Certain Kitchen Appliance Shelving and Racks From the People's Republic of China: Preliminary Results of the Countervailing Duty Administrative Review, 62364-62373 [2011-26013]
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Federal Register / Vol. 76, No. 195 / Friday, October 7, 2011 / Notices
Dated: September 30, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import
Administration.
Background
Administrative Review’’ for this CVD
order. See Antidumping or
Countervailing Duty Order, Finding, or
Suspended Investigation; Opportunity
To Request Administrative Review, 75
FR 53635, 53636 (September 1, 2010).
On September 30, 2010, Nashville Wire
Products Inc. and SSW Holding
Company, Inc. (collectively
‘‘Petitioners’’) requested a review of ten
companies. On October 28, 2010, we
initiated a review of five of the
companies: Wireking; NKS; Leader
Metal Industry Co., Ltd. (aka Marmon
Retail Services Asia) (‘‘Leader Metal’’);
Hangzhou Dunli Import and Export Co.,
Ltd./Hangzhou Dunli Industry Co., Ltd.
(‘‘Dunli’’); and Jiangsu Weixi Group Co.
(‘‘Jiangsu Weixi’’). See Initiation of
Antidumping and Countervailing Duty
Administrative Reviews, 75 FR 66349,
66351 (October 28, 2010), as corrected
by Initiation of Antidumping and
Countervailing Duty Administrative
Reviews; Correction, 75 FR 69054
(November 10, 2010) (‘‘Initiation
Correction’’).1 On November 29, 2010,
after receiving further information from
Petitioners, we initiated reviews of two
additional companies requested by
Petitioners: Asia Pacific CIS (Wuxi) Co.,
Ltd. (‘‘Asia Pacific CIS’’) and Hengtong
Hardware Manufacturing (Huizhou) Co.,
Ltd. (‘‘Hengtong’’). See Initiation of
Antidumping and Countervailing Duty
Administrative Reviews, 75 FR 73036,
73038 (November 29, 2010).
In order to select mandatory
respondents for this review, we issued
questionnaires on December 3, 2010, to
the seven companies covered by the
review, requesting information about
the quantity and value (‘‘Q&V’’) of
subject merchandise exports made to
the United States during the POR (‘‘Q&V
questionnaires’’). As in the underlying
investigation, we did not rely on CBP
data for respondent selection because
the Harmonized Tariff Schedule of the
United States (‘‘HTSUS’’) categories that
include subject merchandise are broad
and contain products other than the
subject merchandise. See Memorandum
to Susan H. Kuhbach from Joseph
Shuler, regarding ‘‘Selection of
Respondents for the Countervailing
Duty Administrative Review of Certain
Kitchen Appliance Shelving and Racks
from the People’s Republic of China’’
On July 27, 2009, the Department
published a CVD order on Kitchen
Racks from the PRC. See Certain Kitchen
Appliance Shelving and Racks From the
People’s Republic of China:
Countervailing Duty Order, 74 FR 46973
(September 14, 2009) (‘‘CVD Order’’).
On September 1, 2010, we published a
notice of ‘‘Opportunity to Request
1 The Department notes that only the POR for the
antidumping duty administrative review was
included in the November 10, 2010 notice. See
Initiation Correction, 75 FR at 69059. All notices
concerning the administrative review of the
countervailing duty order apply to the POR
referenced in the initiation notices and this notice,
generally January 7, 2009, through December 31,
2009 (see ‘‘Period of Review’’ section below for
further discussion).
DEPARTMENT OF COMMERCE
International Trade Administration
[C–570–942]
[FR Doc. 2011–26016 Filed 10–6–11; 8:45 am]
Certain Kitchen Appliance Shelving
and Racks From the People’s Republic
of China: Preliminary Results of the
Countervailing Duty Administrative
Review
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
North American Free Trade Agreement
(NAFTA), Article 1904 Binational Panel
Reviews; Notice of Completion of
Panel Review
NAFTA Secretariat, United
States Section, International Trade
Administration, Department of
Commerce.
AGENCY:
Notice of Completion of Panel
Review of the International Trade
Commission’s final determination of
Certain Welded Large Diameter Line
Pipe from Mexico (Secretariat File No.
USA–MEX–2007–1904–03).
ACTION:
Pursuant to the Decision of
the Binational Panel dated August 29,
2011, affirming the International Trade
Commission’s final determination on
remand described above, the panel
review was completed on September 29,
2011.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Ellen Bohon, United States Secretary,
NAFTA Secretariat, Suite 2061, 14th
and Constitution Avenue, Washington,
DC 20230, (202) 482–5438.
On August
29, 2011, the Binational Panel issued a
Decision of the Panel affirming the
International Trade Commission’s
remand determination concerning
Certain Welded Large Diameter Line
Pipe from Mexico (Secretariat File No.
USA–MEX–2007–1904–03). The
Secretariat was instructed to issue a
Notice of Completion of Panel Review
on the 31st day following the issuance
of the Notice of Final Panel Action, if
no request for an Extraordinary
Challenge Committee was filed. No such
request was filed. Therefore, on the
basis of the Panel Order and Rule 80 of
the Article 1904 Panel Rules, the Panel
Review was completed and the panelists
were discharged from their duties
effective September 29, 2011.
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SUPPLEMENTARY INFORMATION:
Dated: October 3, 2011.
Ellen Bohon,
United States Secretary, NAFTA Secretariat.
[FR Doc. 2011–25952 Filed 10–6–11; 8:45 am]
BILLING CODE 3510–GT–P
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Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(‘‘the Department’’) is conducting an
administrative review of the
countervailable duty order on certain
kitchen appliance shelving and racks
(‘‘Kitchen Racks’’) from the People’s
Republic of China (‘‘PRC’’). The period
of review (‘‘POR’’) is January 7, 2009,
through December 31, 2009 (see further
explanation in the ‘‘Period of Review’’
section of this notice). This review
covers multiple exporters/producers,
two of which are being individually
reviewed as mandatory respondents. We
preliminarily find that the mandatory
respondents, Guangdong Wireking
Housewares & Hardware Co., Ltd.
(‘‘Wireking’’) and New King Shan (Zhu
Hai) Co., Ltd. (‘‘NKS’’), received
countervailable subsidies during the
POR. Their countervailing duty (‘‘CVD’’)
rates have been used to calculate the
rate applied to the other firms subject to
this review. If these preliminary results
are adopted in our final results of
review, we will instruct U.S. Customs
and Border Protection (‘‘CBP’’) to assess
countervailing duties as detailed in the
‘‘Preliminary Results of Review’’ section
of this notice. Interested parties are
invited to comment on these
preliminary results.
DATES: Effective Date: October 7, 2011.
FOR FURTHER INFORMATION CONTACT:
Alexander Montoro or Jennifer Meek,
Office of 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) 482–0238
and (202) 482–2778, respectively.
SUPPLEMENTARY INFORMATION:
AGENCY:
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Federal Register / Vol. 76, No. 195 / Friday, October 7, 2011 / Notices
(January 25, 2011) (‘‘Respondent
Selection Memorandum’’). We received
responses from five companies. We
confirmed the delivery of the Q&V
questionnaires to the two producers/
exporters that did not respond, Asia
Pacific CIS and Jiangsu Weixi. See
Memorandum to the File from Joseph
Shuler, regarding ‘‘Delivery
Confirmation of Quantity and Value
Questionnaires’’ (January 10, 2011)
(‘‘Delivery Confirmation Memo’’).
On January 25, 2011, we selected
Wireking and NKS as mandatory
respondents. See Respondent Selection
Memorandum.
On January 28, 2011, we issued CVD
questionnaires to the Government of the
PRC (‘‘GOC’’), Wireking, and NKS. On
February 14, 2011, we issued a
correction to the CVD questionnaire to
Wireking and NKS. We received
responses to our questionnaires from
NKS on March 14, 2011 (‘‘NQR’’) and
from the GOC and Wireking on March
22, 2011 (‘‘GQR’’ and ‘‘WQR,’’
respectively).
On June 15, 2011, we issued
supplemental CVD questionnaires to the
GOC, Wireking, and NKS. We received
a partial response from NKS on June, 29,
2011 (‘‘NSQR1a’’) and a response to the
remaining portion of the supplemental
CVD questionnaire on July 15, 2011. On
July 13, 2011 we received a response
from Wireking (‘‘WSQR1’’), and on July
14, 2011, we received a response from
the GOC (‘‘GSQR1’’).
On April 8, 2011, Petitioners
requested that the Department expand
its CVD administrative review to
include one additional (new) subsidy
program. We initiated on this program
on June 28, 2011. See Memorandum to
Susan Kuhbach from Jennifer Meek and
Patricia Tran, regarding ‘‘Countervailing
Duty Administrative Review of Certain
Kitchen Appliance Shelving and Racks
from the People’s Republic of China:
Initiation of New Subsidy Allegation’’
(June 28, 2011). On July 1, 2011, we
issued a questionnaire regarding the
new subsidy allegation (‘‘NSA’’) to the
GOC, Wireking, and NKS. On July 15,
2011, we received responses from the
GOC and Wireking regarding the NSA
questionnaire, and on July 18, 2011, we
received a response to the NSA
questionnaire from NKS (‘‘NNSAQR’’).
On August 12, 2011, we issued
second supplemental questionnaires to
the GOC, Wireking, and NKS. On
August 19, 2011, we received a response
from the GOC and NKS (‘‘GSQR2’’ and
‘‘NSQR2,’’ respectively). We received
Wireking’s response on August 26, 2011
(‘‘WSQR2’’). On August 26, 2011, we
issued a third supplemental
questionnaire to the GOC. We received
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a response from the GOC on September
2, 2011. On September 19, 2011, we
issued a third supplemental
questionnaire to NKS. We received a
response from NKS on September 23,
2011.
