workers) who support the Petition account for more than 
50 percent of the production of the domestic like product produced by 
that portion of the industry expressing support for, or opposition to, 
the Petition. 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 Initiation Checklist at Attachment 
II.
    The Department finds that the petitioners filed the Petition on 
behalf of the domestic industry because it is an interested party as 
defined in section 771(9)(C) of the Act and have demonstrated 
sufficient industry support with respect to the countervailing duty 
investigation that they are requesting the Department initiate. See 
Initiation Checklist at Attachment II.

Injury Test

    Because Vietnam 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 Vietnam 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 PRCBs from Vietnam are 
benefitting from countervailable subsidies and that such imports are 
causing, or threatening to cause, material injury to the domestic 
industries producing PRCBs. In addition, the petitioners allege that 
subsidized imports exceed the negligibility threshold provided for 
under section 771(24)(A) of the Act, as required by section 701(a)(1) 
of the Act.
    The petitioners contend that the industries' injured condition is 
illustrated by reduced market share, underselling and price depressing 
and suppressing effects, lost sales and revenue, reduced production, 
reduced shipments, reduced employment, and an overall decline in 
financial performance. See the Petition at pages 13 and 17. We have 
assessed the allegations and supporting evidence regarding material 
injury, threat of material injury, and causation, and we have 
determined that these allegations are properly supported by adequate 
evidence and meet the statutory requirements for initiation. See 
Initiation Checklist at Attachment III (Injury).

Subsidy Allegations

    Section 702(b) of the Act requires the Department to initiate a 
countervailing duty proceeding whenever an interested party files a 
petition on behalf of an industry that: (1) alleges the elements 
necessary for an imposition of a duty under section 701(a) of the Act, 
and (2) is accompanied by information reasonably available to the 
petitioners supporting the allegations. The Department has examined the 
countervailing duty Petition on PRCBs from Vietnam 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 producers and 
exporters of PRCBs from Vietnam receive countervailable subsidies. For 
a discussion of evidence supporting our initiation determination, see 
Initiation Checklist.
    We are including in our investigation the following programs 
alleged in the Petition to provide countervailable subsidies to 
producers and exporters of the subject merchandise:
A. Policy Lending Programs
    1. Preferential Lending for Exporters
    2. Preferential Lending for the Plastics Industry
B. Grant Programs
    1. Export Promotion Program

[[Page 19067]]

    2. Export Bonus Program
    3. New Product Development Program
C. Income Tax Programs
    1. Income Tax Preferences for Exporters
    2. Income Tax Preferences for Foreign Invested Enterprises (FIEs)
    3. Income Tax Preferences for FIEs Operating In Encouraged 
Industries
D. Import Tax and Value Added Tax (VAT) Exemption Programs
    1. Import Tax Exemptions for FIEs Using Imported Goods to Create 
Fixed Assets
    2. Import Tax Exemptions for FIEs Importing Raw Materials
    3. VAT Exemptions for FIEs Using Imported Goods to Create Fixed 
Assets
    For further information explaining why the Department is 
investigating these programs, see Initiation Checklist.

