Certain Magnesia Carbon Bricks From the People's Republic of China: Preliminary Negative Countervailing Duty Determination, 68241-68249 [E9-30525]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 74, Number 245 (Wednesday, December 23, 2009)]
[Notices]
[Pages 68241-68249]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-30525]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-955]


Certain Magnesia Carbon Bricks From the People's Republic of 
China: Preliminary Negative Countervailing Duty Determination

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

SUMMARY: The Department of Commerce (the Department) preliminarily 
determines that countervailable subsidies are not being provided to 
producers and exporters of Certain Magnesia Carbon Bricks (Bricks) from 
the People's Republic of China (PRC).

DATES: Effective Date: December 23, 2009.

FOR FURTHER INFORMATION CONTACT: Toni Page and Summer Avery, AD/CVD 
Operations, Office 6, Operations, Import Administration, U.S. 
Department of Commerce, Room 7867, 14th Street and Constitution Avenue, 
NW., Washington, DC 20230; telephone: (202) 482-1398 and (202) 482-
4052, respectively.

SUPPLEMENTARY INFORMATION:

Case History

    On July 29, 2009, the Department received a countervailing duty 
(CVD) petition concerning Bricks from the People's Republic of China 
filed in proper form by Resco Products, Inc. (Petitioner). This 
investigation was initiated on August 18, 2009. See Certain Magnesia 
Carbon Bricks from the People's Republic of China: Initiation of 
Countervailing Duty Investigation, 74 FR 42858 (August 25, 2009) 
(Initiation Notice), and accompanying Initiation Checklist.\1\ On 
September 15, 2009, the Department selected Liaoning Mayerton 
Refractories Co., Ltd. (LMR) and RHI Refractories Liaoning Co., Ltd. 
(RHIL) as mandatory respondents in this investigation. See Memorandum 
from the Team through Barbara Tillman, Director, Office 6, Operations, 
to John M. Andersen, Acting Deputy Assistant Secretary for Antidumping 
and Countervailing Duty Operations, Re: Respondent Selection (September 
15, 2009).
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    \1\ A public version of this document and all public 
Departmental memoranda are on file in the Central Records Unit 
(CRU), room 1117 in the main building of the Department.
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    On September 15, 2009, we issued the initial CVD questionnaire to 
the Government of the People's Republic of China (GOC), LMR, and RHIL.
    On October 2, 2009, pursuant to section 703(c)(1)(A) of the Tariff 
Act of 1930 as amended (the Act) and 19 CFR 351.205(e), the Department 
postponed the deadline for the preliminary determination by 55 days to 
no later than December 16, 2009. See Certain Magnesia Carbon Bricks 
From the People's Republic of China: Postponement of Preliminary 
Determination in the Countervailing Duty Investigation, 74 FR 51558 
(October 7, 2009).
    On November 5, 2009, the GOC submitted a response to the initial 
CVD questionnaire (GOC Questionnaire Response). Also on November 5, 
2009, LMR submitted a response for itself and for its affiliate Dalian 
Mayerton Refractories Co. Ltd. (DMR) (collectively, the Mayerton 
Companies) (Mayerton Questionnaire Response);

[[Page 68242]]

and RHIL submitted a response for itself and for its affiliates RHI 
Refractories (Dalian) Co., Ltd. (RHI Dalian) and Liaoning RHI Jinding 
Magnesia Co., Ltd. (RHI Jinding) (collectively, the RHI Companies) (RHI 
Questionnaire Response).
    On November 17, 2009, the Department sent a letter to the Mayerton 
Companies requesting the sales information for its companies. The 
Mayerton Companies submitted the requested sales information on 
November 20, 2009 (Mayerton Sales Submission). In addition, Petitioner 
filed comments regarding the questionnaire responses on November 24, 
2009. On November 30, 2009, the Department sent a letter requesting the 
Mayerton Companies to submit their tax information for the 2007 tax 
year. The Mayerton Companies submitted the requested information on 
December 4, 2009 (Mayerton Tax Submission).
    On December 8, 2009, we issued supplemental questionnaires to the 
GOC and the respondent companies, for which responses are not due until 
after the preliminary determination. On December 14, 2009, counsel for 
Petitioner met with Department officials. See Memorandum to the File 
through Barbara E. Tillman, Director, Office 6, from Toni Page, Case 
Analyst, Re: Meeting with Counsel for Petitioners: Countervailing Duty 
Investigation on Certain Magnesia Carbon Bricks from the People's 
Republic of China (December 14, 2009). Also on December 14, 2009, 
Petitioner submitted further information regarding the provision of 
preferential loans to the Bricks industry. According to Petitioner's 
information, the Bricks under investigation are considered to be 
refractory materials featuring fine-composition and irregularity. These 
refractory materials are identified as a supported project in the 
Directory Catalogue on Readjustment of Industrial Structure (Version 
2005), Decree of the National Development and Reform Commission, No. 
40. See Petitioner's December 14, 2009 Comments.

Scope of the Investigation

    Imports covered by this investigation consist of certain chemically 
bonded (resin or pitch), magnesia carbon bricks with a magnesia 
component of at least 70 percent magnesia (MgO) by weight, regardless 
of the source of raw materials for the MgO, with carbon levels ranging 
from trace amounts to 30 percent by weight, regardless of enhancements, 
(for example, magnesia carbon bricks can be enhanced with coating, 
grinding, tar impregnation or coking, high temperature heat treatments, 
anti-slip treatments or metal casing) and regardless of whether or not 
anti-oxidants are present (for example, antioxidants can be added to 
the mix from trace amounts to 15 percent by weight as various metals, 
metal alloys, and metal carbides).
    Certain magnesia carbon bricks that are the subject of this 
investigation are currently classifiable under subheadings 
6902.10.10.00, 6902.10.50.00, 6815.91.00.00, and 6815.99 of the 
Harmonized Tariff Schedule of the United States (HTSUS). While HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description is dispositive.

Scope Comments

    In accordance with the Preamble to the Department's regulations, we 
set aside a period of time in our Initiation Notice for parties to 
raise issues regarding product coverage, and encouraged all parties to 
submit comments within 20 calendar days of publication of that notice. 
See Initiation Notice, 74 FR at 42858; see also, Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997). 
On September 8, 2009, Pilkington North America Inc. (PNA), a U.S. 
importer of Bricks from China and Mexico, submitted comments on the 
records of the instant CVD investigation, the antidumping duty (AD) 
investigation of Bricks from the PRC, and the AD investigation of 
Bricks from Mexico. In its submission, PNA requested that the 
Department amend the scope to exclude ceramic bonded magnesia bricks 
with or without trace amounts of carbon. The Department is currently 
evaluating PNA's comments and will issue its decision regarding the 
scope of the investigations prior to the preliminary determinations in 
the companion AD investigations due on January 5, 2010.