On May 13, 2011, we extended the
deadline for the preliminary results
until September 30, 2011. See Certain
Kitchen Shelving and Racks From the
People’s Republic of China: Extension of
Time Limit for Preliminary Results of
Countervailing Duty Administrative
Review, 76 FR 27990 (May 13, 2011).
Scope of the Order
The scope of the order consists of
shelving and racks for refrigerators,
freezers, combined refrigerator-freezers,
other refrigerating or freezing
equipment, cooking stoves, ranges, and
ovens. Certain kitchen appliance
shelving and racks are defined as
shelving, baskets, racks (with or without
extension slides, which are carbon or
stainless steel hardware devices that are
connected to shelving, baskets, or racks
to enable sliding), side racks (which are
welded wire support structures for oven
racks that attach to the interior walls of
an oven cavity that does not include
support ribs as a design feature), and
sub-frames (which are welded wire
support structures that interface with
formed support ribs inside an oven
cavity to support oven rack assemblies
utilizing extension slides) with the
following dimensions:
• Shelving and racks with
dimensions ranging from 3 inches by 5
inches by 0.10 inch to 28 inches by 34
inches by 6 inches; or
• Baskets with dimensions ranging
from 2 inches by 4 inches by 3 inches
to 28 inches by 34 inches by 16 inches;
or
• Side racks from 6 inches by 8
inches by 0.10 inch to 16 inches by 30
inches by 4 inches; or
• Sub-frames from 6 inches by 10
inches by 0.10 inch to 28 inches by 34
inches by 6 inches.
The subject merchandise is comprised
of carbon or stainless steel wire ranging
in thickness from 0.050 inch to 0.500
inch and may include sheet metal of
either carbon or stainless steel ranging
in thickness from 0.020 inch to 0.20
inch. The subject merchandise may be
coated or uncoated and may be formed
and/or welded. Excluded from the scope
of the order is shelving in which the
support surface is glass.
The merchandise subject to the order
is currently classifiable in the HTSUS
statistical reporting numbers
8418.99.80.50, 7321.90.50.00,
7321.90.60.40, 7321.90.60.90,
8418.99.80.60, 8419.90.95.20,
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8516.90.80.00, and 8516.90.80.10.
Although the HTSUS subheadings are
provided for convenience and customs
purposes, the written description of the
scope of the order is dispositive.
Period of Review
We are conducting our analysis in this
review on an annual basis, i.e., for the
entire calendar year 2009. However, the
duties calculated will be applied as
follows: for refrigeration shelving duties
will be applied to entries from January
7, 2009 through May 6, 2009, and
September 9, 2009, through December
31, 2009; for oven racks duties will
apply to entries from September 9, 2009,
through December 31, 2009.2
Use of Facts Otherwise Available and
Adverse Inferences
Sections 776(a)(1) and (2) of the Tariff
Act of 1930, as amended (‘‘the Act’’),
provide that the Department shall apply
‘‘facts otherwise available’’ if necessary
information is not on the record or if an
interested party or any other person: (A)
Withholds information that has been
requested; (B) fails to provide
information within the deadlines
established, or in the form and manner
requested by the Department, subject to
subsections (c)(1) and (e) of section 782
of the Act; (C) significantly impedes a
proceeding; or (D) provides information
that cannot be verified as provided by
section 782(i) of the Act.
Section 776(b) of the Act further
provides that the Department may use
an adverse inference in applying the
facts otherwise available when a party
has failed to cooperate by not acting to
the best of its ability to comply with a
request for information.
1. Non-Cooperative Companies
As explained in the ‘‘Background’’
section above, two companies in this
review, Asia Pacific CIS and Jiangsu
Weixi, did not provide a response to the
Department’s Q&V questionnaire issued
during the respondent selection process.
We confirmed the delivery of the Q&V
questionnaires to these companies. See
Delivery Confirmation Memo.
Accordingly, we determine that these
non-cooperating companies withheld
requested information and significantly
impeded this proceeding. Specifically,
by not responding to requests for
2 Entries of certain refrigeration shelving
occurring during the period May 7, 2009, through
September 8, 2009, were not suspended for CVD
purposes due to the termination of provisional
measures. Entries of certain oven racks occurring
before September 9, 2009, were liquidated at the
time of the CVD order because the International
Trade Commission (‘‘ITC’’) found threat of material
injury on certain oven racks. See CVD Order, 74 FR
at 46974–75.
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information concerning the Q&V of their
sales, the companies impeded the
Department’s ability to select the most
appropriate respondents in this review.
Thus, we are basing the CVD rate for
these non-cooperating companies on
facts otherwise available, pursuant to
sections 776(a)(2)(A) and (C) of the Act.
We further preliminarily determine
that an adverse inference is warranted,
pursuant to section 776(b) of the Act. By
failing to submit responses to the
Department’s Q&V questionnaire, these
companies did not cooperate to the best
of their ability in this review.
Accordingly, we preliminarily find that
an adverse inference is warranted to
ensure that the non-cooperating
companies will not obtain a more
favorable result than had they fully
complied with our request for
information.
In deciding which facts to use as
adverse facts available (‘‘AFA’’), section
776(b) of the Act and 19 CFR
351.308(c)(1) and (2) authorize the
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
Statement of Administrative Action
(‘‘SAA’’) accompanying the Uruguay
Round Agreements Act, H.R. Rep. No.
103–316, Vol. I, at 870 (1994), reprinted
at 1994 U.S.C.C.A.N. 4040, 4199.
In applying AFA for these noncooperative companies, we are guided
by the Department’s approach in recent
CVD investigations and reviews. See,
e.g., Aluminum Extrusions From the
People’s Republic of China: Final
Affirmative Countervailing Duty
Determination, 76 FR 18521 (April 4,
2011) (‘‘Aluminum Extrusions from the
PRC’’), and accompanying Issues and
Decision Memorandum (‘‘Aluminum
Extrusions from the PRC Decision
Memorandum’’) at ‘‘Application of
Adverse Inferences: Non-Cooperative
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Companies’’ section;3 Circular Welded
Austenitic Stainless Pressure Pipe from
the People’s Republic of China: Final
Affirmative Countervailing Duty
Determination, 74 FR 4936 (January 28,
2009), and accompanying Issues and
Decision Memorandum at ‘‘Application
of Facts Available and Use of Adverse
Inferences’’ section; and Certain HotRolled Carbon Steel Flat Products from
India: Final Results and Partial
Rescission of Countervailing Duty
Administrative Review, 74 FR 20923
(May 6, 2009), and accompanying Issues
and Decision Memorandum at ‘‘SGOC
Industrial Policy 2004–2009’’ section.
Under this practice, the Department
computes the total AFA rate for noncooperating companies generally using
program-specific rates calculated for the
cooperating respondents in the instant
review or prior reviews of instant case,
or calculated in prior CVD cases
involving the country under review (in
the instant case, the PRC).
In these preliminary results, for the
income tax rate reduction or exemption
programs, we are applying an adverse
inference that the non-cooperating
companies paid no income taxes during
2009. For programs other than those
involving income tax rate reduction or
exemption programs, we have first
sought to apply, where available, the
highest, above de minimis subsidy rate
calculated for an identical program from
any segment of this proceeding. Absent
such a rate, we have applied, where
available, the highest, above de minimis
subsidy rate calculated for a similar
program from any segment of this
proceeding. Absent an above de minimis
subsidy rate calculated for the same or
similar program in this proceeding, we
have applied the highest non-de
minimis rate calculated for the same or
similar program (based on treatment of
the benefit) in another PRC CVD
proceeding. Absent an above de minimis
subsidy rate calculated for the same or
similar program in any PRC CVD
3 In the underlying investigation, the Department
excluded from its AFA calculation for noncooperative Q&V companies sub-national programs
alleged after respondent selection. See Certain
Kitchen Shelving and Racks from the People’s
Republic of China: Final Affirmative Countervailing
Duty Determination, 74 FR 37012 (July 27, 2009),
and accompanying Issues and Decision
Memorandum (‘‘Kitchen Racks Decision
Memorandum’’) at 5. Consistent with Aluminum
Extrusions from the PRC, we determine it
appropriate to now include newly alleged and selfreported programs in the AFA calculation for noncooperative respondents, including non-cooperative
Q&V companies. See Aluminum Extrusions from
the PRC Decision Memorandum at Comment 8. We
find that this approach prevents non-cooperative
respondents from successfully avoiding being
associated with newly alleged subsidy programs
and subsidies discovered during the course of the
investigation or review.
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proceeding, we applied the highest
calculated subsidy rate for any program
otherwise listed from any prior PRC
CVD cases, so long as the noncooperating companies conceivably
could have used the program for which
the rate was calculated. See Aluminum
Extrusions from the PRC Decision
Memorandum at ‘‘Application of
Adverse Inferences: Non-Cooperative
Companies’’ section; see also
Lightweight Thermal Paper From the
People’s Republic of China: Final
Affirmative Countervailing Duty
Determination, 73 FR 57323 (October 2,
2008), and accompanying Issues and
Decision Memorandum at ‘‘Selection of
the Adverse Facts Available Rate’’
section. On this basis, we preliminarily
determine the AFA subsidy rate for Asia
Pacific CIS and Jiangsu Weixi to be
239.33 percent ad valorem.
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 SAA at 870.
The Department considers information
to be corroborated if it has probative
value. 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. Id. at 869.
With regard to the reliability aspect of
corroboration, we note that the rates
were calculated in this review or in
recent final CVD determinations.
Further, the calculated rates were based
upon information about the same or
similar programs. Moreover, no
information has been presented 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
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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,
6814 (February 22, 1996).
