Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses From the People's Republic of China: Final Affirmative Countervailing Duty Determination, 59212-59217 [2010-24184]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 75, Number 186 (Monday, September 27, 2010)]
[Notices]
[Pages 59212-59217]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-24184]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-959]


Certain Coated Paper Suitable for High-Quality Print Graphics 
Using Sheet-Fed Presses From the People's Republic of China: Final 
Affirmative Countervailing Duty Determination

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

SUMMARY: The Department of Commerce (the ``Department'') has determined 
that countervailable subsidies are being provided to producers and 
exporters of certain coated paper suitable for high-quality print 
graphics using sheet-fed presses from the People's Republic of China 
(``PRC''). For information on the estimated countervailing duty rates, 
please see the ``Suspension of Liquidation'' section, below.

DATES: Effective Date: September 27, 2010.

FOR FURTHER INFORMATION CONTACT: David Neubacher, Jennifer Meek, and 
Mary Kolberg, AD/CVD Operations, Office 1, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-5823, (202) 482-2778, and (202) 482-1785, respectively.

SUPPLEMENTARY INFORMATION: 

Period of Investigation

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

Case History

    The following events have occurred since the publication of the 
preliminary determination in the Federal Register on March 9, 2010. See 
Certain Coated Paper Suitable for High-Quality Print Graphics Using 
Sheet-Fed Presses from the People's Republic of China: Preliminary 
Affirmative Countervailing Duty Determination and Alignment of Final 
Countervailing Duty Determination with Final Antidumping Duty 
Determination, 75 FR 10774 (March 9, 2010) (``Preliminary 
Determination'').
    On March 4, 2010, the Department initiated investigations into new 
subsidy allegations on several grant programs to Shandong Sun Paper 
Industry Co., Ltd. and Yanzhou Tianzhang Paper Industry Co., Ltd. 
(collectively, ``Sun companies''). See Memorandum from David Neubacher, 
International Trade Compliance Analyst, Office 1, to Susan Kuhbach, 
Director, Office 1, Import Administration, regarding ``New Subsidy 
Allegations,'' (March 4, 2010), available in the Department's Central 
Records Unit in Room 7046 of the main Department building (``CRU'').
    On March 5, 2010, the Department issued a questionnaire regarding 
the new subsidy allegations to the Government of the People's Republic 
of China (``GOC''), and received a response on April 2, 2010.
    On March 17, 2010, the Department received a submission from 
Appleton Coated LLC, NewPage Corporation, S.D.Warren Company d/b/a 
Sappi Fine Paper North America, and United Steel, Paper and Forestry, 
Rubber, Manufacturing, Energy, Allied Industrial and Service Workers 
International Union (collectively, ``Petitioners'') regarding 
additional information to be collected from Gold East (Jiangsu) Co., 
Ltd., Gold Huasheng Paper Co., Ltd., and their reporting cross-owned 
companies (collectively, ``Gold companies'') in connection with the 
entered value adjustment.
    The Department issued supplemental questionnaires to the GOC on 
April 14, May 12, and May 21, 2010, and received responses on April 29, 
May 19, and May 26, 2010, respectively. The Department issued 
supplemental questionnaires to the Gold companies on April 22, May 12, 
and May 21, 2010, and received responses on May 14, May 20 (a portion 
of the response was timely filed on May 27), and May 26, 2010, 
respectively. Finally, the Department issued supplemental 
questionnaires to the Sun companies on April 1, and May 14, 2010, and 
received responses on April 27, and May 28, 2010, respectively.
    On March 31, 2010, the Department determined to investigate 
Petitioners' uncreditworthiness allegation for the Gold companies for 
the years 2006-2008. See Memorandum from Nancy Decker, Program Manager, 
Office 1, to Susan Kuhbach, Director, Office 1, Import Administration, 
regarding ``Uncreditworthiness Allegation for Gold East (Jiangsu) Co., 
Ltd., (``Gold East''), Gold Huasheng Paper Co., Ltd. (``GH''), Ningbo 
Zhonghua Paper Co., Ltd. (``NZ''), Ningbo Asia Pulp & Paper Co. Ltd., 
and Hainan Jinhai Pulp and Paper Co., Ltd. (collectively, the ``APP 
companies''),'' (March 31, 2010), available in the CRU.
    On June 1, 2010, the Department published an amended affirmative 
preliminary determination to correct a significant ministerial error in 
the Preliminary Determination. See Certain Coated Paper Suitable For 
High-Quality Print Graphics Using Sheet-Fed Presses from the People's 
Republic of China: Amended Affirmative Preliminary Countervailing Duty 
Determination, 75 FR 30370 (June 1, 2010) (``Amended Preliminary 
Determination'').
    From June 7, 2010, to June 18, 2010, the Department conducted 
verification of the questionnaire responses submitted by the GOC, Gold 
companies, and Sun companies. See Memorandum from David Neubacher and 
Jennifer Meek, International Trade Compliance Analysts, Office 1, to 
Susan H. Kuhbach,