Injury Test

    Because the PRC is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) the Act, the International Trade Commission 
(ITC) is required to determine whether imports of the subject 
merchandise from the PRC materially injure, or threaten material injury 
to, a U.S. industry. On September 29, 2009, the ITC published its 
affirmative preliminary determination that there is a reasonable 
indication that an industry in the United States is threatened with 
material injury by reason of allegedly subsidized imports of Bricks 
from the PRC. See Certain Magnesia Carbon Bricks From China and Mexico 
Determinations, 74 FR 49889 (September 29, 2009); and Certain Magnesia 
Carbon Bricks From China and Mexico (Preliminary), USITC Pub. 4100, 
Inv. Nos. 701-TA-468 and 731-TA-1166-1167 (September 2009).

Application of the Countervailing Duty Law to Imports From the PRC

    On October 25, 2007, the Department published Coated Free Sheet 
Paper from the People's Republic of China: Final Affirmative 
Countervailing Duty Determination, 72 FR 60645 (October 25, 2007) (CFS 
from the PRC), and the accompanying Issues and Decision Memorandum (CFS 
Decision Memorandum). In CFS from the PRC, the Department found that, 
``given the substantial differences between the Soviet-style economies 
and the PRC's economy in recent years, the Department's previous 
decision not to apply the CVD law to these Soviet-style economies does 
not act as a bar to proceeding with a CVD investigation involving 
products from the {PRC{time} .'' See CFS Decision Memorandum at 
Comments 1 and 6.
    The Department has subsequently affirmed its decision to apply the 
CVD law to the PRC, most recently in Certain Oil Country Tubular Goods 
From the People's Republic of China: Final Affirmative Countervailing 
Duty Determination, Final Negative Critical Circumstances 
Determination, 74 FR 64045 (December 7, 2009), and the accompanying 
Issues and Decision Memorandum.

Period of Investigation

    The period for which we are measuring subsidies, i.e., the period 
of investigation (POI), is January 1, 2008 through December 31, 2008.

Subsidy Valuation Information

Allocation Period

    Under 19 CFR 351.524(b), non-recurring subsidies are allocated over 
a period corresponding to the average useful life (AUL) of the 
renewable physical assets used to produce the subject merchandise. 
Pursuant to 19 CFR 351.524(d)(2), there is a rebuttable presumption 
that the AUL will be taken from the U.S. Internal Revenue Service's 
1977 Class Life Asset Depreciation Range System (IRS Tables), as 
updated by the Department of Treasury. For the subject merchandise, the 
IRS Tables prescribe an AUL of 15 years. As no interested party has 
claimed that the AUL of 15 years is unreasonable, we are allocating 
non-recurring subsidies over a period of 15 years.
    Further, for non-recurring subsidies, we have applied the ``0.5 
percent expense test'' described in 19 CFR

[[Page 68243]]

351.524(b)(2). Under this test, we divide the amount of subsidies 
approved under a given program in a particular year by the sales (total 
sales or total export sales, as appropriate) for the same year. If the 
amount of subsidies is less than 0.5 percent of the relevant sales, 
then the benefits are allocated to the year of receipt rather than 
allocated over the AUL period.
    In accordance with the Department's practice, we have determined 
that we will identify and measure subsidies in the PRC beginning on the 
date of the country's accession to the World Trade Organization (WTO), 
i.e. December 11, 2001. See, e.g., Circular Welded Carbon Quality Steel 
Line Pipe from the People's Republic of China: Final Affirmative 
Countervailing Duty Determination, 73 FR 70961 (November 24, 2008) 
(Line Pipe from the PRC), and accompanying Issues and Decision 
Memorandum (Line Pipe Decision Memorandum) at ``Allocation Period'' 
section and Comment 18.