Application of the Countervailing Duty Law to Vietnam

    This is the first countervailing duty Petition filed involving 
Vietnam. Vietnam has been treated as a non-market economy (NME) country 
in all past antidumping duty investigations and administrative reviews. 
See, e.g., Memorandum from Office of Policy, to Faryar Shirzad, 
Assistant Secretary, Import Administration, Antidumping Duty 
Investigation of Certain Frozen Fish Fillets from the Socialist 
Republic of Vietnam - Determination of Market Economy Status, November 
8, 2002 (this document is available online at https://ia.ita.doc.gov/download/vietnam-nme-status/vietnam-market-status-determination.pdf); 
see also Uncovered Innerspring Units from the Socialist Republic of 
Vietnam: Notice of Preliminary Determination of Sales at Less Than Fair 
Value, 73 FR 45738, 45739 (August, 6, 2008), unchanged in Uncovered 
Innerspring Units from the Socialist Republic of Vietnam: Notice of 
Final Determination of Sales at Less Than Fair Value, 73 FR 62479 
(October 21, 2008). 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 Unfinished, From the 
People's Republic of China: Preliminary Results of 2001-2002 
Administrative Review and Partial Rescission of Review, 68 FR 7500 
(February 14, 2003), unchanged in Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, from the People's Republic of China: 
Final Results of 2001-2002 Administrative Review and Partial Rescission 
of Review, 68 FR 70488 (December 18, 2003).
    The petitioners contend that there is no statutory bar to applying 
countervailing duties to imports from non-market economy countries like 
Vietnam. Citing Georgetown Steel Corp. v. United States, 801 F.2d 1308 
(Fed. Cir. 1986) (Georgetown Steel), the petitioners argue that the 
Court of Appeals for the Federal Circuit affirmed the Department's 
discretion regarding application of the countervailing duty law to NME 
countries.
    Following its assessment of another NME country, the People's 
Republic of China (China), the Department, in its final affirmative 
countervailing duty determination on coated free sheet paper from 
China, determined that the current nature of the Chinese economy does 
not create obstacles to applying the necessary criteria in the 
countervailing duty law. See Memorandum to David M. Spooner, Assistant 
Secretary for Import Administration, from the Office of Policy, Import 
Administration, Countervailing Duty Investigation of Coated Free Sheet 
Paper from the People's Republic of China: Whether the Analytical 
Elements of the Georgetown Steel Holding are Applicable to the PRC's 
Present-day Economy, March 29, 2007 (Georgetown Memo); 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; see also 
Circular Welded Carbon Quality Steel Pipe from the People's Republic of 
China: Final Affirmative Countervailing Duty Determination and Final 
Affirmative Determination of Critical Circumstances, 73 FR 31966 (June 
5, 2008) and accompanying Issues and Decision Memorandum at Comment 1.
    The petitioners argue that the Vietnamese economy, like China's 
economy, is substantially different from the Soviet-style economy 
investigated in Georgetown Steel and that the Department should not 
have any special difficulties in the identification and valuation of 
subsidies involving a non-market economy like Vietnam. Finally, the 
petitioners contend that Vietnam's economy significantly mirrors 
China's present-day economy and is at least as different from the 
Soviet-style economy at issue in Georgetown Steel, as China's economy 
was found to be in 2007. The petitioners also argue that Vietnam's 
accession to the World Trade Organization (WTO) allows the Department 
to apply countervailing duties on imports from that country. The WTO 
Subsidies and Countervailing Measures Agreement (SCM Agreement), 
similar to U.S. law, permits the imposition of countervailing duties on 
subsidized imports from member countries and nowhere exempts non-market 
economy imports from being subject to the provisions of the SCM 
Agreement. As Vietnam agreed to the SCM Agreement and other WTO 
provisions on the use of subsidies, the petitioners argue Vietnam 
should be subject to the same disciplines as all other WTO members.

Request for Public Comment on the Application of the Countervailing 
Duty Law to Imports From Vietnam

    Because the petitioners have provided sufficient information to 
support their allegations, meeting the statutory criteria for 
initiating a countervailing duty investigation of PRCBs from Vietnam, 
initiation of a countervailing duty investigation is warranted in this 
case. However, the Department intends to determine whether the 
countervailing duty law should be applied to imports from Vietnam. 
Given the complex legal and policy issues involved, the Department, 
therefore, invites public comment on this matter.
    Any person wishing to comment should file a signed original and 
eight copies of each set of comments which must be submitted no later 
than thirty days after publication of this Notice. Comments should be 
limited to thirty pages, double spaced. The Department will not accept 
comments accompanied by a request that a part or all of the material be 
treated confidentially because of its business proprietary nature or 
for any other reason. All comments responding to this notice of request 
for public comment will be a matter of public record and will be 
available for public inspection and copying at Import Administration's 
CRU. The Department requires that comments be submitted in written 
form, but also recommends submission of comments in electronic form to 
accompany the required paper copies. Comments filed in electronic form 
should be submitted either by e-mail to the webmaster below, or on CD-
ROM, as comments submitted on diskettes are likely to be damaged by 
postal radiation treatment. Comments received in electronic form will 
be made available to the public in Portable Document Format (PDF) on 
the Internet at the Import Administration Web site at the following 
address: https://ia.ita.doc.gov/. Any questions concerning file 
formatting, document conversion, access on the Internet, or other 
electronic filing issues should be addressed to Andrew Lee Beller, 
Import