In the absence of record evidence
concerning these programs due to the
non-cooperative Q&V companies’
decision not to participate in the review,
we have 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, we have selected the highest
calculated subsidy rate for any PRC
program from which the noncooperative Q&V companies could
receive a benefit to use as AFA. The
relevance of these rates is that they are
actual calculated CVD rates for a PRC
program from which the noncooperative Q&V companies could
actually receive a benefit. Further, these
rates were calculated for periods close
to the POR in the instant case.
Moreover, the failure of these
companies to respond to requests for
information has ‘‘resulted in an
egregious lack of evidence on the record
to suggest an alternative rate.’’ 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 non-cooperative
Q&V companies and the resulting lack
of record information concerning their
use of programs under review, the
Department has corroborated the rates it
selected to the extent practicable.
For a detailed discussion of the AFA
rates selected for each program under
review, see Memorandum to the File
from Jennifer Meek and Alexander
Montoro, regarding ‘‘Application of
Adverse Facts Available Rates for
Preliminary Results’’ (September 30,
2011).
2. GOC—Wire Rod
The Department sought information
from the GOC about the producers of the
wire rod purchased by Wireking and
NKS. In particular, for any of the wire
rod producers that are not majorityowned by the GOC, the GOC was asked,
inter alia, to trace back the ownership
to the ultimate individual or state
owners. See the Department’s January
28, 2011 questionnaire at Section II/
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Appendix 3. The GOC provided
information indicating that several wire
rod producers were owned in whole or
in part by other companies, but failed to
provide the ownership of those other
companies. For one wire rod producer,
the GOC failed to provide any
ownership information.
We preliminarily determine that the
GOC has withheld necessary
information that was requested of it and,
thus, that the Department may rely on
‘‘facts available’’ in making our
preliminary determination. See sections
776(a)(1) and (a)(2)(A) of the Act.
Moreover, we preliminarily determine
that the GOC has failed to cooperate by
not acting to the best of its ability to
comply with our request for
information. Consequently, an adverse
inference is warranted in the
application of facts available. See
section 776(b) of the Act. We are
applying the adverse inference that the
producers of wire rod used by Wireking
and NKS are government authorities
that provided a financial contribution as
described under section 771(5)(D)(iv) of
the Act.
Subsidies Valuation Information
Allocation Period
The average useful life period in this
proceeding, as described in 19 CFR
351.524(d)(2), is 12 years according to
the U.S. Internal Revenue Service’s 1977
Class Life Asset Depreciation Range
System, as revised. See U.S. Internal
Revenue Service Publication 946 (2008),
How to Depreciate Property, at Table B–
2: Table of Class Lives and Recovery
Periods. No party in this proceeding has
disputed this allocation period.
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)–(v)
directs that the Department will
attribute subsidies received by certain
other companies to the combined sales
of the recipient and other companies if:
(1) Cross-ownership exists between the
companies; and (2) the cross-owned
companies produce the subject
merchandise, are a holding or parent
company of the subject company,
produce an input that is primarily
dedicated to the production of the
downstream product, or transfer a
subsidy to a cross-owned company.
According to 19 CFR
351.525(b)(6)(vi), cross-ownership exists
between two or more corporations
where one corporation can use or direct
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the individual assets of the other
corporation(s) in essentially the same
ways it can use its own assets. This
section of the Department’s regulations
states that this standard will normally
be met where there is a majority voting
ownership interest between two
corporations or through common
ownership of two (or more)
corporations. The Preamble to the
Department’s regulations further
clarifies the Department’s crossownership standard. According to the
Preamble, relationships captured by the
cross-ownership definition include
those where
the interests of two corporations have merged
to such a degree that one corporation can use
or direct the individual assets (or subsidy
benefits) of the other corporation in
essentially the same way it can use its own
assets (or subsidy benefits) * * * Crossownership does not require one corporation
to own 100 percent of the other corporation.
Normally, cross-ownership will exist where
there is a majority voting ownership interest
between two corporations or through
common ownership of two (or more)
corporations. In 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).
Thus, the Department’s regulations
make clear that the agency must look at
the facts presented in each case in
determining whether cross-ownership
exists.
The U.S. Court of International Trade
(‘‘CIT’’) has 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, SA v. United States,
166 F. Supp. 2d 593, 600–604 (CIT
2001).
Wireking stated that it is a wholly
foreign-owned company, with its parent
companies located outside of the PRC.
Wireking also responded that it has no
affiliates that are cross-owned within
the meaning of 19 CFR 351.525(b)(6).
See WQR at 4–5. Therefore, we are
limiting our analysis to Wireking.
NKS also stated that it is wholly
owned by entities located outside of the
PRC. NKS identified several affiliated
companies and reported that none of
them are located in the PRC. See NQR
at 3–5. Therefore, we are limiting our
analysis to NKS.
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preliminarily determine that NKS
received a countervailable subsidy of
1.00 percent ad valorem under this
program.
I. Programs Preliminarily Determined
To Be Countervailable
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Analysis of Programs
Based upon our analysis and the
responses to our questionnaires, we
determine the following:
B. Income Tax Reduction for FIEs Based
on Geographic Location
To promote economic development
and attract foreign investment,
‘‘productive’’ FIEs located in coastal
economic zones, special economic
zones or economic and technical
development zones in the PRC were
subject to preferential tax rates of 15
percent or 24 percent, depending on the
zone. See GQR at 5. This program was
created on June 15, 1988, pursuant to
the Provisional Rules on Exemption and
Reduction of Corporate Income Tax and
Business Tax of FIEs in Coastal
Economic Development Zone issued by
the Ministry of Finance, and continued
under Article 7 of the FIE Tax Law on
July 1, 1991. See GQR at Exhibit 3.
As a result of the transition provisions
of the new Enterprise Income Tax Law,
which came into force on January 1,
2008, enterprises that were eligible for
the reduced rates of 15 percent or 24
percent are to be gradually transitioned
to the uniform rate of 25 percent over
a five-year period. See GQR at 6 and
Exhibit 2.
In the underlying investigation, we
determined that this program conferred
a countervailable benefit. See Kitchen
Racks Decision Memorandum at 11–12.
No interested party provided new
evidence that would lead us to
reconsider our earlier finding. See, e.g.,
Live Swine from Canada; Final Results
of Countervailing Duty Administrative
Reviews, 61 FR 52408, 52420 (October 7,
1996) (‘‘{I}t is the Department’s policy
not to re-examine the issue of that
program’s countervailability in
subsequent reviews unless new
information or evidence of changed
circumstances is submitted which
warrants reconsideration.’’). Therefore,
we continue to find that these tax
benefits confer a countervailable
subsidy.
NKS reported paying a reduced
income tax rate during the POR under
the program. See NQR at 10–11.
To calculate the benefit, we treated
the income tax savings received by NKS
as a recurring benefit, consistent with 19
CFR 351.524(c)(1). To compute the
amount of the tax savings, we compared
the income tax NKS would have paid in
the absence of the program (i.e., at the
25 percent rate) with the income tax that
NKS actually paid during the 2009 (i.e.,
at the reduced rate).
We divided the benefits received by
NKS in 2009 by its 2009 total sales, in
accordance with 19 CFR
351.525(b)(6)(i). On this basis, we
preliminarily determine that NKS
received a countervailable subsidy of
0.77 percent ad valorem under this
program.
C. Exemption From City Maintenance
and Construction Taxes and Education
Fee Surcharges for FIEs in Guangdong
Province
Pursuant to the Circular on
Temporarily Not Collecting City
Maintenance and Construction Tax and
Education Fee Surcharge for FIEs and
Foreign Enterprises (GUOSHUIFA
{1994} No. 38), the local tax authorities
exempt all FIEs and foreign enterprises
from the city maintenance and
construction tax and the education fee
surcharge. See GQR at 10 at Exhibit 6
and KASR Decision Memorandum at 7.
In the underlying investigation, we
determined that this program conferred
a countervailable benefit, where this
program was referred to as ‘‘Exemption
from City Construction Tax and
Education Tax for FIEs in Guangdong
Province.’’ See Kitchen Racks Decision
Memorandum at 13. No interested party
provided new evidence that would lead
us to reconsider our earlier finding.
Therefore, we continue to find that
these tax exemptions confer a
countervailable subsidy.
Both NKS and Wireking stated they
have never paid the City Maintenance
and Construction Taxes or Education
Fee Surcharges. See WQR at 10 and
NKS at 11. These taxes are calculated as
a percentage of the value added tax
(‘‘VAT’’) and business and consumption
taxes paid by enterprises. Wireking
reported the amount it would have paid
during the POR had it been subject to
the City Maintenance and Construction
Taxes or Education Fee Surcharges. See
WSQR1 at 5. NKS states it did not pay
any VAT, business or consumption tax
and therefore, would not have paid this
tax even if had not been exempted
under this program. See NKSQR3 at 1.
To calculate the benefit, we treated
Wireking’s tax savings as a recurring
benefit, consistent with 19 CFR
351.524(c)(1), and divided the
company’s savings received during 2009
by the company’s total 2009 sales. To
compute the amount of the city
maintenance and construction tax
savings, we compared what Wireking
would have paid in the absence of the
program (seven percent of the total of
VAT, business tax, and consumption tax
paid during 2009) with what it paid
(zero). To calculate the amount of the
savings from the educational fee
surcharge exemption, we compared
what Wireking would have paid in the
absence of the program (three percent of
A. Two Free, Three Half Program
Under Article 8 of the FIE Tax Law,
a foreign-invested enterprise (‘‘FIE’’)
that is ‘‘productive’’ and is scheduled to
operate for more than ten years may be
exempted from income tax in the first
two years of profitability and pay
income taxes at half the standard rate
for the subsequent three years. See GQR
at 23. The GOC claims that the ‘‘Two
Free, Three Half’’ program was
terminated effective January 1, 2008, by
the Enterprise Income Tax Law but
companies already enjoying the
preference were permitted to continue.
See GQR at 23–24 and Exhibits 1, 3 and
4.