Benchmarks for Short-Term RMB Denominated Loans

    Section 771(5)(E)(ii) of the Act explains that the benefit for 
loans is the ``difference between the amount the recipient of the loan 
pays on the loan and the amount the recipient would pay on a comparable 
commercial loan that the recipient could actually obtain on the 
market.'' Normally, the Department uses comparable commercial loans 
reported by the company for benchmarking purposes. See 19 CFR 
351.505(a)(3)(i). If the firm did not have any comparable commercial 
loans during the period, the Department's regulations provide that we 
``may use a national interest rate for comparable commercial loans.'' 
See 19 CFR 351.505(a)(3)(ii).
    As noted above, section 771(5)(E)(ii) of the Act indicates that the 
benchmark should be a market-based rate. For the reasons explained in 
CFS from the PRC, loans provided by Chinese banks reflect significant 
government intervention in the banking sector and do not reflect rates 
that would be found in a functioning market. See CFS Decision 
Memorandum at Comment 10. Because of this, any loans received by 
respondents from private Chinese or foreign-owned banks within China 
would be unsuitable for use as benchmarks under 19 CFR 
351.505(a)(2)(i). Similarly, the significant intervention of the 
government within the Chinese banking sector prevents the use of a 
national interest rate for commercial loans as envisaged by 19 CFR 
351.505(a)(3)(ii). Therefore, because of the special difficulties 
inherent in using a Chinese benchmark for loans, the Department is 
selecting an external market-based benchmark interest rate. The use of 
an external benchmark is consistent with the Department's practice. For 
example, in Softwood Lumber from Canada, the Department used U.S. 
timber prices to measure the benefit for government-provided timber in 
Canada. See Notice of Final Affirmative Countervailing Duty 
Determination and Final Negative Critical Circumstances Determination: 
Certain Softwood Lumber Products From Canada, 67 FR 15545 (April 2, 
2002) (Softwood Lumber from Canada), and accompanying Issues and 
Decision Memorandum at ``Analysis of Programs, Provincial Stumpage 
Programs Determined to Confer Subsidies, Benefit.''
    We are calculating the external benchmark using the regression-
based methodology first developed in CFS from the PRC and more recently 
updated in Lightweight Thermal Paper from the People's Republic of 
China. See CFS Decision Memorandum at Comment 10; see also Lightweight 
Thermal Paper From the People's Republic of China: Final Affirmative 
Countervailing Duty Determination, 73 FR 57323 (October 2, 2008) (LWTP 
from the PRC) and accompanying Issues and Decision Memorandum (LWTP 
Decision Memorandum) at ``Benchmarks and Discount Rates'' section. This 
benchmark interest rate is based on the inflation-adjusted interest 
rates of countries with per capita gross national incomes (GNIs) 
similar to the PRC, and takes into account a key factor involved in 
interest rate formation, i.e. quality of a country's institutions, that 
is not directly tied to the state-imposed distortions in the PRC 
banking sector discussed above.
    Following the methodology developed in CFS from the PRC and as 
updated by LWTP from the PRC, we first determined which countries are 
similar to the PRC in terms of GNIs, based on the World Bank's 
classification of countries as: low income; lower-middle income; upper-
middle income; and high income. The PRC falls in the lower-middle 
income category, a group that includes 55 countries as of July 2008. As 
explained in OCTG from the PRC, this pool of countries captures the 
broad inverse relationship between income and interest rates. See 
Certain Oil Country Tubular Goods From the People's Republic of China: 
Preliminary Affirmative Countervailing Duty Determination, Preliminary 
Negative Critical Circumstances Determination, 74 FR 47210, 47216 
(September 15, 2009) (OCTG from the PRC), unchanged in final 
determination.
    Many of these countries reported lending and inflation rates to the 
International Monetary Fund and they are included in that agency's 
international financial statistics (IFS). With the exceptions noted 
below, we have used the interest and inflation rates reported in the 
IFS for the countries identified as ``lower-middle income'' by the 
World Bank. First, we did not include those economies that the 
Department considered to be non-market economies for antidumping (AD) 
purposes for any part of the years in question (Armenia, Azerbaijan, 
Belarus, Georgia, Moldova, and Turkmenistan). Second, the pool 
necessarily excludes any country that did not report both lending and 
inflation rates to IFS for those years. Third, we removed any country 
that reported a rate that was not a lending rate or that based its 
lending rate on foreign-currency denominated instruments. Specifically, 
Jordan reported a deposit rate, not a lending rate, and the rates 
reported by Ecuador and East Timor are dollar-denominated rates; 
therefore, the rates for these three countries have been excluded. 
Finally, for each year the Department calculated an inflation-adjusted 
short-term benchmark rate, we have also excluded any countries with 
aberrational or negative real interest rates for the year in question. 
See Memorandum to File from Nicholas Czajkowski, International Trade 
Compliance Analyst, Re: Preliminary Determination Calculations Loan 
Benchmark Analysis (December 16, 2009).
    The resulting inflation-adjusted benchmark lending rates are 
provided in the calculation memorandum for the Mayerton Companies. See 
Memorandum from Nicholas Czajkowski, International Trade Compliance 
Analyst, Re: Preliminary Determination Calculations for Liaoning 
Mayerton Refractories Co., Ltd. and Dalian Mayerton Refractories Co. 
Ltd. (December 16, 2009) (Mayerton Companies Calculation Memorandum). 
Because these are inflation-adjusted benchmarks, it is necessary to 
adjust the interest payments made by the Mayerton Companies for 
inflation. This was done using the PRC inflation figure as reported in 
the IFS.

Discount Rates

    The lending rates reported in the IFS represent short- and medium-
term lending. However, there are not sufficient publicly available 
long-term interest rate data upon which to base a robust benchmark for 
long-term loans. To address this problem, the

[[Page 68244]]

Department has developed an adjustment to the short- and medium-term 
rates to convert them to long-term rates using Bloomberg U.S. corporate 
BB-rated bond rates. See Light-Walled Rectangular Pipe and Tube From 
the People's Republic of China: Final Affirmative Countervailing Duty 
Investigation Determination, 73 FR 35642 (June 24, 2008) (LWRP from the 
PRC), and accompanying Issues and Decision Memorandum (LWRP Decision 
Memorandum) at Comment 12, ``Discount Rate'' section. In Citric Acid 
from the PRC, this methodology was revised by switching from a long-
term mark-up based on the ratio of the rates of BB-rated bonds to 
applying a spread which is calculated as the difference between the 
two-year BB bond rate and the n-year BB bond rate, where n equals or 
approximates the number of years of the term of the loan in question. 
See Citric Acid and Certain Citrate Salts From the People's Republic of 
China: Final Affirmative Countervailing Duty Determination, 74 FR 16836 
(April 13, 2009) (Citric Acid from the PRC), and accompanying Issues 
and Decision Memorandum (Citric Acid Decision Memorandum) at Comment 
14.

Attribution of Subsidies

    The Department's regulations at 19 CFR 351.525(b)(6)(i) state that 
the Department will normally attribute a subsidy to the products 
produced by the corporation that received the subsidy. However, 19 CFR 
351.525(b)(6)(ii) provides that when two or more corporations with 
cross-ownership produce the subject merchandise, the Department will 
attribute subsidies received by either or both corporations to the 
products produced by both corporations. Moreover, under 19 CFR 
351.525(b)(6)(iv), when there is cross-ownership between an input 
supplier and a downstream producer, and production of the input is 
primarily dedicated to production of the downstream product, the 
Department will attribute subsidies received by the input supplier to 
the combined sales of the input and downstream products produced by 
both corporations (excluding the sales between the two corporations).
    According to 19 CFR 351.525(b)(6)(vi), cross-ownership exists 
between two or more corporations where one corporation can use or 
direct the individual assets of the other corporation(s) in essentially 
the same ways it can use its own assets. This regulation states that 
this standard will normally be met where there is a majority voting 
interest between two corporations or through common ownership of two 
(or more) corporations. The Preamble to the Department's countervailing 
duty regulations also states, ``[I]n certain circumstances, a large 
minority voting interest (for example, 40 percent) or a ``golden 
share'' may also result in cross-ownership.'' See Countervailing 
Duties; Final Rule, 63 FR 65348, 65401 (November 25, 1998). The Court 
of International Trade (CIT) has further upheld the Department's 
authority to attribute subsidies based on whether a company could use 
or direct the subsidy benefits of another company in essentially the 
same way it could use its own subsidy benefits. See Fabrique de Fer de 
Charleroi v. United States, 166 F. Supp. 2d 593, 600-603 (CIT 2001).