[[Page 59213]]

Director, AD/CVD Operations, Office 1, regarding ``Verification Report 
of the Government of the People's Republic of China'' (July 28, 2010); 
Memorandum from David Neubacher, David Layton, and Jennifer Meek, 
International Trade Compliance Analysts, Office 1, to Susan H. Kuhbach, 
Director, AD/CVD Operations, Office 1, regarding ``Verification Report 
of Shandong Sun Paper Industry Joint Stock Co., Ltd., and Yanzhou 
Tianzhang Paper Industry Co., Ltd.'' (August 4, 2010); and Memorandum 
from David Neubacher, Scott Holland, David Layton, and Jennifer Meek, 
International Trade Compliance Analysts, Office 1, to Susan H. Kuhbach, 
Director, AD/CVD Operations, Office 1, regarding ``Verification Report 
of Gold East Paper (Jiangsu) Co., Ltd. and its reported cross-owned 
affiliates'' (August 24, 2010).
    On August 26, 2010, we issued a preliminary determination regarding 
the creditworthiness of the Gold companies for the years 2006-2008. See 
Memorandum from Mary Kolberg, International Trade Compliance Analyst, 
Office 1, to Susan H. Kuhbach, Director, AD/CVD Operations, Office 1, 
regarding ``Preliminary Creditworthiness Determination for Gold East 
Paper (Jiangsu) Co., Ltd. and its Cross-Owned Affiliates,'' (August 26, 
2010).
    On August 27, 2010, the Department issued its Post-Preliminary 
Analysis for the Gold and Sun companies. See Memorandum from The Team, 
Office 1, to Ronald K. Lorentzen, Deputy Assistant Secretary for Import 
Administration, regarding ``Countervailing Duty Investigation of 
Certain Coated Paper Suitable for High-Quality Print Graphics Using 
Sheet-Fed Presses from the People's Republic of China: Post-Preliminary 
Analysis Memorandum for Gold East Paper (Jiangsu) Co., Ltd. (``GE''), 
Gold Huasheng Paper Co., Ltd. (``GHS''), and their reported cross-owned 
affiliates (collectively, ``APP companies''),'' (August 27, 2010) and 
Memorandum from The Team, Office 1, to Ronald K. Lorentzen, Deputy 
Assistant Secretary for Import Administration, regarding 
``Countervailing Duty Investigation of Certain Coated Paper Suitable 
for High-Quality Print Graphics Using Sheet-Fed Presses from the 
People's Republic of China: Post-Preliminary Analysis Memorandum for 
Shandong Sun Paper Industry Joint Stock Co., Ltd. (``Sun Paper'') and 
Yanzhou Tianzhang Paper Industry Co. Ltd. (``Yanzhou Tianzhang'') 
(collectively, ``Sun companies''),'' (August 27, 2010), available in 
the CRU. (These analyses are referred to herein as ``Post-Preliminary 
Analyses''.)
    On August 30, 2010, the Department determined not to investigate a 
new subsidy allegation regarding currency undervaluation. See 
Memorandum form The Team to Ronald K. Lorentzen, Deputy Assistant 
Secretary for Import Administration, regarding ``New Subsidy 
Allegation--Currency,'' (August 30, 2010), available in the CRU.
    We received case briefs from the GOC, the Gold companies, the Sun 
companies, and Petitioners on September 7, 2010. The same parties 
submitted rebuttal briefs on September 10, 2010.
    The GOC, Gold companies, and Petitioners requested a hearing. The 
same parties later withdrew their requests. Therefore, no hearing was 
held.