The Department has previously found
this program countervailable. See CFS
Decision Memorandum at 11–12; see
also Certain Seamless Carbon and Alloy
Steel Standard, Line, and Pressure Pipe
from the People’s Republic of China:
Final Affirmative Countervailing Duty
Determination, Final Affirmative
Critical Circumstances Determination,
75 FR 57444 (September 21, 2010), and
accompanying Issues and Decision
Memorandum at 25.
NKS reported that it used this
program during 2009. See NQR at 12.
We preliminarily determine that the
exemption or reduction of the 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 forgone by the GOC, and it
provides a benefit to the recipient 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, i.e.,
‘‘productive’’ FIEs and, hence, is
specific under section 771(5A)(D)(i) of
the Act.
To calculate the benefit, we treated
the income tax savings received by NKS
as a recurring benefit, consistent with 19
CFR 351.524(c)(1). To compute the
amount of the tax savings, we compared
the income tax that NKS would have
paid in the absence of the program with
the income tax that NKS actually paid
during 2009.
We divided the benefits received in
2009 by NKS’s 2009 total sales, in
accordance with 19 CFR
351.525(b)(6)(i). On this basis, we
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total of VAT, business tax, and
consumption tax paid during 2009) with
what it paid (zero). Id. On this basis, we
preliminarily determine the
countervailable subsidy to be 0.54
percent ad valorem for Wireking.
D. Shunde Famous Brands
According to the GOC, this program
was established in June 2003 and was
terminated in December 2008. The
purpose of this program was to increase
the popularity and competitiveness of
the product brands and, to be eligible
for awards, an enterprise must have
been designated as a ‘‘Famous
Trademark of China,’’ ‘‘Chinese Famous
Product,’’ ‘‘Famous Trademark of
Guangdong province,’’ or ‘‘Guangdong
Famous Product.’’ See GSQR1 at 12–13
and Exhibit 4. The GOC stated that the
government authority responsible for
administering this program was the
Shunde Economic and Trade Bureau
(currently known as Shunde Economic
Promotion Bureau). Id.; see also GSQR2
at Exhibit 1.
Wireking was approved for a grant
under this program in 2008 and
received these funds in 2009. See
GSQR2 at Exhibit 1 and WQR at 13.
We preliminarily determine that
Wireking received a countervailable
subsidy during the POR under this
program. We find the grant to be a direct
transfer of funds within the meaning of
section 771(5)(D)(i) of the Act, providing
a benefit in the amount of the grant. See
19 CFR 351.504(a). Based on
information provided on the record, we
further preliminarily determine that
grants under this program are de facto
specific based on the limited number of
users. See section 771(5A)(D)(iii)(I) of
the Act. See also GSQR2 at Exhibit 1.
To calculate the countervailable
subsidy, we used our standard
methodology for non-recurring grants.
See 19 CFR 351.524(b). As Wireking was
approved for the funds in 2008 and
received payment in 2009, we first
applied the ‘‘0.5 percent test,’’ pursuant
to 19 CFR 351.524(b)(2) using
Wireking’s 2008 total sales. The grant
amount was less than 0.5 percent of
Wireking’s 2008 total sales. Thus, in
accordance with 19 CFR 351.524(b)(2),
we expensed the entire amount of the
grant and attributed the benefit to
Wireking’s total sales in the year of
receipt (i.e., 2009). On this basis, we
preliminarily find a countervailable
subsidy of 0.10 percent ad valorem for
Wireking.
E. International Market Exploration
Fund
The GOC confirmed that the
International Market Exploration Fund
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program under which Wireking received
assistance in 2009 is the same program
as the ‘‘International Market
Development Fund Grants for Small and
Medium Sized Enterprises’’ program
(also known as ‘‘SME Fund’’, ‘‘Medium
& Small Size Enterprise International
Market Expansion Assistance’’ program
or ‘‘International Exhibition Show
Assistance’’ program) previously
investigated by the Department and
found countervailable; inter alia, in
Aluminum Extrusions from the PRC.
See the Department’s August 12, 2011,
GOC second supplemental
questionnaire at Attachment 1 and
GSQR2 at 2.
Wireking reported receiving funds
under this program in 2009. See WQR
at 13.
We preliminarily determine that
Wireking received a countervailable
subsidy during the POR under this
program. We find the grant to be a direct
transfer of funds within the meaning of
section 771(5)(D)(i) of the Act, providing
a benefit in the amount of the grant. See
19 CFR 351.504(a). Further, we find the
grant to be specific under section
771(5A)(B) of the Act because receipt of
the grant is contingent upon export
performance.
To calculate the countervailable
subsidy, we used our standard
methodology for non-recurring grants.
See 19 CFR 351.524(b). Treating the year
of receipt as the year of approval, we
applied the ‘‘0.5 percent test,’’ pursuant
to 19 CFR 351.524(b)(2). The 2009 grant
amount was less than 0.5 percent of
Wireking’s 2009 export sales. Thus, in
accordance with 19 CFR 351.524(b)(2),
we expensed the entire amount of the
grant to 2009 and attributed the benefit
to Wireking’s 2009 export sales. On this
basis, we preliminarily find a
countervailable subsidy of 0.02 percent
ad valorem for Wireking.
F. Foshan Shunde Export Rebate
Wireking reported that it received a
grant but was unable to identify the
program under which it was given. See
WSQR1 at 4. Wireking claims the only
information it has regarding this grant is
what is listed on the receipt from a local
finance bureau. See WSQR2 at 2–3.
Wireking also states it has been unable
to gather more information from the
local finance bureau that distributed the
funds. Based on the information it has,
Wireking believes the grant was related
to exports. We will continue to gather
information regarding this program for
the final results.
Based on the translated information
provided by Wireking regarding the
receipt of this grant, we preliminarily
find that the grant under this program
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conferred a countervailable subsidy. We
find the grant to be a direct transfer of
funds within the meaning of section
771(5)(D)(i) of the Act, providing a
benefit in the amount of the grant. See
19 CFR 351.504(a). Further, we find the
grant to be specific under section
771(5A)(B) of the Act because receipt of
the grant is contingent upon export
performance.
To calculate the countervailable
subsidy, we used our standard
methodology for non-recurring grants.
See 19 CFR 351.524(b). As the approval
date is unknown, we are treating the
year of receipt, 2009, as the year of
approval as facts available under section
776(a)(1) of the Act. We applied the ‘‘0.5
percent test,’’ pursuant to 19 CFR
351.524(b)(2). The grant amount was
less than 0.5 percent of Wireking’s 2009
export sales. Thus, in accordance with
19 CFR 351.524(b)(2), we expensed the
entire amount of the grant to 2009 and
attributed the benefit to Wireking’s 2009
export sales. On this basis, we
preliminarily determine the
countervailable subsidy attributable to
Wireking to be 0.06 percent ad valorem
under this program.
G. Zhuhai Export Trade Grant
According to the GOC, the Zhuhai
Export Trade Grant program was
established pursuant to ZWJM (2009)
No. 28 and came into effect in
November 2008. The purpose of the
program is to maintain the stable
development of international trade. See
GSQR1 at 39–44 and Exhibit 9. The
GOC stated that the government
authorities responsible for approving
and administering the program are the
Zhuhai Foreign Economic and Trade
Corporation Bureau and the Zhuhai
Finance Department. See GSQR1 at 39
and Exhibit SGQ–9. To be eligible for
assistance under this program, a
company must be registered in the
Department of Industry and Commerce
of Zhuhai City, must not have
committed a significant unlawful act or
behaved illegally in the last two years,
must have exported at least USD 1
million in 2008 and 2009, and must
have increased its exports in 2009 over
2008. See GSQR1 at 43.
NKS reported that it received a grant
under this program during 2009. See
NSQR1a at 3.
We preliminarily determine that NKS
received a countervailable subsidy
during the POR under this program. We
find the grant to be a direct transfer of
funds within the meaning of section
771(5)(D)(i) of the Act, providing a
benefit in the amount of the grant. See
19 CFR 351.504(a). Further, we find the
grant to be specific under section
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771(5A)(B) of the Act, because receipt of
the grant is contingent upon export
performance.
To calculate the countervailable
subsidy, we used our standard
methodology for non-recurring grants.
See 19 CFR 351.524(b). As NKS was
approved for the funds in 2009, we
applied the ‘‘0.5 percent test,’’ pursuant
to 19 CFR 351.524(b)(2) using NKS’s
2009 total export sales. The 2009 grant
amount was less than 0.5 percent of
NKS’s 2009 total export sales. Thus, in
accordance with 19 CFR 351.524(b)(2),
we expensed the entire amount of the
grant to 2009. In accordance with 19
CFR 351.525(b)(2), we attributed the
benefit to NKS’s 2009 total export sales.
On this basis, we preliminarily find a
countervailable subsidy of 0.02 percent
ad valorem for NKS.
H. Guangdong Supporting Fund
According the GOC, the Guangdong
Supporting Fund program was
established in 2009 with the purpose of
helping enterprises affected by the
economic crisis and maintaining
employment. The GOC stated that the
government authorities responsible for
administering the program are the
Guangdong Labor and Social Security
Department, the Guangdong Financial
Department and the local tax bureau.
See GSQR1 at Exhibit 11. The Zhuhai
Human Resource and Social Security
Bureau is responsible for disbursing
payments from the fund. See GSQR1 at
45. To be eligible, a company should be
among the industries affected heavily by
the financial crisis or the company must
be in difficult position. See GSQR1 at
47. The GOC provided Yuelaoshefa
(2009) No. 6, which defines ‘‘enterprises
in difficulty’’ as enterprises in the
‘‘Clothing, textile, toys, printing,
packing, electronics, house appliance,
hardware and plastics, and furniture
business which have been significantly
influenced by the international financial
crisis * * * and have passed the
identification of enterprises in
difficulty.’’ See GSQR1 at Exhibit 11.