Cross-Ownership

The Mayerton Companies
    As discussed above, we selected Liaoning Mayerton Refractories Co., 
Ltd. (i.e. LMR) as a mandatory respondent in the instant investigation. 
LMR reported that it is affiliated with Dalian Mayerton Refractories 
Co., Ltd. (i.e. DMR). Since both companies produce subject merchandise, 
the Mayerton Companies submitted a response to the Department's 
questionnaires providing both DMR's and LMR's information. In these 
responses, DMR and LMR reported that each company is affiliated with 
numerous companies. Among the other affiliated companies, according to 
the Mayerton Questionnaire Response, Mayerton Refractories China Ltd. 
(MRC) is a Chinese company involved in domestic sales (but not 
production) of Bricks, and thus did not sell Bricks to the United 
States. Accordingly, the Mayerton companies did not provide a 
questionnaire response for MRC. We have asked follow-up questions 
regarding MRC in our supplemental questionnaire.
    The Mayerton Questionnaire Response indicates that a single foreign 
(i.e., non-Chinese) parent company is the majority shareholder in each 
company.\2\ See Memorandum from Summer Avery, International Trade 
Compliance Analyst, Re: Cross-Ownership of Mayerton Refractories Co., 
Ltd. and Dalian Mayerton Refractories Co. Ltd. (December 16, 2009) 
(Mayerton Companies Cross-Ownership Memorandum). In addition, the legal 
representative for LMR and DMR is the same individual. Other business 
proprietary information on the record of this proceeding indicates 
cross-ownership between LMR and DMR. See Mayerton Questionnaire 
Response at Exhibit 1 and Exhibit 9(a). See also Mayerton Companies 
Cross-Ownership Memorandum. Therefore, pursuant to 19 CFR 
351.525(b)(6)(vi), we preliminarily determine that DMR and LMR are 
cross-owned.
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    \2\ The ownership percentages are proprietary. See Mayerton 
Companies' Cross-Ownership Memorandum.
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The RHI Companies
    As discussed above RHI Refractories Liaoning Co., Ltd. (i.e. RHIL) 
was selected as a mandatory respondent in the instant investigation. 
RHIL reported that it is affiliated with RHI Refractories (Dalian) Co., 
Ltd. (i.e. RHI Dalian) and Liaoning RHI Jinding Magnesia Co., Ltd. 
(i.e. RHI Jinding). Therefore, the RHI Questionnaire Response covers 
RHIL, RHI Dalian, and RHI Jinding. The RHI Questionnaire Response 
reported that each company is affiliated with numerous companies. 
However, of these affiliated companies, the RHI Companies reported that 
only RHIL and RHI Dalian are involved in the sale and production of 
subject merchandise. We have asked follow-up questions regarding the 
other affiliated companies in our supplemental questionnaire.
    The RHI Companies' questionnaire response indicates that a company 
named RHI AG is the ultimate majority shareholder in RHIL, RHI Dalian, 
and RHI Jinding.\3\ See Memorandum from Summer Avery, International 
Trade Compliance Analyst, Re: Cross-Ownership of RHI Refractories 
Liaoning Co., Ltd., RHI Refractories (Dalian) Co., Ltd., and Liaoning 
RHI Jinding Magnesia Co., Ltd. (December 16, 2009) (RHI Companies 
Cross-Ownership Memorandum). In addition, the RHI Companies stated in 
their questionnaire response that RHI AG has indirect majority voting 
ownership interest in all of the RHI affiliates. See RHI Questionnaire 
Response at III-2. See also RHI Companies Cross-Ownership Memorandum. 
Therefore, pursuant to 19 CFR 351.525(b)(6)(ii), we preliminarily 
determine that RHIL and RHI Dalian are cross-owned and, pursuant to 19 
CFR 351.525(b)(6)(iv), RHIL, RHI Dalian, and RHI Jinding are cross-
owned.
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    \3\ The ownership percentages are proprietary. See RHI Companies 
Cross-Ownership Memorandum.
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Denominator

    When selecting an appropriate denominator for use in calculating 
the ad valorem subsidy rate, the Department considered the basis for 
respondents' receipt of benefits under each program at issue. We have 
preliminarily found that the benefits received by the Mayerton 
Companies and the RHI Companies under the programs found

[[Page 68245]]

countervailable were not tied to export performance or to the 
production of a particular product. As such, for subsidies received by 
the Mayerton Companies and the RHI Companies, we are using that 
company's sales (and those of its cross-owned affiliates where 
applicable) of all products as the denominator in our calculations. See 
19 CFR 351.525(b)(3).
    As discussed in the ``Cross-Ownership'' section above regarding the 
Mayerton Companies, LMR is cross-owned with DMR, a producer of subject 
merchandise that received benefits that were not tied to export 
performance or to the production of a particular product. As such, for 
benefits received by LMR or DMR, we are using total sales of all 
products by LMR and DMR (less any internal sales between LMR and DMR) 
as the denominator in our calculations. See 19 CFR 351.525(b)(6)(iv).
    As discussed in the ``Cross-Ownership'' section above regarding the 
RHI Companies, RHIL, RHI Dalian, and RHI Jinding are cross-owned and 
each received benefits that were not tied to export performance or to 
the production of a particular product. As such, for benefits received 
by RHIL or RHI Dalian, which both produce the subject merchandise, we 
are using total sales of all products by RHIL and RHI Dalian (less any 
internal sales) as the denominator in our calculations. See 19 CFR 
351.525(b)(6)(ii). For benefits received by RHI Jinding, we are using 
total sales of all products by RHIL, RHI Dalian, and RHI Jinding (less 
any internal sales) as the denominator in our calculations, because RHI 
Jinding is an input supplier, and the input is primarily dedicated to 
the production of the subject merchandise. See 19 CFR 
351.525(b)(6)(iv).