Scope of the Investigation

    The merchandise covered by this investigation includes certain 
coated paper and paperboard \1\ in sheets suitable for high quality 
print graphics using sheet-fed presses; coated on one or both sides 
with kaolin (China or other clay), calcium carbonate, titanium dioxide, 
and/or other inorganic substances; with or without a binder; having a 
GE brightness level of 80 or higher; \2\ weighing not more than 340 
grams per square meter; whether gloss grade, satin grade, matte grade, 
dull grade, or any other grade of finish; whether or not surface-
colored, surface-decorated, printed (except as described below), 
embossed, or perforated; and irrespective of dimensions (``Certain 
Coated Paper'').
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    \1\ `Paperboard' refers to Certain Coated Paper that is heavier, 
thicker and more rigid than coated paper which otherwise meets the 
product description. In the context of Certain Coated Paper, 
paperboard typically is referred to as `cover,' to distinguish it 
from `text.'
    \2\ One of the key measurements of any grade of paper is 
brightness. Generally speaking, the brighter the paper the better 
the contrast between the paper and the ink. Brightness is measured 
using a GE Reflectance Scale, which measures the reflection of light 
off of a grade of paper. One is the lowest reflection, or what would 
be given to a totally black grade, and 100 is the brightest measured 
grade.
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    Certain Coated Paper includes: (a) Coated free sheet paper and 
paperboard that meets this scope definition; (b) coated groundwood 
paper and paperboard produced from bleached chemi-thermo-mechanical 
pulp (``BCTMP'') that meets this scope definition; and (c) any other 
coated paper and paperboard that meets this scope definition.
    Certain Coated Paper is typically (but not exclusively) used for 
printing multi-colored graphics for catalogues, books, magazines, 
envelopes, labels and wraps, greeting cards, and other commercial 
printing applications requiring high quality print graphics.
    Specifically excluded from the scope are imports of paper and 
paperboard printed with final content printed text or graphics.
    As of 2009, imports of the subject merchandise are provided for 
under the following categories of the Harmonized Tariff Schedule of the 
United States (``HTSUS''): 4810.14.11, 4810.14.1900, 4810.14.2010, 
4810.14.2090, 4810.14.5000, 4810.14.6000, 4810.14.70, 4810.19.1100, 
4810.19.1900, 4810.19.2010, 4810.19.2090, 4810.22.1000, 4810.22.50, 
4810.22.6000, 4810.22.70, 4810.29.1000, 4810.29.5000, 4810.29.6000, 
4810.29.70, 4810.32, 4810.39 and 4810.92. While HTSUS subheadings are 
provided for convenience and customs purposes, the written description 
of the scope of this investigation is dispositive.

Scope Comments

    Following the Preliminary Determination, on August 3, 2010, the 
Department issued a decision memorandum addressing three scope issues 
in this and the concurrent antidumping and countervailing duty 
investigations on certain coated paper from Indonesia and the People's 
Republic of China: (1) Whether to clarify the scope of these 
investigations to exclude multi-ply coated paper and paperboard; (2) 
whether to modify the scope language by striking the phrase ``suitable 
for high-quality print graphics;'' and (3) whether to add three HTSUS 
numbers which may include in-scope merchandise (i.e., HTSUS 4810.32, 
4810.39 and 4810.92). See August 3, 2010, Memorandum to Ronald K. 
Lorentzen, Deputy Assistant Secretary for Import Administration, from 
Susan Kuhbach, Director, Office 1, entitled ``Scope'' (August 3, 2010 
Scope Memorandum). For the reasons explained in the August 3, 2010, 
Scope Memorandum, the Department determined that: (1) Multi-ply 
products that otherwise meet the description of the scope of the 
investigations are not excluded from the scope; (2) the ``suitable for 
high-quality print graphics'' language should not be deleted from the 
scope; and (3) the three HTSUS numbers at issue should be added to the 
scope.
    The Department subsequently provided the interested parties an 
opportunity to comment on its post-preliminary scope determination. In 
response, the respondents in these investigations filed a case brief on 
August 20, 2010, and Petitioners filed a rebuttal brief on August 24, 
2010. Based on the Department's analysis of these

[[Page 59214]]

comments and the factual records of these investigations, the 
Department continues to find that multi-ply coated paper and paperboard 
are not excluded from the scope of the investigations, that the 
``suitable for high-quality print graphics'' language should be 
maintained, and that the three HTSUS numbers listed above should be 
added to the scope. For a complete discussion of the parties' comments 
and the Department's position, see Memorandum from Susan Kuhbach, 
Acting Deputy Assistant Secretary for Antidumping and Countervailing 
Duty Operations, to Ronald K. Lorentzen, Deputy Assistant Secretary for 
Import Administration, entitled ``Issues and Decision Memorandum for 
the Final Determination in the Countervailing Duty Investigation of 
Certain Coated Paper Suitable For High-Quality Print Graphics Using 
Sheet-Fed Presses from the People's Republic of China'' (September 20, 
2010) (hereafter ``Decision Memorandum''), which is hereby adopted by 
this notice.