[[Page 19068]]

Administration Webmaster, at (202) 482-0866, e-mail address: webmaster-support@ita.doc.gov.
    All comments and submissions should be submitted to Barbara E. 
Tillman, Director, AD/CVD Operations, Office 6; Subject: Application of 
the Countervailing Duty Law to Imports from the Socialist Republic of 
Vietnam: Request for Comment; Room 1870, U.S. Department of Commerce, 
14th Street and Constitution Avenue, NW, Washington, DC.

Respondent Selection

    For this investigation, the Department intends to select 
respondents based on U.S. Customs and Border Protection (CBP) data for 
U.S. imports under Harmonized Tariff Schedule of the United States 
(HTSUS) number 3923.21.0085 during the POI (i.e., calendar year 2008). 
We intend to release the CBP data under Administrative Protective Order 
(APO) to all parties with access to information protected by APO within 
five days of the announcement of the initiation of this investigation. 
Interested parties may submit comments regarding the CBP data and 
respondent selection within seven calendar days of publication of this 
notice. We intend to make our decision regarding respondent selection 
within 20 days of publication of this notice.
    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305. Instructions for filing such 
applications may be found on the Department's website at https://ia.ita.doc.gov/apo.

Distribution of Copies of the Petition

    In accordance with section 702(b)(4)(A)(i) of the Act, copies of 
the public versions of the Petition and amendments thereto have been 
provided to the GOV. 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, as provided under 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, by no later than May 15, 
2009, whether there is a reasonable indication that imports of 
subsidized PRCBs from Vietnam materially injure, or threaten 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; see section 703(a)(1) of the Act. 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: April 20, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.

ATTACHMENT

Scope of the Investigation

    The merchandise subject to this investigation is polyethylene 
retail carrier bags (PRCBs), which also may be referred to as t-shirt 
sacks, merchandise bags, grocery bags, or checkout bags. The subject 
merchandise is defined as non-sealable sacks and bags with handles 
(including drawstrings), without zippers or integral extruded closures, 
with or without gussets, with or without printing, of polyethylene film 
having a thickness no greater than 0.035 inch (0.889 mm) and no less 
than 0.00035 inch (0.00889 mm), and with no length or width shorter 
than 6 inches (15.24 cm) or longer than 40 inches (101.6 cm). The depth 
of the bag may be shorter than 6 inches but not longer than 40 inches 
(101.6 cm).
    PRCBs are typically provided without any consumer packaging and 
free of charge by retail establishments, e.g., grocery, drug, 
convenience, department, specialty retail, discount stores, and 
restaurants to their customers to package and carry their purchased 
products. The scope of this investigation excludes (1) polyethylene 
bags that are not printed with logos or store names and that are 
closeable with drawstrings made of polyethylene film and (2) 
polyethylene bags that are packed in consumer packaging with printing 
that refers to specific end-uses other than packaging and carrying 
merchandise from retail establishments, e.g., garbage bags, lawn bags, 
trash-can liners.
    Imports of merchandise included within the scope of this 
investigation are currently classifiable under statistical category 
3923.21.0085 of the Harmonized Tariff Schedule of the United States 
(HTSUS). This subheading may also cover products that are outside the 
scope of this investigation. Furthermore, although the HTSUS subheading 
is provided for convenience and customs purposes, the written 
description of the scope of this investigation is dispositive.

[FR Doc. E9-9565 Filed 4-24-09; 8:45 am]
BILLING CODE 3510-DS-S