Analysis of Programs

I. Programs Preliminarily Determined To Be Countervailable

A. VAT Rebates on Purchases of Domestically Produced Equipment
    As outlined in GUOSHUIFA (1999) No. 171, Notice of the State 
Administration of Taxation Concerning the Trial Administrative Measures 
on Purchase of Domestically Produced Equipment by Foreign Invested 
Enterprises (FIEs), the GOC refunds FIEs with the value added tax (VAT) 
on purchases of certain domestic equipment produced if the purchases 
are within the enterprise's investment amount and if the equipment 
falls under a tax-free category. Article 3 specifies that this program 
is limited to FIEs with completed tax registrations and with foreign 
investment in excess of 25 percent of the total investment in the 
enterprise. Article 4 defines the type of equipment eligible for the 
VAT exemption, which includes equipment falling under the Encouraged 
and Restricted B categories listed in the Notice of the State Council 
Concerning the Adjustment of Taxation Policies for Imported Equipment 
(No. 37 (1997)) and equipment for projects listed in the Catalogue of 
Key Industries, Products and Technologies Encouraged for Development by 
the State. To receive the rebate, an FIE must meet the requirements 
above and, prior to the equipment purchase, bring its ``Registration 
Handbook for Purchase of Domestically Produced Equipment by FIEs'' as 
well as additional registration documents to the taxation 
administration for registration. After purchasing the equipment, FIEs 
must complete a Declaration Form for Tax Refund (or Exemption) of 
Exported Goods, and submit it with the registration documents to the 
tax administration. The Department has previously found this program to 
be countervailable. See Citric Acid and Certain Citrate Salts from the 
People's Republic of China: Preliminary Affirmative Countervailing Duty 
Determination and Alignment of Final Countervailiang Duty Determination 
with Final Antidumping Duty Determination, 73 FR 54367, 54379 
(September 19, 2008), results unchanged in the final determination.
    The RHI Companies reported receiving VAT rebates on their purchases 
of domestically produced equipment under this program in several years. 
The Mayerton Companies reported that they did not use this program. We 
preliminarily determine that the rebate of the VAT paid on purchases of 
domestically produced equipment by FIEs confers a countervailable 
subsidy. The rebates are a financial contribution in the form of 
revenue foregone by the GOC and they provide a benefit to the 
recipients in the amount of the VAT rebate. See section 771(5)(D)(ii) 
of the Act and 19 CFR 351.510(a)(1). We further preliminarily determine 
that the VAT rebates are contingent upon the use of domestic over 
imported goods and, hence, specific under section 771(5A)(C) of the 
Act.
    Normally, we treat exemptions from indirect taxes and import 
charges, such as VAT rebates, as recurring benefits, consistent with 19 
CFR 351.524(c)(1), and allocate these benefits only in the year that 
they were received. However, when an indirect tax or import charge 
exemption is provided for, or tied to, the capital structure or capital 
assets of a firm, the Department may treat it as a non-recurring 
benefit and allocate the benefit to the firm over the AUL. See 19 CFR 
351.524(c)(2)(iii) and 19 CFR 351.524(d)(2).
    As discussed above, the RHI Companies reported receiving VAT 
rebates on its purchases of domestically produced capital equipment 
under this program in several years since the December 11, 2001 cut-off 
date for subsidies. Because these rebates are tied to capital equipment 
purchases, we find it appropriate to treat them as non-recurring 
benefits consistent with 19 CFR 351.524(c)(2)(iii).
    After applying the 0.5 percent test pursuant to 19 CFR 
351.524(b)(2), we found that the VAT rebates received over the years 
should be allocated over time. See Memorandum from Nicholas Czajkowski, 
International Trade Compliance Analyst, Re: Preliminary Determination 
Calculations for RHI Refractories Liaoning Co., Ltd., RHI Refractories 
(Dalian) Co., Ltd., and Liaoning RHI Jinding Magnesia Co., Ltd. 
(December 16, 2009) (RHI Companies Calculation Memorandum). To 
calculate the countervailable subsidy for the RHI Companies, we used 
our standard methodology for non-recurring benefits. See 19 CFR 
351.524(b) and the ``Allocation Period'' section of this notice. 
Specifically, we used the discount rate described above in the 
``Benchmarks and Discount Rates'' section to calculate the amount of 
the benefit attributable to the POI. We divided the benefits 
attributable to the POI by the appropriate denominator (see the 
``Denominator'' section above) to calculate the countervailable subsidy 
of 0.51 percent ad valorem exists for the RHI Companies. See RHI 
Companies Calculation Memorandum.
B. Location-Based Income Tax Reduction Programs for FIEs
    The GOC provides a complex system of tax benefits to FIEs operating 
in Special Economic Areas such as coastal economic zones, export 
processing zones, and economic and technological development zones. For 
example, although the standard corporate income tax rate during the POI 
was 30 percent, FIEs located in the designated economic zones pay 
income tax at a reduced rate of either 15 or 24 percent. FIEs are also 
eligible for further income tax reductions if they are located in ``Old 
Urban Districts'' or ``Coastal Economic Zones'' and are engaged in (1) 
technology or knowledge intensive projects; (2) long-term projects with 
foreign investment; or (3) energy resource development, transportation

[[Page 68246]]

and port construction projects. See the GOC Questionnaire Response at 
Exhibit D1 (FIE Tax Law at Article 7).
    The GOC reports that RHIL is located in Yingkou Economic 
Development Zone, and the applicable tax rate for RHIL under this 
program was less than the standard PRC corporate income tax rate. See 
the GOC Questionnaire Response at page 5, and the RHI Questionnaire 
Response at Appendix 1. The Mayerton Companies did not use this 
program.
    We preliminarily determine that the exemption or reduction in the 
income tax paid by FIEs in specially designated geographic areas under 
this program confers a countervailable subsidy. The exemption/reduction 
is a financial contribution in the form of revenue foregone by the GOC 
and it provides a benefit to the recipients in the amount of the tax 
savings. See section 771(5)(D)(ii) of the Act and 19 CFR 351.509(a)(1). 
We also preliminarily determine that the exemption/reduction is limited 
to enterprises located in designated geographical regions and, hence, 
is specific under section 771(5A)(D)(iv) of the Act. The Department 
also found this program to be countervailable in the CFS investigation. 
See Coated Free Sheet Paper From the People's Republic of China: 
Amended Preliminary Affirmative Countervailing Duty Determination, 72 
FR 17484, 17494 (April 9, 2007) (CFS Amended Preliminary), results 
unchanged in CFS from the PRC.
    To calculate the benefit from this program to the RHI Companies, we 
treated the income tax exemption claimed by RHIL as a recurring 
benefit, consistent with 19 CFR 351.524(c)(1). To compute the amount of 
tax savings, we multiplied RHIL's taxable income by the standard income 
tax rate for corporations (i.e., 30 percent) and subtracted that actual 
amount of income tax paid by RHIL. In accordance with 19 CFR 
351.525(b)(6)(i), we attributed the benefit received to the combined 
sales of RHIL and RHI Dalian. Additional information on this 
calculation is provided in the calculation analysis memorandum for the 
RHI Companies. See RHI Companies Calculation Memorandum. On this basis, 
we preliminarily determine a countervailable subsidy of 0.34 percent ad 
valorem for the RHI Companies for this program.
C. Local Income Tax Exemption and Reduction Programs for ``Productive'' 
FIEs
    Pursuant to Article 9 of the FIE Tax Law and Article 71 of Decree 
85 of the Council of 1991, local provinces can establish eligibility 
criteria and administer the application process for local income tax 
reductions or exemptions for FIEs, effectively extending the tax 
exemptions or reductions that are provided to FIEs by the national 
``Two Free, Three Half'' program.\4\ In its questionnaire response, the 
RHI Companies reported that RHIL participated in this program but none 
of the other cross-owned RHI Companies in the group did. The GOC 
confirmed that RHIL received benefits under this program during the 
POI. See the GOC Questionnaire Response at pages 41-42. The Mayerton 
Companies reported that they did not use this program. The GOC 
confirmed that the Mayerton Companies did not receive benefits under 
this program during the POI. See the GOC Questionnaire Response at 
pages 41-42.
---------------------------------------------------------------------------