Injury Test

    Because the PRC is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Tariff Act of 1930, as amended (``the 
Act''), the International Trade Commission (the ``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 
November 9, 2009, the U.S. International Trade Commission (``ITC'') 
issued its affirmative preliminary determination that there is a 
reasonable indication that an industry in the United States is 
materially injured by reason of allegedly subsidized imports of coated 
paper from the PRC. See Certain Coated Paper Suitable for High-Quality 
Print Graphics Using Sheet-Fed Presses From China and Indonesia; 
Determinations, Investigation Nos. 701-TA-470-471 and 731-TA-1169-1170, 
74 FR 61174 (November 23, 2009).

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the above-referenced Decision 
Memorandum. Attached to this notice as an Appendix is a list of the 
issues that parties have raised and to which we have responded in the 
Decision Memorandum. Parties can find a complete discussion of all 
issues raised in this investigation and the corresponding 
recommendations in this public memorandum, which is on file in the CRU. 
In addition, a complete version of the Decision Memorandum can be 
accessed directly on the Internet at https://ia.ita.doc.gov/frn/. The 
paper copy and electronic version of the Decision Memorandum are 
identical in content.

Use of Adverse Facts Available

    Consistent with the Preliminary Determination, we have continued to 
rely on facts available and to draw an adverse inference, in accordance 
with sections 776(a) and (b) of the Act, for certain of our findings. 
With respect to the GOC's provision of papermaking chemicals, we 
determine that kaolin clay, caustic soda and titanium dioxide are being 
provided by governmental authorities for the reasons explained in the 
Preliminary Determination and we determine that the subsidy conferred 
through the GOC's provision of caustic soda is specific for the reasons 
explained in the Post-Preliminary Analysis. With respect to the GOC's 
provision of land use rights in the Yangpu Economic Development Zone, 
we determine that the subsidy is specific for the reason explained in 
Post-Preliminary Analyses. Finally, with respect to the GOC's provision 
of electricity, we determine that the GOC has made a financial 
contribution that is specific, and we have applied an adverse inference 
is determining the benefit for the reasons explained in the Preliminary 
Determination.

Sun Companies

    In a departure from the Preliminary Determination, the Department 
now finds that the use of ``facts otherwise available'' pursuant to 
section 776(a) of the Act is warranted with regard to the Sun 
companies. At verification, we learned that numerous companies that 
meet the Department's criteria for being ``cross-owned,'' as that term 
is defined in 19 CFR 351.525(b)(6)(vi), and that produced certain 
coated paper or inputs for paper products were not included in the Sun 
companies' responses. Therefore, information that the Department needs 
to calculate the Sun companies' subsidy rate has not been provided and 
the Department is unable to accurately determine the appropriate level 
of subsidization provided to the Sun companies. By not providing this 
information despite being in a position to do so, the Sun companies 
failed to act to the best of their ability. Accordingly, we find that 
an adverse inference is warranted, pursuant to section 776(b) of the 
Act.
    For the final determination and consistent with the Department's 
recent practice, we are computing a total AFA rate for the Sun 
companies, generally using program-specific rates determined for the 
cooperating respondent or in past cases. Specifically, for programs 
other than those involving income tax exemptions and rate reductions, 
we will apply the highest calculated rate for the identical program in 
this investigation if a responding company used the identical program. 
If there is no identical program match within the investigation, we 
will use the highest non-de minimis rate calculated for the same or 
similar program in another PRC CVD investigation. Absent an above-de 
minimis subsidy rate calculated for the same or similar program, we 
will apply the highest calculated subsidy rate for any program 
otherwise listed that could conceivably be used by the Sun companies. 
See, e.g., Certain Kitchen Shelving and Racks from the People's 
Republic of China: Final Affirmative Countervailing Duty Determination, 
74 FR 37012 (July 27, 2009) and the accompanying Issues and Decision 
Memorandum at ``Use of Facts Otherwise Available and Adverse Facts 
Available'' at 4-5. The Department has further amended its methodology 
to exclude any calculated rate for a program by a voluntary respondent. 
See Aluminum Extrusions From the People's Republic of China: 
Preliminary Affirmative Countervailing Duty Determination, 75 FR 54302, 
54305 (September 7, 2010).
    Also, as explained in Certain Tow-Behind Lawn Groomers and Certain 
Parts Thereof from the People's Republic of China: Initiation of 
Countervailing Duty Investigation, 73 FR 42324 (July 21, 2008) and 
accompanying Initiation Checklist, where the GOC can demonstrate 
through complete, verifiable, positive evidence that non-cooperative 
companies (including all their facilities and cross-owned affiliates) 
are not located in particular provinces whose subsidies are being 
investigated, the Department does not intend to include those 
provincial programs in determining the countervailable subsidy rate for 
the non-cooperative companies.
    The GOC failed to provide verifiable information demonstrating that 
the Sun companies are located in particular provinces or that they have 
no facilities or cross-owned affiliates in any other province in the 
PRC, as requested. Therefore, the Department makes the adverse 
inference that the Sun companies have facilities and/or cross-owned 
affiliates that received subsidies under all of the sub-national 
programs alleged prior to the selection of mandatory respondents.
    In deciding which facts to use as AFA, section 776(b) of the Act 
and 19 CFR 351.308(c)(1) authorize the