NKS reported that it received a benefit
during 2009. See NSQR1a at 3.
According to the GOC, NKS received
funding from the ‘‘enterprise in a
difficult position fund.’’ See GSQR2 at
3.
We preliminarily determine that NKS
received a countervailable subsidy
during the POR under this program. We
find the grant to be a direct transfer of
funds within the meaning of section
771(5)(D)(i) of the Act, providing a
benefit in the amount of the grant. See
19 CFR 351.504(a). We further
determine preliminarily that grants
under this program are limited to
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specific industries (i.e., enterprises in
difficulty such as clothing, textile, toys,
printing, packing, electronics, house
appliance, hardware and plastics, and
furniture business). Hence, the grants
are de jure specific under section
771(5A)(D)(i) of the Act.
To calculate the countervailable
subsidy, we used our standard
methodology for non-recurring grants.
See 19 CFR 351.524(b). We applied the
‘‘0.5 percent test,’’ pursuant to 19 CFR
351.524(b)(2) using NKS’s 2009 total
sales. The 2009 grant amount was less
than 0.5 percent of NKS’s 2009 total
sales. Thus, in accordance with 19 CFR
351.524(b)(2), we expensed the entire
amount of the grant to 2009 and
attributed the benefit to NKS’s 2009
total sales. On this basis, we
preliminarily find a countervailable
subsidy of 0.06 percent ad valorem for
NKS.
I. Provision of Wire Rod for Less Than
Adequate Remuneration (‘‘LTAR’’)
In the underlying investigation, we
determined that this program conferred
a countervailable subsidy. See Kitchen
Racks Decision Memorandum at 14–16.
No interested party provided new
evidence that would lead us to
reconsider our earlier findings that the
GOC’s predominant role in the PRC’s
wire rod market renders domestic prices
unusable as benchmarks or that the
subsidy conferred is specific. See
Kitchen Racks Decision Memorandum
at 15–16. Therefore, our analysis focuses
on whether the producers of the wire
rod used by Wireking and NKS during
the POR were authorities within the
meaning of section 771(5)(B) of the Act
and the extent of the benefit provided.
As discussed in the ‘‘Use of Facts
Otherwise Available and Adverse
Inferences’’ section, above, we
preliminarily determine that the wire
rod producers for whom the GOC did
not provide complete ownership
information are authorities. For one
wire rod producer, the ownership
information submitted by the GOC
indicates majority state ownership. In
tires from the PRC, the Department
determined that majority government
ownership of an input producer is
sufficient to qualify it as an ‘‘authority.’’
See Certain New Pneumatic Off-theRoad 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 accompanying Issues and
Decision Memorandum at 10. Thus, we
preliminarily determine this supplier is
an authority. For the final wire rod
producer, which is owned by
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individuals, the GOC has submitted
incomplete information. Consistent with
section 782(d) of the Act, we intend to
seek further information. See ‘‘Programs
for Which More Information is
Required’’ section of this notice, below.
For these preliminary results, however,
as we are still gathering information on
this wire rod producer, we are not
including purchases of wire rod
produced by this company in the
calculation. Based on our findings that
certain wire rod producers are
authorities, we preliminarily determine
that the GOC is providing a good and,
hence, a financial contribution under
section 771(5)(D)(iii) of the Act.
To determine whether this financial
contribution results in a subsidy to the
Kitchen Racks producers, we followed
19 CFR 351.511(a)(2) for identifying an
appropriate market-based benchmark for
measuring the adequacy of the
remuneration for the wire rod. As in the
underlying investigation, we have relied
upon tier two benchmarks, i.e., world
market prices available to purchasers in
the PRC, to determine the existence and
extent of the benefit to Wireking and
NKS. See Kitchen Racks Decision
Memorandum at 8. Petitioners
submitted U.S. domestic prices for wire
rod, but we have not included these in
our benchmark because they do not
represent world market prices available
to purchasers in the PRC. Instead, we
have used the Steel Business Briefing
export prices for wire from Turkey,
Black Sea, and Latin America which
were submitted by Wireking. See
Wireking’s Comments on
Benchmarking, June 15, 2011, and
Memorandum to the File, regarding
‘‘Wire Rod Benchmark Prices’’
(September 30, 2011). This is consistent
with the Department’s use of data from
industry publications such as the Steel
Business Briefing in other recent CVD
proceedings involving the PRC. See,
e.g., Wire Decking From the People’s
Republic of China: Final Affirmative
Countervailing Duty Determination, 75
FR 32902 (June 10, 2010), and
accompanying Issues and Decision
Memorandum at ‘‘Provision of HRS
Steel for LTAR’’ section.
Under 19 CFR 351.511(a)(2)(iv), when
measuring the adequacy of
remuneration under tier one or tier two,
the Department will adjust the
benchmark price to reflect the price that
a firm actually paid or would pay if it
imported the product, including
delivery charges and import duties.
Regarding delivery charges, we have
included the freight charges that would
be incurred to deliver wire rod to the
respondents’ plants. We have also
added import duties, as reported by the
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GOC, and VAT applicable to imports of
wire rod into the PRC. We have
compared these prices to the
respondents’ actual purchase prices,
including any taxes and delivery
charges incurred to deliver the product
to their plants.
Comparing the adjusted benchmark
prices to the prices paid by the
respondents for the wire rod they
purchased, we preliminarily determine
that the GOC provided wire rod for
LTAR, and that a benefit exists in the
amount of the difference between the
benchmark and what the respondents
paid. See 19 CFR 351.511(a). We
divided the difference between the
amounts actually paid by Wireking and
NKS for wire rod and what they would
have paid under the benchmark in 2009,
by the two companies’ respective total
sales in 2009. On this basis, we
preliminarily determine the
countervailable subsidy to be .82
percent and 0.46 percent ad valorem for
Wireking and NKS, respectively.
J. Provision of Electricity for LTAR
In the underlying investigation, we
determined that this program conferred
a countervailable benefit. See Kitchen
Racks Decision Memorandum at 5–6
and 13. No interested party provided
new evidence that would lead us to
reconsider our earlier finding that there
is a financial contribution that is
specific. Therefore, our analysis is
focused on whether a benefit was
conferred during the POR.
Both Wireking and NKS purchased
electricity and provided monthly usage
and payment data. See NQR at 12,
NSQR1a at 8, NSQR2 at 3; WQR at 11,
WSQR1 at 6, WSQR2 at 6.
To determine the existence and
amount of any benefit from this
program, we selected the highest
electricity rates that were in effect
during the POR, consistent with our
approach in the investigation. The GOC
provided electricity rate schedules for
2009, including the new rates based on
the price adjustment that occurred in
November 2009. See GQR at 23 and
Exhibit GQ8–9. Based on these rate
schedules, we have constructed
benchmark peak, normal, and valley
rates for the ‘‘large industrial’’ user
category, including the highest
provincial rate for the base rate.
Consistent with our approach in drill
pipe from the PRC we first calculated
the variable electricity costs of NKS and
Wireking by multiplying the monthly
kilowatt hours (‘‘KWH’’) consumed at
each price category (peak, normal, and
valley) by the corresponding electricity
rates they paid. See Drill Pipe From the
People’s Republic of China; Final
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Affirmative Countervailing Duty
Determination, Final Affirmative
Critical Circumstances Determination,
76 FR 1971 (January 11, 2011), and
accompanying Issues and Decision
Memorandum at ‘‘Provision of
Electricity for LTAR’’ section. Next, we
calculated the benchmark variable
electricity cost by multiplying the
monthly KWH consumed at each price
category (peak, normal, and valley) by
the highest electricity rate charged for
each price category. To calculate the
benefit for each month, we subtracted
the variable electricity charge paid by
each respondent during the POR from
the monthly benchmark variable
electricity cost.
To measure whether the respondents
received a benefit with regard to their
transmitter capacity charge (a.k.a., base
charge), we first multiplied the monthly
transmitter capacity charged to the
companies by the corresponding
consumption quantity, where
appropriate. Next, we calculated the
benchmark transmitter capacity cost by
multiplying companies’ consumption
quantities by the highest transmitter
capacity rate reflected in the electricity
rate benchmark chart. To calculate the
benefit, we subtracted the transmitter
costs paid by the companies during the
POR from the benchmark transmitter
costs.
We then calculated the total benefit
received during the POR under this
program by summing the benefits
stemming from the respondents’
variable electricity payments and
transmitter capacity payments.
We divided the benefit by the
respondents’ total sales in POR. On this
basis, we preliminarily determine net
countervailable subsidy rates of 0.62
percent ad valorem for Wireking and
0.58 percent ad valorem for NKS.
II. Programs Preliminarily Determined
Not To Confer a Measurable Benefit
During the POR
A. Shunde Patent Application
According to the GOC, this program
was established in January 2001 and is
intended to encourage investors in the
Shunde district, and to promote the
development of the economy and
technology. The GOC has reported that
any enterprise or public institution,
government organ, public organization,
or individual, that resides in this district
and applies for a domestic patent for an
invention, utility model patent, or
invention authorization, can receive this
reward. See GSQR1 at 26.
Shunde Science and Technology
Bureau (currently the Shunde Economic
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62371
Promotion Bureau) administers the
program. See id. at 25 and Exhibit 7.
Wireking applied for and received a
grant under this program in 2009. See
WQR at 11.
Based on our analysis, any potential
benefit to Wireking under this program
is less than 0.005 percent ad valorem.
To determine this, we divided the
amount received by Wireking in 2009 by
Wireking’s total sales in 2009. Where
the countervailable subsidy rate for a
program is less than 0.005 percent, the
Department’s practice is to not include
that program in the total CVD rate. See,
e.g., CFS Decision Memorandum at
‘‘Analysis of Programs, Programs
Determined Not To Have Been Used or
Not To Have Provided Benefits During
the POR for GE’’ section. Thus, without
prejudice to the question of whether this
program confers a countervailable
subsidy, and consistent with our
practice, we determine that any
potential benefit under this program is
not measurable. See CFS Decision
Memorandum at 15.