    \4\ Under the ``Two Free, Three Half'' program, an FIE that is 
productive and scheduled to operate for not less than ten years may 
be exempted from income tax in the first two years of profitability 
and pay only half of their applicable income taxes for the next 
three years. The Department has previously found this program to be 
countervailable. See, e.g., CFS Decision Memorandum, Line Pipe 
Decision Memorandum, Citric Acid Decision Memorandum, and LWTP 
Decision Memorandum.
---------------------------------------------------------------------------

    We preliminarily determine that the exemption or reduction in the 
local income tax paid by ``productive'' FIEs under this program confers 
a countervailable subsidy. The exemption/reduction is a financial 
contribution in the form of revenue foregone by the government and it 
provides a benefit to the recipients in the amount of the tax savings. 
See section 771(5)(D)(ii) of the Act and 19 CFR 351.509(a)(1). We also 
preliminarily determine that the exemption/reduction afforded by this 
program is limited as a matter of law to certain enterprises, 
``productive'' FIEs, and, hence, is specific under section 
771(5A)(D)(i) of the Act. The Department has also found this program to 
be countervailable in the CFS investigation. See CFS Amended 
Preliminary, 72 FR at 17494, results unchanged in CFS from the PRC.
    To calculate the benefit from this program to the RHI Companies, we 
treated the income tax exemption claimed by RHIL as a recurring 
benefit, consistent with 19 CFR 351.524(c)(1). To compute the amount of 
tax savings, we compared the tax rate paid (1.5 percent) to the rate 
that would have been paid by RHIL otherwise (the standard local rate is 
3 percent) and multiplied the difference by RHIL's taxable income. In 
accordance with 19 CFR 351.525(b)(6)(i), we attributed the benefit 
received to the combined sales of RHIL and RHI Dalian. Additional 
information on this calculation is provided in the calculation analysis 
memorandum for the RHI Companies. See RHI Companies Calculation 
Memorandum. On this basis, we preliminarily determine a countervailable 
subsidy of 0.03 percent ad valorem for the RHI Companies.
D. Income Tax Credits for FIEs Purchasing Domestically Produced 
Equipment
    The Circular of the Ministry of Finance and the State 
Administration of Taxation of the People's Republic of China on 
Distribution of Interim Measures Concerning the Reduction and Exemption 
of Enterprise Income Tax for Investment in Domestic Equipment for 
Technological Renovation (CAISHUZI (1999) (209)) and Circular of the 
Ministry of Finance and the State Administration of Taxation on 
Enterprise Income Tax Credits for Purchases of Domestic Equipment by 
Foreign Invested Enterprises and Foreign Enterprises (CAISHUI (2000) 
No. 49) permit FIEs to obtain tax credits of up to 40 percent of the 
purchase value of domestically produced equipment. Specifically, the 
tax credit is available to FIEs and foreign-owned enterprises whose 
projects are classified in either the Encouraged or Restricted B 
categories of the Catalogue of Industrial Guidance for Foreign 
Investment. The credit can be taken for domestically produced equipment 
so long as the equipment is not listed in the Catalogue of Non-Duty-
Exemptible Articles of Importation.
    The Department has previously found this program to be 
countervailable. See, e.g., Citric Acid, 73 FR at 54371 (September 19, 
2008), results unchanged in the final determination. For this 
preliminary determination, we find that income tax credits for the 
purchase of domestically produced equipment are countervailable 
subsidies. The tax credits are a financial contribution in the form of 
revenue foregone by the government and provide a benefit to the 
recipients in the amount of the tax savings. See section 771(5)(D)(ii) 
of the Act and 19 CFR 351.509(a)(1). We further determine that these 
tax credits are contingent upon use of domestic over imported goods 
and, hence, are specific under section 771(5A)(C) of the Act.
    The RHI Companies reported receiving income tax credits on 
domestically purchased equipment under this program. To calculate the 
benefit for this program, we treated the income tax savings as a 
recurring benefit, consistent with 19 CFR 351.524(c)(1). Based on the 
information

[[Page 68247]]

in the RHI Questionnaire Response, it appears that the RHI Companies 
claimed through subsequent tax returns these income credits under this 
program prior to the POI and that none of the credits were carried 
forward into the tax returns filed in the POI. Accordingly, we 
determine that the RHI Companies did not receive benefits under this 
program during the POI.
E. Preferential Loans and Directed Credit to the Magnesia Carbon Brick 
Industry
    The Department is examining whether Bricks producers receive 
preferential lending through state-owned commercial banks (SOCBs) or 
policy banks. Information on the record of this investigation 
demonstrates that the GOC has highlighted and supported the development 
of Bricks production and that GOC directives in this regard include 
financing support.
    As in Tires from the PRC \5\ and OCTG from the PRC,\6\ the 
Department considered Decision of the State Council on Promulgating the 
``Interim Provisions on Promoting Industrial Structure Adjustment'' for 
Implementation (No. 40 (2005) of the State Council) (Decision No. 40) 
and the Directory Catalogue on Readjustment of Industrial Structure 
(Version 2005) (Directory Catalogue). Consistent with Tires from the 
PRC and OCTG from the PRC, the Department finds that the GOC relied on 
Decision No. 40 and the Directory Catalogue in order to achieve the 
objectives of the Eleventh Five-Year Plan. On August 7, 2009, 
Petitioners placed excerpts from Decision No. 40 on the record of this 
investigation. For the preliminary determination, we are placing 
Decision No. 40 and the Directory Catalogue in their entirety on the 
record of this investigation. See Memorandum to File from Summer Avery, 
Office 6, Operations, Re: Policy Lending Documents of the Government of 
the People's Republic of China (December 16, 2009).
---------------------------------------------------------------------------

    \5\ See Certain New Pneumatic Off-the-Road Tires From the 
People's Republic of China: Final Affirmative Countervailing Duty 
Determination and Final Negative Determination of Critical 
Circumstances, 73 FR 40480 (July 15, 2008), and the accompanying 
Issues and Decision Memorandum at ``Government Policy Lending'' 
section.
    \6\ See OCTG from the PRC at 47217-47218, unchanged in final 
determination. See Certain Oil Country Tubular Goods from the 
People's Republic of China: Final Affirmative Countervailing Duty 
Determination, Final Negative Critical Circumstances Determination, 
74 FR 64045 (December 7, 2009).
---------------------------------------------------------------------------