[[Page 59215]]

Department to rely on information derived from: (1) The petition; (2) a 
final determination in the investigation; (3) any previous review or 
determination; or (4) any other information placed on the record. The 
Department's practice when selecting an adverse rate from among the 
possible sources of information is to ensure that the rate is 
sufficiently adverse ``as to effectuate the statutory purposes of the 
adverse facts available rule to induce respondents to provide the 
Department with complete and accurate information in a timely manner.'' 
See, e.g., Notice of Final Determination of Sales at Less Than Fair 
Value: Static Random Access Memory Semiconductors From Taiwan, 63 FR 
8909, 8932 (February 23, 1998). The Department's practice also ensures 
``that the party does not obtain a more favorable result by failing to 
cooperate than if it had cooperated fully.'' See Uruguay Round 
Agreements Act Statement of Administrative Action (``SAA''), attached 
to H.R. Rep. No. 103-316, Vol. I, at 870 (1994), reprinted in 1994 
U.S.C.C.A.N 3773, 4163.
    Consistent with this, we have calculated the Sun companies' 
countervailable subsidy rate as follows:
Loans
    For the ``Preferential Lending to the Coated Paper Industry'' and 
``Fast Growth High-Yield Forestry Program Loans'' programs, we have 
applied the loan rate calculated for the Gold companies in this 
investigation, 8.89 percent, to each program.
Grants
    The Department included in its investigation numerous grant 
programs: ``Funds for Forestry Plantation Construction and 
Management,'' ``State Key Technologies Renovation Project Fund,'' 
``Loan Interest Subsidies for Major Industrial Technology Reform 
Projects in Wuhan,'' ``Funds for Water Treatment Improvement Projects 
in the Songhuajiang Basin,'' ``Special Fund for Energy Saving 
Technology Reform in Wuhan and Shougang Municipality,'' ``Clean 
Production Technology Fund,'' ``Famous Brands Awards,'' ``Grants to 
Enterprises Achieving RMB 10 Million in Sales Revenue and Implementing 
`Three Significant Projects,' '' ``Grants to Large Enterprises in 
Jining City,'' ``Funds for Water Treatment and Pollution Control 
Projects for Three Rivers and Three Lakes,'' ``Grants for Programs 
Under the 2007 Science and Technology Development Plan in Shandong 
Province,'' ``Special Funds for Economic and Trade Development,'' and 
``Interest Subsidies for Forestry Loans.'' The Gold companies did not 
use any of these programs and the Department has not calculated above 
de minimis rates for any of these programs in prior investigations. 
Moreover, all previously calculated rates for grant programs from prior 
PRC CVD investigations have been de minimis. Therefore, for each of 
these programs, we have determined to use the highest calculated 
subsidy rate by a non-voluntary respondent for any program otherwise 
listed, which could conceivably have been used by the Sun companies. 
This rate was 8.89 percent for the ``Government Policy Lending 
Program'' calculated for the Gold companies in this investigation.
Income Tax Rate Reduction and Exemption Programs
    For ``The `Two Free, Three Half' Program,'' ``Income Tax Subsidies 
for Foreign Invested Enterprises (`FIEs') Based on Geographic 
Location,'' ``Income Tax Reduction for FIEs Purchasing Domestically 
Produced Equipment,'' ``Local Income Tax Exemption and Reduction 
Program for `Productive FIEs,' '' ``Preferential Tax Policies for 
Technology or Knowledge-Intensive FIEs,'' ``Preferential Tax Programs 
for FIEs that are New or High Technology Enterprises,'' ``Income Tax 
Reductions for High-Technology Industries in Guandong Province,'' 