We examined the following programs
and preliminarily determine that the
producers and/or exporters of the
subject merchandise under review did
not apply for or receive benefits under
these programs during the POR:
III. Programs Found To Be Not Used or
That Provided No Benefit During the
POR
1. Income Tax Refund for
Reinvestment of Profits in ExportOriented Enterprises.
2. Income Tax Reduction for ExportOriented FIEs.
3. Local Income Tax Exemption or
Reduction Program for ‘‘Productive’’
FIEs.
4. Preferential Tax Subsidies for
Research and Development by FIEs.
5. Income Tax Credits on Purchases of
Domestically-Produced Equipment by
FIEs.
6. Income Tax Credits for Purchases of
Domestically-Produced Equipment by
Domestically-Owned Companies.
7. Reduction in or Exemption from
Fixed Assets Investment Orientation
Regulatory Tax.
8. VAT Rebates for FIEs Purchasing
Domestically-Produced Equipment.
9. Import Tariff and VAT Exemptions
for FIEs and Certain Domestic
Enterprises Using Imported Equipment
in Encouraged Industries.
10. Import Tariff Exemptions for the
‘‘Encouragement of Investment by
Taiwanese Compatriots’’.
11. Provision of Nickel for LTAR by
the GOC.
12. Government Provision of Water at
LTAR to Companies Located in
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Development Zones in Guangdong
Province.
13. Exemption from Land
Development Fees for Enterprises
Located in Industrial Cluster Zones.
14. Reduction in Farmland
Development Fees for Enterprises
Located in Industrial Zones.
15. Special Subsidy from the
Technology Development Fund to
Encourage Technology Development.
16. Exemption from District and
Township Level Highway Construction
Fees for Enterprises Located in
Industrial Cluster Zones.
17. Exemptions from or Reductions in
Educational Supplementary Fees and
Embankment Defense Fees for
Enterprises Located in Industrial Cluster
Zones.
18. Exemption from Real Estate Tax
and Dike Maintaining Fee for FIEs in
Guangdong Province.
19. Import Tariff Refunds and
Exemptions for FIEs in Guangdong
Province.
20. Preferential Loans and Interest
Rate Subsidies in Guangdong Province.
21. Direct Grants in Guangdong
Province.
22. Funds for ‘‘Outward Expansion’’
of Industries in Guangdong Province.
23. Land-related Subsidies to
Companies Located in Specific Regions
of Guangdong Province.
24. Import Tariff and VAT Refunds
and Exemptions for FIEs in Zhejiang.
25. Grants to Promote Exports from
Zhejiang Province.
26. Land-related Subsidies to
Companies Located in Specific Regions
of Zhejiang.
27. Special Subsidy from the
Technology Development Fund to
Encourage Technology Innovation.
28. Subsidies to Encourage
Enterprises in Industrial Cluster Zones
to Hire Post-Doctoral Workers.
29. Land Purchase Grant Subsidy to
Enterprises Located in Industrial Cluster
Zones and Encouraged Enterprises.
30. Exemption from Accommodating
Facilities Fees for High-Tech and LargeScale FIEs.
31. Income Tax Deduction for
Technology Development Expenses of
FIEs.
32. Preferential Land-Use Charges for
Newly-Established, Industrial Projects
in Zhongshan’s Industrial Zones.
33. Reduction of Land Price at the
Township Level for Newly-Established,
Industrial Projects in Zhongshan’s
Industrial Zones.
34. Reduction in Urban Infrastructure
Fee for Industrial Enterprises in
Industrial Zones.
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Jkt 226001
35. Income Tax Rebate for ‘‘Superior
Industrial Enterprises’’ in Zhongshan.
36. Accelerated Depreciation for New
Technological Transformation Projects
‘‘Superior Industrial Enterprises’’ in
Zhongshan.
37. Exemption from the Tax on
Investments in Fixed Assets for
‘‘Superior Industrial Enterprises’’ in
Zhongshan.
IV. Programs for Which More
Information Is Required
A. Provision of Steel Strip for LTAR
The GOC has provided certain
information requested by the
Department regarding this newly alleged
subsidy. In particular, the GOC has
identified the producers of steel strip
used by Wireking and NKS as stateowned and has provided more general
information regarding the hot-rolled
steel industry in the PRC. However,
information on the record shows that
NKS used cold-rolled strip and that
Wireking may have used cold-rolled
strip. See NNSAQR at Exhibit 2, WSQR3
at Exhibit 3, and Petitioners’ submission
regarding benchmarks for the NSA (July
26, 2011). Wireking did not distinguish
its purchases of hot- and cold-rolled
strip. See WSQR3 at Exhibit 3. To date,
the GOC has not provided information
about the cold-rolled steel industry in
the PRC or about the specificity of any
possible subsidy arising from the
provision of cold-rolled strip for LTAR.
Consistent with section 782(d) of the
Act, we intend to seek further
information on these issues. Also, we
intend to ask Wireking to distinguish its
purchases of hot- and cold-rolled strip.
B. Provision of Wire Rod for LTAR
As discussed above in the ‘‘I.I.
Provision of Wire Rod for LTAR’’
section, the information submitted by
the GOC regarding one wire rod
producer is incomplete. Therefore, we
intend to seek further information. In
particular, we intend to ask the GOC to
provide complete translations of the
information submitted in its most recent
supplemental response, to confirm and
establish the completeness of that
information, to establish the reliability
of the information already provided to
gather information on whether the
owners are officials of a village
committee or other village-level
government entity and to seek
information regarding the individual
owners status as Communist Party of
China (‘‘CCP’’) officials directly from the
CCP or, alternatively, why the GOC
cannot obtain or request this
information from the CCP.
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C. Zhuhai Farmer Training Subsidy
According the GOC, the Zhuhai
Farmer Training Subsidy program was
established in 2007 to promote the
hiring and training of migrant rural
workers. The GOC identified the
municipal or district labor and social
security department as the
administrators of the program. See
GSQR1 at 32 and Exhibit SGQ–8. To
receive benefits an enterprise must
employ more than fifty migrant rural
workers from other provinces, have no
arrears in the payment of wages, must
sign employment contracts with migrant
rural workers for more than one year,
and have the necessary training place
and equipment. See GSQR1 at 32–37.
The GOC’s response requires
clarification with regard to the
information provided on whether this
program is administered specific.
Consistent with section 782(d) of the
Act, we intend to seek further
information on this issue.
Preliminary Results of Review
In accordance with 19 CFR
351.221(b)(4)(i), we calculated
individual subsidy rates for the
mandatory respondents, Wireking and
NKS.
For the non-selected respondents
which responded to our requests for
Q&V information (i.e., Leader Metal,
Dunli, and Hengtong), we have followed
the Department’s practice, which is to
base the margin on an average of the
margins calculated for those companies
selected for individual review,
excluding de minimis rates or rates
based entirely on AFA. See, e.g., Certain
Pasta From Italy: Preliminary Results of
the 13th (2008) Countervailing Duty
Administrative Review, 75 FR 18806,
18811 (April 13, 2010), unchanged in
Certain Pasta from Italy: Final Results of
the 13th (2008) Countervailing Duty
Administrative Review, 75 FR 37386
(June 29, 2010). Therefore, we have
preliminarily assigned to Leader Metal,
Hangzhou Dunli, and Hengtong the
simple average of the rates calculated
for Wireking and NKS. We have used a
simple average rather than a weighted
average because weight averaging the
rates of the mandatory respondents risks
disclosure of proprietary information.
For the non-selected respondents
which did not respond to our requests
for Q&V information (i.e., Jiangsu Weixi
and Asia Pacific CIS), we are applying
an AFA rate, as described above.
We preliminarily find the net subsidy
rate for the producers/exporters under
review to be as follows:
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Federal Register / Vol. 76, No. 195 / Friday, October 7, 2011 / Notices
Net subsidy rate
(percent)
Producer/Exporter
Guangdong Wireking Housewares & Hardware Co., Ltd ...........................................................................................................
New King Shan (Zhu Hai) Co., Ltd .............................................................................................................................................
Leader Metal Industry Co., Ltd. (aka Marmon Retail Services Asia) .........................................................................................
Hangzhou Dunli Import and Export Co., Ltd/Hangzhou Dunli Industry Co., Ltd ........................................................................
Hengtong Hardware Manufacturing (Huizhou) Co., Ltd ..............................................................................................................
Jiangsu Weixi Group Co. .............................................................................................................................................................
Asia Pacific CIS (Wuxi) Co., Ltd .................................................................................................................................................
Assessment Rates
If these preliminary results are
adopted in our final results of this
review, the Department intends to issue
appropriate assessment instructions (as
described below) directly to CBP 15
days after publication of the final results
of this review.
Oven Racks
For certain oven racks from the PRC
entered, or withdrawn from warehouse
for consumption from September 9,
2009, through December 31, 2009, the
Department will instruct CBP to assess
countervailing duties at the rates
applicable to each company shown
above and to liquidate such entries.
Entries of certain oven racks occurring
before September 9, 2009, were already
liquidated at the time of the CVD order
due to the ITC’s finding of threat of
material injury on certain oven racks.
See CVD Order, 74 FR at 46974–75.
jlentini on DSK4TPTVN1PROD with NOTICES
Refrigeration Shelving
For certain refrigeration shelving from
the PRC entered, or withdrawn from
warehouse, for consumption from
January 7, 2009, through May 6, 2009,
and September 9, 2009, through
December 31, 2009, the Department will
instruct CBP to assess countervailing
duties at the rates applicable to each
company shown above and to liquidate
such entries. Entries of certain
refrigeration shelving occurring during
the period May 7, 2009, through
September 8, 2009, were not suspended
for CVD purposes due to the termination
of provisional measures. See CVD
Order, 74 FR at 46974–75.