    Decision No. 40 makes clear that the State, at all levels, has the 
ability and means to implement measures to encourage specific projects. 
We note that Decision No. 40 is explicit in its mandate for the State 
at all levels:

    The people's governments of all provinces, autonomous regions, 
and municipalities directly under the Central Government shall take 
the promotion of industrial structure adjustment as an important 
reform and development task at present and within a period in the 
future lay emphasis on implementation and shall, in accordance with 
the ``Interim Provisions'' formulate specific measures, rationally 
guide the investment directions, encourage and support the 
development of advanced production capacities, restrict and 
eliminate outdated production capacities. All relevant 
administrative departments shall speed up the formulation and 
amendment of policies on public finance, taxation, credit, land, 
import, export, etc., effectively intensify the coordination and 
cooperation with industrial policies, and further improve and 
promote the policy system on industrial structure adjustment.

Decision No. 40 at para. 2. Moreover, Decision No. 40 calls for 
strengthening financing (among other benefits) to encouraged projects 
listed in the Directory Catalogue. Specifically, Article 17 of Decision 
No. 40 states:

    The encouraged investment projects shall be examined, approved, 
ratified or archived in accordance with the relevant provisions of 
the state on investment administration. All financial institutions 
shall provide credit supports in compliance with credit principles. 
The equipment shall be imported within the total amount of 
investments for the importer's own use. Except for the commodities 
listed in the ``Catalogue of Non-tax Free Imported Commodities for 
Domestic Investment Projects (Amended in 2000)'' promulgated by the 
Ministry of Finance, the abovementioned equipment shall still be 
exempted from customs duties and import value-added tax, and shall, 
after the new provisions such as the catalogue of investment 
projects exempted from no tax have been promulgated, be governed by 
such new provisions. As for other preferential policies on 
encouraged industry projects, the relevant provisions of the state 
shall apply.

Decision No. 40 at Article 17. These provisions detail an active role 
for the State in implementing industrial policies, whether through 
industrial policy coordination or through the guidance of financial 
resources towards those projects or products that the State encourages, 
including Bricks which are explicitly designated to be an ``encourage 
industry'' in section VII (21) of the Directory Catalogue, ``Production 
of refractory materials featuring fine-composition and irregularity.'' 
See Petitioners December 14, 2009 Comments.
    As described above, Decision No. 40 makes it clear that the State, 
at all levels, has the ability and means to implement measures, 
including directing financial resources such as credit, in order to 
develop specific projects or products in various industries. We note 
that several provincial and local five year plans covering areas where 
our respondents and their cross-owned companies are located refer to 
the goal of encouraging the production and development of magnesia 
products. In particular, the 11th Yingkou Economic and Social 
Development Five-Year Plan specifically ``calls for the development of 
magnesia bricks of high quality.'' See the GOC Questionnaire Response 
at Exhibit P-13.
    Only the Mayerton Companies had outstanding loans from state-owned 
commercial banks (SOCBs) during the POI. Therefore, on the basis of the 
record information described above, we preliminarily determine that the 
GOC has a policy in place to encourage the development of production of 
Bricks through policy lending. Loans to Bricks producers from policy 
banks and SOCBs in the PRC constitute a direct financial contribution 
from the government, pursuant to section 771(5)(D)(i) of the Act, and 
they provide a benefit equal to the difference between what the 
recipients paid on their loans and the amount they would have paid on 
comparable commercial loans (see section 771(5)(e)(2) of the Act). 
Finally, we determine that the loans are de jure specific because of 
the GOC's policy, as illustrated in the government directive and plans, 
to encourage and support the growth and development of the Bricks 
industry.
    To calculate the benefit under the policy lending program, we 
compared the amount of interest that the Mayerton companies paid on 
their outstanding loans from SOCBs to the amount they would have paid 
on comparable commercial loans. See ``Subsidies Valuation--Benchmarks 
Rates'' section above. Most of the details about these loans are 
business proprietary; for a more complete discussion see Mayerton 
Companies Calculation Memorandum. We summed the benefit attributable to 
the POI and divided this amount by the Mayerton Companies' total sales. 
See the ``Subsidies Valuation -Denominator'' section above. On this 
basis, we calculated a total net subsidy rate of 0.07 percent ad 
valorem for the Mayerton Companies.

III. Programs Preliminarily Determined To Be Not Used

    We preliminarily determine that the RHI Companies and the Mayerton 
Companies did not apply for or receive benefits during the POI under 
the programs listed below. Because of the

[[Page 68248]]

complicated cross-ownership issues in this investigation, we are 
continuing to gather information concerning the reported non-use of 
these programs by all companies that may be cross-owned within each 
company group.
    A. Provision of Land-Use Rights to State-Owned Enterprises (SOEs) 
for Less Than Adequate Remuneration
    B. Two Free/Three Half Program for Foreign-Invested Enterprises 
(FIEs)
    C. Income Tax Reductions for Export-Oriented FIEs
    D. Preferential Income Tax Policy for Enterprises in the Northeast 
Region
    E. Forgiveness of Tax Arrears for Enterprises in the Old Industrial 
Bases of Northeast China
    F. Income Tax Credits for Domestically Owned Companies Purchasing 
Domestically Produced Equipment
    G. Preferential Tax Programs for Enterprises Recognized as High or 
New Technology Enterprises
    H. Northeast Revitalization Program and Related Provincial Policies
    I. The State Key Technology Renovation Project Fund
    J. Famous Brands Programs
    K. Grants to Companies for ``Outward Expansion'' and Export 
Performance in Guangdong Province
    L. Fund for Supporting Technological Innovation for Technological 
Small- and Medium-Sized Enterprises (SMEs)
    M. Development Fund for SMEs
    N. Fund for International Market Exploration by SMEs
    O. Zhejiang Province Program to Rebate Antidumping Costs