``Income Tax Exemption Program for Export-Oriented FIEs,'' we have 
applied an adverse inference that the Sun companies paid no income tax 
during the POI (i.e., calendar year 2008). The standard income tax rate 
for corporations in the PRC was 30 percent, plus a three percent 
provincial income tax rate. See GOC's Response to the Department's 
Initial Questionnaire, dated January 8, 2010. Therefore, the highest 
possible benefit for these income tax programs is 33 percent. We are 
applying the 33 percent AFA rate on a combined basis (i.e., the eight 
programs combined provided a 33 percent benefit). This 33 percent AFA 
rate does not apply to tax credit and refund programs.
Other Tax Benefits and VAT/Tariff Reductions and Exemptions
    We are using the rates calculated for the Gold companies in this 
investigation for the following programs: ``Preferential Tax Policies 
for Research and Development at FIEs'' (0.01 percent); ``Exemption from 
Maintenance and Construction Taxes and Education Surcharges for FIEs'' 
(0.34 percent); ``Value Added-Tax and Tariff Exemptions on Imported 
Equipment'' (3.46 percent); ``Domestic VAT Refunds for Companies 
Located in the Hainan Economic Development Zone'' (0.37 percent); and 
``VAT Rebates on Domestically Produced Equipment'' (0.20 percent). For 
the programs the Gold companies did not use, ``Corporate Income Tax 
Refund Program for Reinvestment of FIE Profits in Export Orientated 
Enterprises,'' and ``Income Tax Credits for Domestically Owned 
Companies Purchasing Domestically Produced Equipment,'' we have used 
the highest non-de minimis rate for any indirect tax program from a PRC 
CVD investigation. The rate we selected is 1.51 percent, which was the 
rate calculated for respondent Gold East Paper (Jiangsu) Co., Ltd. 
(``GE'') for the ``Value-added Tax and Tariff Exemptions on Imported 
Equipment,'' program. See Coated Free Sheet Paper from the People's 
Republic of China: Final Affirmative Countervailing Duty Determination, 
72 FR 60645 (October 25, 2007) and accompanying Issues and Decision 
Memorandum at 14.
Provision of Goods and Services for Less Than Adequate Remuneration 
(``LTAR'')
    For ``Provision of Electricity for LTAR,'' ``Provision of 
Papermaking Chemicals for LTAR,'' and ``Land in the Yangpu Economic 
Development Zone,'' we have used the rates calculated for the Gold 
companies in this investigation, 0.08 percent, 0.80 percent and 0.85 
percent, respectively.
Economic Development Zones (``EDZs'')
    For the ``Subsidies in the Nanchang Economic Development Zone,'' 
Petitioners alleged that land, water and electricity were provided to 
producers of coated paper for LTAR in the Nanchang EDZ. For land, we 
have applied the rate calculated for the Gold companies in this 
investigation, 0.85 percent. For water, the Department has not 
calculated an above de minimis rate for this program in prior 
investigations. Therefore, we have applied the land for LTAR rate 
calculated for the Gold companies in this investigation, 0.85 percent 
because this program is similar to other EDZ LTAR programs in this 
investigation. We are not applying a sub-national rate for electricity, 
as we are already applying a national-level rate to the Sun companies 
as AFA.
    For ``Subsidies in the Wuhan Economic Development Zone,'' 
Petitioners alleged that land was provided to producers of coated paper 
at LTAR in the Wuhan EDZ. Therefore, we have applied the rate 
calculated for the Gold companies in this investigation, 0.85 percent. 
For ``Subsidies in the Yangpu Economic Development Zone,'' Petitioners 
alleged that land and electricity were provided to producers of coated 
paper at LTAR in the Yangpu

[[Page 59216]]