Cash Deposit Instructions
The Department also intends to
instruct CBP to collect cash deposits of
estimated countervailing duties in the
amounts shown above. For all nonreviewed firms, we will instruct CBP to
continue to collect cash deposits of
estimated countervailing duties at the
most recent company-specific or allothers rate applicable to the company.
These rates shall apply to all nonreviewed companies until a review of a
company assigned these rates is
requested. These cash deposit
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16:33 Oct 06, 2011
Jkt 226001
requirements, when imposed, shall
remain in effect until further notice.
Public Comment
Interested parties may submit written
arguments in case briefs within 30 days
of the date of publication of this notice.
Rebuttal briefs, limited to issues raised
in case briefs, may be filed not later than
five days after the date of filing the case
briefs. Parties who submit briefs in this
proceeding should provide a summary
of the arguments not to exceed five
pages and a table of statutes,
regulations, and cases cited. Copies of
case briefs and rebuttal briefs must be
served on interested parties in
accordance with 19 CFR 351.303(f).
In accordance with 19 CFR
351.310(c), interested parties may
request a hearing within 30 days after
the date of publication of this notice.
Unless otherwise specified, the hearing,
if requested, will be held two days after
the scheduled date for submission of
rebuttal briefs.
Pursuant to section 751(a)(3)(A) of the
Act, the Department will publish a
notice of the final results of this
administrative review within 120 days
from the publication of these
preliminary results.
We are issuing and publishing these
results in accordance with sections
751(a)(1) and 777(i)(1) of the Act.
Dated: September 30, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import
Administration.
[FR Doc. 2011–26013 Filed 10–6–11; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
National Institute of Standards and
Technology
Notice of Public Meeting—Cloud
Computing Forum & Workshop IV
National Institute of Standards
and Technology (NIST), Commerce.
ACTION: Notice.
AGENCY:
NIST announces the Cloud
Computing Forum & Workshop IV to be
held on November 2, 3 and 4, 2011. This
SUMMARY:
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2.16
2.89
2.53
2.53
2.53
239.33
239.33
workshop will provide information on
the U.S. Government (USG) Cloud
Computing Technology Roadmap
initiative. This workshop will also
provide an updated status on NIST
efforts to help develop open standards
in interoperability, portability and
security in cloud computing. This event
is open to the public. In addition, NIST
invites organizations to participate as
Exhibitors as described in the
SUPPLEMENTARY INFORMATION section
below.
DATES: The Cloud Computing Forum &
Workshop IV will be held November 2,
3, and 4, 2011.
ADDRESSES: On the first and second day
of the event, November 2 & 3, panel
discussions will be held at the National
Institute of Standards and Technology,
100 Bureau Drive, Gaithersburg, MD
20899 in the Red Auditorium of the
Administration Building, Building 101.
The third day, November 4, will feature
workshops held at the Crown Plaza, 3
Research Court, Rockville, MD 20850.
Please note admittance instructions
under the SUPPLEMENTARY INFORMATION
section of this notice.
FOR FURTHER INFORMATION CONTACT: To
submit a response to this request for
exhibitors, and for further information
contact Romayne Hines by e-mail at
romayne.hines@nist.gov or by phone at
(301) 975–4500.
SUPPLEMENTARY INFORMATION: NIST
hosted three prior Cloud Computing
Forum & Workshop events in May 2010,
November 2010, and April 2011. The
purpose of these workshops was to
respond to the request of the Federal
Chief Information Officer to NIST to
lead federal efforts on standards for data
portability, cloud interoperability, and
security. The workshops’ goals were to
initiate engagement with industry to
accelerate the development of cloud
standards for interoperability,
portability, and security; discuss the
Federal Government’s experience with
cloud computing, report on the status of
the NIST Cloud Computing efforts,
launch and report progress on the NIST
led initiative to collaboratively develop
a USG Cloud Computing Technology
Roadmap among multiple federal and
E:\FR\FM\07OCN1.SGM
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]]>Agencies
[Federal Register Volume 76, Number 195 (Friday, October 7, 2011)]
[Notices]
[Pages 62364-62373]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-26013]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-942]
Certain Kitchen Appliance Shelving and Racks From the People's
Republic of China: Preliminary Results of the Countervailing Duty
Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') is conducting
an administrative review of the countervailable duty order on certain
kitchen appliance shelving and racks (``Kitchen Racks'') from the
People's Republic of China (``PRC''). The period of review (``POR'') is
January 7, 2009, through December 31, 2009 (see further explanation in
the ``Period of Review'' section of this notice). This review covers
multiple exporters/producers, two of which are being individually
reviewed as mandatory respondents. We preliminarily find that the
mandatory respondents, Guangdong Wireking Housewares & Hardware Co.,
Ltd. (``Wireking'') and New King Shan (Zhu Hai) Co., Ltd. (``NKS''),
received countervailable subsidies during the POR. Their countervailing
duty (``CVD'') rates have been used to calculate the rate applied to
the other firms subject to this review. If these preliminary results
are adopted in our final results of review, we will instruct U.S.
Customs and Border Protection (``CBP'') to assess countervailing duties
as detailed in the ``Preliminary Results of Review'' section of this
notice. Interested parties are invited to comment on these preliminary
results.
DATES: Effective Date: October 7, 2011.
FOR FURTHER INFORMATION CONTACT: Alexander Montoro or Jennifer Meek,
Office of 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) 482-0238 and (202) 482-2778, respectively.
SUPPLEMENTARY INFORMATION:
Background
On July 27, 2009, the Department published a CVD order on Kitchen
Racks from the PRC. See Certain Kitchen Appliance Shelving and Racks
From the People's Republic of China: Countervailing Duty Order, 74 FR
46973 (September 14, 2009) (``CVD Order''). On September 1, 2010, we
published a notice of ``Opportunity to Request Administrative Review''
for this CVD order. See Antidumping or Countervailing Duty Order,
Finding, or Suspended Investigation; Opportunity To Request
Administrative Review, 75 FR 53635, 53636 (September 1, 2010). On
September 30, 2010, Nashville Wire Products Inc. and SSW Holding
Company, Inc. (collectively ``Petitioners'') requested a review of ten
companies. On October 28, 2010, we initiated a review of five of the
companies: Wireking; NKS; Leader Metal Industry Co., Ltd. (aka Marmon
Retail Services Asia) (``Leader Metal''); Hangzhou Dunli Import and
Export Co., Ltd./Hangzhou Dunli Industry Co., Ltd. (``Dunli''); and
Jiangsu Weixi Group Co. (``Jiangsu Weixi''). See Initiation of
Antidumping and Countervailing Duty Administrative Reviews, 75 FR
66349, 66351 (October 28, 2010), as corrected by Initiation of
Antidumping and Countervailing Duty Administrative Reviews; Correction,
75 FR 69054 (November 10, 2010) (``Initiation Correction'').\1\ On
November 29, 2010, after receiving further information from
Petitioners, we initiated reviews of two additional companies requested
by Petitioners: Asia Pacific CIS (Wuxi) Co., Ltd. (``Asia Pacific
CIS'') and Hengtong Hardware Manufacturing (Huizhou) Co., Ltd.
(``Hengtong''). See Initiation of Antidumping and Countervailing Duty
Administrative Reviews, 75 FR 73036, 73038 (November 29, 2010).
---------------------------------------------------------------------------
\1\ The Department notes that only the POR for the antidumping
duty administrative review was included in the November 10, 2010
notice. See Initiation Correction, 75 FR at 69059. All notices
concerning the administrative review of the countervailing duty
order apply to the POR referenced in the initiation notices and this
notice, generally January 7, 2009, through December 31, 2009 (see
``Period of Review'' section below for further discussion).
---------------------------------------------------------------------------
In order to select mandatory respondents for this review, we issued
questionnaires on December 3, 2010, to the seven companies covered by
the review, requesting information about the quantity and value
(``Q&V'') of subject merchandise exports made to the United States
during the POR (``Q&V questionnaires''). As in the underlying
investigation, we did not rely on CBP data for respondent selection
because the Harmonized Tariff Schedule of the United States (``HTSUS'')
categories that include subject merchandise are broad and contain
products other than the subject merchandise. See Memorandum to Susan H.
Kuhbach from Joseph Shuler, regarding ``Selection of Respondents for
the Countervailing Duty Administrative Review of Certain Kitchen
Appliance Shelving and Racks from the People's Republic of China''
[[Page 62365]]
(January 25, 2011) (``Respondent Selection Memorandum''). We received
responses from five companies. We confirmed the delivery of the Q&V
questionnaires to the two producers/exporters that did not respond,
Asia Pacific CIS and Jiangsu Weixi. See Memorandum to the File from
Joseph Shuler, regarding ``Delivery Confirmation of Quantity and Value
Questionnaires'' (January 10, 2011) (``Delivery Confirmation Memo'').
On January 25, 2011, we selected Wireking and NKS as mandatory
respondents. See Respondent Selection Memorandum.
On January 28, 2011, we issued CVD questionnaires to the Government
of the PRC (``GOC''), Wireking, and NKS. On February 14, 2011, we
issued a correction to the CVD questionnaire to Wireking and NKS. We
received responses to our questionnaires from NKS on March 14, 2011
(``NQR'') and from the GOC and Wireking on March 22, 2011 (``GQR'' and
``WQR,'' respectively).
On June 15, 2011, we issued supplemental CVD questionnaires to the
GOC, Wireking, and NKS. We received a partial response from NKS on
June, 29, 2011 (``NSQR1a'') and a response to the remaining portion of
the supplemental CVD questionnaire on July 15, 2011. On July 13, 2011
we received a response from Wireking (``WSQR1''), and on July 14, 2011,
we received a response from the GOC (``GSQR1'').