IV. Programs for Which We Need Additional Information

A. Provision of Electricity for Less Than Adequate Remuneration
    The Department initiated on the GOC's provision of electricity at 
less than adequate remuneration (LTAR). Under this program, the GOC 
provides electricity to SOEs and special industrial sectors, and/or 
certain provincial, municipal and local governments provide electricity 
at preferential rates to entice investors to locate to certain zones. 
Petitioner alleged that the National Development and Reform Commission 
(NDRC) establishes rates that do not reflect true market prices, and 
that the GOC caps prices charged to end-users and provides direct 
energy subsidies to special industrial sectors.
    The GOC, RHI Companies, and Mayerton Companies reported in their 
respective questionnaire responses that no benefits were provided under 
this program. According to the GOC, there are no price preferences for 
the Bricks industry and each respondent paid rates under the ``Large 
Scale Industry'' classification. See the GOC Questionnaire Response at 
page 9. The Department has requested that the GOC provide the 
additional information needed to complete our analysis of whether this 
program provides a countervailable subsidy to the RHI Companies or the 
Mayerton Companies.
B. Export Restraints of Raw Materials
    Under this program, Petitioner alleged that the GOC has established 
export quotas and a minimum acceptable export sales price (i.e., export 
restraints) \7\ for a number of raw materials, including three types of 
magnesia used in the production of Bricks. Essentially, Petitioner has 
alleged that export restraints on raw materials such as magnesia 
artificially increase the domestic supply of the raw materials, thereby 
decreasing the price of raw materials available to PRC manufacturers. 
All PRC exporters of magnesia are subject to these export restraints, 
including the affiliated and unaffiliated magnesia suppliers of the RHI 
Companies and the Mayerton Companies. Under this system, the GOC 
appears to rank ``bids'' received from exporters by price and quantity 
and then awards exporting rights to the companies that can command the 
highest export prices.
---------------------------------------------------------------------------

    \7\ The U.S. Trade Representative requested a WTO panel against 
the GOC over export restraints on raw materials (including magnesia) 
on June 23, 2009. See WTO Dispute Settlement Proceeding Regarding 
China -Measures Related to the Exportation of Various Raw Materials, 
74 FR 32218 (July 7, 2009).
---------------------------------------------------------------------------

    In its response, the GOC has stated that there is no basis under 
WTO rules to treat export restraints as a countervailable program as 
such restraints cannot constitute a government-entrusted or government-
directed provision of goods and therefore do not constitute financial 
contributions under Article 1.1.(a) of the Subsidy and Countervailable 
Measures Agreement. Moreover, the GOC reported that the purpose of 
setting export quotas for magnesia is to help regulate an exhaustible 
natural resource and protect the environment, as processing magnesia is 
an energy-intensive, high-polluting activity. Although the GOC 
maintains multiple factors affect magnesia production, the GOC also 
concedes that elimination of the export quota on magnesia ``could have 
a variety of short term effects related to production and consumption 
patterns in domestic and overseas markets.'' See the GOC Questionnaire 
Response at page 26.
    The Department has issued a supplemental questionnaire requesting 
that the GOC fully describe and document the process whereby it 
determined that magnesia should be subject to an export quota as well 
as what factors it considers in setting that export quota and minimum 
acceptable export price. In addition, our supplemental questions to the 
responding companies request that each provide complete volume and 
value information regarding the domestic purchases of magnesia during 
the POI as well as other information relevant to our analysis.

Verification

    In accordance with section 782(i)(1) of the Act, we will verify the 
information submitted by the respondents prior to making our final 
determination.

Suspension of Liquidation

    In accordance with section 703(d)(1)(A)(i) of the Act, we have 
determined individual rates for The Mayerton Companies and The RHI 
Companies. Section 705(c)(5)(A)(i) provides that the all others rate 
will generally be an amount equal to the weighted average 
countervailable subsidy rates established for exporters or producers 
individually investigated, excluding any zero or de minimis 
countervailable subsidy rates and any rates determined entirely on the 
basis of the facts available. In this case, however, the 
countervailable subsidy rates for all of the individually investigated 
exporters or producers are de minimis. Section 705(c)(5)(A)(ii) 
provides that, when this is the case, the administering authority may 
use any reasonable method to establish the all others rate, including 
averaging the weighted average countervailable subsidy rates determined 
for the exporters and producers individually examined. Thus, to 
calculate the all-others rate, we weight-averaged the individual rates 
of the Mayerton Companies and the RHI Companies based on each company's 
respective sales during the POI. These rates are summarized in the 
table below:

[[Page 68249]]



------------------------------------------------------------------------
             Producer/exporter                       Subsidy rate
------------------------------------------------------------------------
The Mayerton Companies (Dalian Mayerton      de minimis percent ad
 Refractories Co., Ltd. and Liaoning          valorem.
 Mayerton Refractories Co., Ltd.).
The RHI Companies (RHI Refractories          de minimis percent ad
 Liaoning Co., Ltd., RHI Refractories         valorem.
 (Dalian) Co., Ltd., and Liaoning RHI
 Jinding Magnesia Co., Ltd.).
All Others.................................  de minimis percent ad
                                              valorem.
------------------------------------------------------------------------

    Because all of the rates are de minimis, we preliminarily determine 
that no countervailable subsidies are being provided to the production 
or exportation of certain magnesia carbon bricks in the PRC. As such, 
we will not direct U.S. Customs and Border Protection to suspend 
liquidation of entries of certain magnesia carbon bricks from the PRC.

ITC Notification

    In accordance with section 703(f) 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 relating to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an administrative protective order, without the written consent 
of the Assistant Secretary for Import Administration.
    In accordance with section 705(b)(2) of the Act, if our final 
determination is affirmative, the ITC will make its final determination 
within 45 days after the Department makes its final determination.

Disclosure and Public Comment

    In accordance with 19 CFR 351.224(b), the Department will disclose 
to the parties the calculations for this preliminary determination 
within five days of its announcement. Case briefs for this 
investigation must be submitted no later than one week after the 
issuance of the last verification report. See 19 CFR 351.309(c) (for a 
further discussion of case briefs). Rebuttal briefs, which must be 
limited to issues raised in the case briefs, must be filed within five 
days after the deadline for submission of case briefs. See 19 CFR 
351.309(d). A list of authorities relied upon, a table of contents, and 
an executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes.
    In accordance with 19 CFR 351.310(c), we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on this preliminary determination. Individuals who wish to 
request a hearing must submit a written request within 30 days of the 
publication of this notice in the Federal Register to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, 14th Street and Constitution Avenue, NW., Washington, DC 20230. 
Parties will be notified of the schedule for the hearing and parties 
should confirm the time, date, and place of the hearing 48 hours before 
the scheduled time. Requests for a public hearing should contain: (1) 
Party's name, address, and telephone number; (2) the number of 
participants; and (3) to the extent practicable, an identification of 
the arguments to be raised at the hearing.
    This determination is issued and published pursuant to sections 
703(f) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).

    Dated: December 16, 2009.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. E9-30525 Filed 12-22-09; 8:45 am]
BILLING CODE 3510-DS-P