EDZ. For land, we are applying the rate calculated for the Gold 
companies in this investigation, 0.85 percent. For electricity, as 
previously discussed we are not applying a sub-national rate. Finally, 
for ``Subsidies in the Zhenjiang Economic Development Zone,'' 
Petitioners alleged that electricity was provided to producers of 
coated paper at LTAR in the Zhenjiang EDZ. As discussed above, we are 
not applying a sub-national rate for electricity.
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation or review, it shall, to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at its disposal. Secondary information is ``information 
derived from the petition that gave rise to the investigation or 
review, the final determination concerning the subject merchandise, or 
any previous review under section 751 concerning the subject 
merchandise.'' See e.g., SAA, at 870. The Department considers 
information to be corroborated if it has probative value. See id. To 
corroborate secondary information, the Department will, to the extent 
practicable, examine the reliability and relevance of the information 
to be used. The SAA emphasizes, however, that the Department need not 
prove that the selected facts available are the best alternative 
information. See SAA at 869.
    With regard to the reliability aspect of corroboration, we note 
that these rates were calculated in recent final CVD determinations. 
Further, the calculated rates were based upon verified information 
about the same or similar programs. Moreover, no information has been 
presented in this investigation that calls into question the 
reliability of these calculated rates that we are applying as AFA. 
Finally, unlike other types of information, such as publicly available 
data on the national inflation rate of a given country or national 
average interest rates, there typically are no independent sources for 
data on company-specific benefits resulting from countervailable 
subsidy programs.
    With respect to the relevance aspect of corroborating the rates 
selected, the Department will consider information reasonably at its 
disposal in considering the relevance of information used to calculate 
a countervailable subsidy benefit. Where circumstances indicate that 
the information is not appropriate as AFA, the Department will not use 
it. See Fresh Cut Flowers From Mexico; Final Results of Antidumping 
Duty Administrative Review, 61 FR 6812 (February 22, 1996).
    In the absence of record evidence concerning these programs due to 
Sun companies' decision to impede the investigation, the Department has 
reviewed the information concerning PRC subsidy programs in this and 
other cases. For those programs for which the Department has found a 
program-type match, we find that, because these are the same or similar 
programs, they are relevant to the programs of this case. For the 
programs for which there is no program-type match, the Department has 
selected the highest calculated subsidy rate for any PRC program from a 
non-voluntary respondent from which the Sun companies could receive a 
benefit to use as AFA. The relevance of this rate is that it is an 
actual calculated CVD rate for a PRC program from which the Sun 
companies could conceivably receive a benefit. Further, this rate was 
calculated for a period close to the POI in the instant case. Moreover, 
the Sun companies' failure to respond to requests for information has 
``resulted in an egregious lack of evidence on the record to suggest an 
alternative rate.'' See Shanghai Taoen Int'l Trading Co., Ltd. v. 
United States, 360 F. Supp. 2d 1339, 1348 (Ct. Int'l Trade 2005). Due 
to the lack of participation by the Sun companies and the resulting 
lack of record information concerning these programs, the Department 
has corroborated the rates it selected to the extent practicable.
    On this basis, we determine that the AFA countervailable subsidy 
rate for the Sun companies is 178.03 percent ad valorem.

Suspension of Liquidation

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have 
calculated individual rates for each producer/exporter of the subject 
merchandise individually investigated. Section 705(c)(5)(A)(i) of the 
Act states that for companies not investigated, we will determine an 
``all others'' rate equal to the weighted-average countervailable 
subsidy rates established for exporters and producers individually 
investigated, excluding any zero and de minimis countervailable subsidy 
rates, and any rates determined entirely under section 776 of the Act. 
As the Sun companies' subsidy rate was determined entirely under 
section 776 of the Act, the Gold companies' calculated rate was used as 
the All Others rate.

------------------------------------------------------------------------
                                                             Net subsidy
                   Exporter/manufacturer                         rate
------------------------------------------------------------------------
Gold East Paper (Jiangsu) Co., Ltd, Gold Huasheng Paper            17.64
 Co., Ltd., Gold East Trading (Hong Kong) Company Ltd.,
 Ningbo Zhonghua Paper Co., Ltd., and Ningbo Asia Pulp &
 Paper Co., Ltd............................................
Shandong Sun Paper Industry Joint Stock Co., Ltd. and             178.03
 Yanzhou Tianzhang Paper Industry Co., Ltd.................
All Others.................................................        17.64
------------------------------------------------------------------------

    Also, in accordance with section 703(d) of the Act, we instructed 
U.S. Customs and Border Protection to discontinue the suspension of 
liquidation for countervailing duty purposes for subject merchandise 
entered on or after July 7, 2010, but to continue the suspension of 
liquidation of entries made from March 9, 2010, through July 6, 2010.
    We will issue a countervailing duty order if the ITC issues a final 
affirmative injury determination, and we will require a cash deposit of 
estimated countervailing duties for such entries of merchandise in the 
amounts indicated above. If the ITC determines that material injury, or 
threat of material injury, does not exist, this proceeding will be 
terminated and all estimated deposits or securities posted as a result 
of the suspension of liquidation will be refunded or canceled.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our determination. In addition, we are making available to the 
ITC all non-privileged and non-proprietary information related to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an APO, without the written consent of the Assistant Secretary 
for Import Administration.

Return or Destruction of Proprietary Information

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder

[[Page 59217]]

to parties subject to an administrative protective order (``APO'') of 
their responsibility concerning the destruction of proprietary 
information disclosed under APO in accordance with 19 CFR 
351.305(a)(3). Timely written notification of the return/destruction of 
APO materials or conversion to judicial protective order is hereby 
requested. Failure to comply with the regulations and terms of an APO 
is a violation which is subject to sanction.
    This determination is published pursuant to sections 705(d) and 
777(i) of the Act.

    Dated: September 20, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.

Appendix

List of Comments and Issues in the Decision Memorandum

General Issues

Comment 1 Application of CVD Law to the PRC
Comment 2 Application of the CVD Law to NMEs and the Administrative 
Protection Act
Comment 3 Double Counting/Overlapping Remedies
Comment 4 Cutoff Date for Identifying Subsidies

Currency

Comment 5 Opportunity to Comment and the Initiation Standard
Comment 6 The Determination Not To Investigate the Alleged Currency 
Subsidy
Comment 7 The Department's Analysis of a Unified Rate of Exchange

Scope

Comment 8 Burden Imposed on Respondents
Comment 9 Whether Multi-ply Paperboard Was Intended To Be in the 
Scope
Comment 10 Physical Characteristics and End-use Applications 
Distinguish Multi-ply Paper From the Covered Merchandise
Comment 11 Whether the Department Should Retain the ``Suitability'' 
Language in the Scope Description
Comment 12 Whether Inclusion of Multi-ply Paper in the Scope Affects 
Respondent Selection
Comment 13 Scope Expansion Violates Standing and Injury Requirements

Chemicals for LTAR

Comment 14 Benchmarks--Papermaking Chemicals
Comment 15 Provision of Papermaking Chemicals for LTAR--Specificity
Comment 16 Government Ownership and Determining Whether a Financial 
Contribution Has Occurred

Preferential Lending to the Coated Paper Industry

Comment 17 Whether Chinese Banks Are Authorities
Comment 18 Whether the Policy Loan Program Is Specific

Lending Benchmarks

Comment 19 Whether Negative Real Interest Rates Should Be Excluded 
From the Regression
Comment 20 Whether the Regression Is Statistically Valid
Comment 21 Should the Department Use an In-Country Benchmark
Comment 22 Terms of Loan Rates in the IMF Data
Comment 23 Whether the Long-Term and Discount Rates Are Flawed

Provision of Land for LTAR

Comment 24 Whether HYDC Is an Authority
Comment 25 Financial Contribution
Comment 26 Whether To Use an In-country Benchmark
Comment 27 Whether There Are Flaws in the Thai Benchmark
Comment 28 Specificity of Land for LTAR Based on AFA

Issues Related to Sun Companies

Comment 29 Whether To Use Revised Sales Values for the Sun Companies
Comment 30 Whether To Apply Adverse Facts Available to Sun 
Companies' Unreported Loans
Comment 31 Whether To Apply Facts Available to Sun Companies' 
Unreported Cross-Owned Companies

Issues Related to Gold Companies

Comment 32 Whether To Grant the Gold Companies an EV Adjustment
Comment 33 Creditworthiness
Comment 34 Whether To Adjust the Uncreditworthiness Benchmark
Comment 35 GE Sales Denominator
Comment 36 Whether To Attribute Subsidies Received by Input 
Suppliers Whose Inputs Are Not Used for Merchandise Exported to the 
United States
Comment 37 Whether the Department Should Attribute Subsidies From 
Pulp Producers Based on the Percentage of Total Pulp Sales to the 
Paper Producers Covered
Comment 38 Whether To Countervail Additional Financing Reported by 
the Gold Companies
Comment 39 Whether To Adjust the Gold Companies' Interest 
Calculation
Comment 40 Whether To Adjust JHP's Reported VAT and Duty Exemptions 
on Imported Equipment
Comment 41 Whether To Use an Alternative Electricity Benchmark
Comment 42 Whether To Apply AFA to JAP and JHP Caustic Soda 
Purchases

[FR Doc. 2010-24184 Filed 9-24-10; 8:45 am]
BILLING CODE 3510-DS-P