On April 8, 2011, Petitioners requested that the Department expand
its CVD administrative review to include one additional (new) subsidy
program. We initiated on this program on June 28, 2011. See Memorandum
to Susan Kuhbach from Jennifer Meek and Patricia Tran, regarding
``Countervailing Duty Administrative Review of Certain Kitchen
Appliance Shelving and Racks from the People's Republic of China:
Initiation of New Subsidy Allegation'' (June 28, 2011). On July 1,
2011, we issued a questionnaire regarding the new subsidy allegation
(``NSA'') to the GOC, Wireking, and NKS. On July 15, 2011, we received
responses from the GOC and Wireking regarding the NSA questionnaire,
and on July 18, 2011, we received a response to the NSA questionnaire
from NKS (``NNSAQR'').
On August 12, 2011, we issued second supplemental questionnaires to
the GOC, Wireking, and NKS. On August 19, 2011, we received a response
from the GOC and NKS (``GSQR2'' and ``NSQR2,'' respectively). We
received Wireking's response on August 26, 2011 (``WSQR2''). On August
26, 2011, we issued a third supplemental questionnaire to the GOC. We
received a response from the GOC on September 2, 2011. On September 19,
2011, we issued a third supplemental questionnaire to NKS. We received
a response from NKS on September 23, 2011.
On May 13, 2011, we extended the deadline for the preliminary
results until September 30, 2011. See Certain Kitchen Shelving and
Racks From the People's Republic of China: Extension of Time Limit for
Preliminary Results of Countervailing Duty Administrative Review, 76 FR
27990 (May 13, 2011).
Scope of the Order
The scope of the order consists of shelving and racks for
refrigerators, freezers, combined refrigerator-freezers, other
refrigerating or freezing equipment, cooking stoves, ranges, and ovens.
Certain kitchen appliance shelving and racks are defined as shelving,
baskets, racks (with or without extension slides, which are carbon or
stainless steel hardware devices that are connected to shelving,
baskets, or racks to enable sliding), side racks (which are welded wire
support structures for oven racks that attach to the interior walls of
an oven cavity that does not include support ribs as a design feature),
and sub-frames (which are welded wire support structures that interface
with formed support ribs inside an oven cavity to support oven rack
assemblies utilizing extension slides) with the following dimensions:
Shelving and racks with dimensions ranging from 3 inches
by 5 inches by 0.10 inch to 28 inches by 34 inches by 6 inches; or
Baskets with dimensions ranging from 2 inches by 4 inches
by 3 inches to 28 inches by 34 inches by 16 inches; or
Side racks from 6 inches by 8 inches by 0.10 inch to 16
inches by 30 inches by 4 inches; or
Sub-frames from 6 inches by 10 inches by 0.10 inch to 28
inches by 34 inches by 6 inches.
The subject merchandise is comprised of carbon or stainless steel
wire ranging in thickness from 0.050 inch to 0.500 inch and may include
sheet metal of either carbon or stainless steel ranging in thickness
from 0.020 inch to 0.20 inch. The subject merchandise may be coated or
uncoated and may be formed and/or welded. Excluded from the scope of
the order is shelving in which the support surface is glass.
The merchandise subject to the order is currently classifiable in
the HTSUS statistical reporting numbers 8418.99.80.50, 7321.90.50.00,
7321.90.60.40, 7321.90.60.90, 8418.99.80.60, 8419.90.95.20,
8516.90.80.00, and 8516.90.80.10. Although the HTSUS subheadings are
provided for convenience and customs purposes, the written description
of the scope of the order is dispositive.
Period of Review
We are conducting our analysis in this review on an annual basis,
i.e., for the entire calendar year 2009. However, the duties calculated
will be applied as follows: for refrigeration shelving duties will be
applied to entries from January 7, 2009 through May 6, 2009, and
September 9, 2009, through December 31, 2009; for oven racks duties
will apply to entries from September 9, 2009, through December 31,
2009.\2\
---------------------------------------------------------------------------
\2\ Entries of certain refrigeration shelving occurring during
the period May 7, 2009, through September 8, 2009, were not
suspended for CVD purposes due to the termination of provisional
measures. Entries of certain oven racks occurring before September
9, 2009, were liquidated at the time of the CVD order because the
International Trade Commission (``ITC'') found threat of material
injury on certain oven racks. See CVD Order, 74 FR at 46974-75.
---------------------------------------------------------------------------
Use of Facts Otherwise Available and Adverse Inferences
Sections 776(a)(1) and (2) of the Tariff Act of 1930, as amended
(``the Act''), provide that the Department shall apply ``facts
otherwise available'' if necessary information is not on the record or
if an interested party or any other person: (A) Withholds information
that has been requested; (B) fails to provide information within the
deadlines established, or in the form and manner requested by the
Department, subject to subsections (c)(1) and (e) of section 782 of the
Act; (C) significantly impedes a proceeding; or (D) provides
information that cannot be verified as provided by section 782(i) of
the Act.
Section 776(b) of the Act further provides that the Department may
use an adverse inference in applying the facts otherwise available when
a party has failed to cooperate by not acting to the best of its
ability to comply with a request for information.
1. Non-Cooperative Companies
As explained in the ``Background'' section above, two companies in
this review, Asia Pacific CIS and Jiangsu Weixi, did not provide a
response to the Department's Q&V questionnaire issued during the
respondent selection process. We confirmed the delivery of the Q&V
questionnaires to these companies. See Delivery Confirmation Memo.
Accordingly, we determine that these non-cooperating companies withheld
requested information and significantly impeded this proceeding.
Specifically, by not responding to requests for
[[Page 62366]]
information concerning the Q&V of their sales, the companies impeded
the Department's ability to select the most appropriate respondents in
this review. Thus, we are basing the CVD rate for these non-cooperating
companies on facts otherwise available, pursuant to sections
776(a)(2)(A) and (C) of the Act.
We further preliminarily determine that an adverse inference is
warranted, pursuant to section 776(b) of the Act. By failing to submit
responses to the Department's Q&V questionnaire, these companies did
not cooperate to the best of their ability in this review. Accordingly,
we preliminarily find that an adverse inference is warranted to ensure
that the non-cooperating companies will not obtain a more favorable
result than had they fully complied with our request for information.
In deciding which facts to use as adverse facts available
(``AFA''), section 776(b) of the Act and 19 CFR 351.308(c)(1) and (2)
authorize the 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
Statement of Administrative Action (``SAA'') accompanying the Uruguay
Round Agreements Act, H.R. Rep. No. 103-316, Vol. I, at 870 (1994),
reprinted at 1994 U.S.C.C.A.N. 4040, 4199.
In applying AFA for these non-cooperative companies, we are guided
by the Department's approach in recent CVD investigations and reviews.
See, e.g., Aluminum Extrusions From the People's Republic of China:
Final Affirmative Countervailing Duty Determination, 76 FR 18521 (April
4, 2011) (``Aluminum Extrusions from the PRC''), and accompanying
Issues and Decision Memorandum (``Aluminum Extrusions from the PRC
Decision Memorandum'') at ``Application of Adverse Inferences: Non-
Cooperative Companies'' section;\3\ Circular Welded Austenitic
Stainless Pressure Pipe from the People's Republic of China: Final
Affirmative Countervailing Duty Determination, 74 FR 4936 (January 28,
2009), and accompanying Issues and Decision Memorandum at ``Application
of Facts Available and Use of Adverse Inferences'' section; and Certain
Hot-Rolled Carbon Steel Flat Products from India: Final Results and
Partial Rescission of Countervailing Duty Administrative Review, 74 FR
20923 (May 6, 2009), and accompanying Issues and Decision Memorandum at
``SGOC Industrial Policy 2004-2009'' section. Under this practice, the
Department computes the total AFA rate for non-cooperating companies
generally using program-specific rates calculated for the cooperating
respondents in the instant review or prior reviews of instant case, or
calculated in prior CVD cases involving the country under review (in
the instant case, the PRC).
---------------------------------------------------------------------------
\3\ In the underlying investigation, the Department excluded
from its AFA calculation for non-cooperative Q&V companies sub-
national programs alleged after respondent selection. See Certain
Kitchen Shelving and Racks from the People's Republic of China:
Final Affirmative Countervailing Duty Determination, 74 FR 37012
(July 27, 2009), and accompanying Issues and Decision Memorandum
(``Kitchen Racks Decision Memorandum'') at 5. Consistent with
Aluminum Extrusions from the PRC, we determine it appropriate to now
include newly alleged and self-reported programs in the AFA
calculation for non-cooperative respondents, including non-
cooperative Q&V companies. See Aluminum Extrusions from the PRC
Decision Memorandum at Comment 8. We find that this approach
prevents non-cooperative respondents from successfully avoiding
being associated with newly alleged subsidy programs and subsidies
discovered during the course of the investigation or review.
---------------------------------------------------------------------------
In these preliminary results, for the income tax rate reduction or
exemption programs, we are applying an adverse inference that the non-
cooperating companies paid no income taxes during 2009. For programs
other than those involving income tax rate reduction or exemption
programs, we have first sought to apply, where available, the highest,
above de minimis subsidy rate calculated for an identical program from
any segment of this proceeding. Absent such a rate, we have applied,
where available, the highest, above de minimis subsidy rate calculated
for a similar program from any segment of this proceeding. Absent an
above de minimis subsidy rate calculated for the same or similar
program in this proceeding, we have applied the highest non-de minimis
rate calculated for the same or similar program (based on treatment of
the benefit) in another PRC CVD proceeding. Absent an above de minimis
subsidy rate calculated for the same or similar program in any PRC CVD
proceeding, we applied the highest calculated subsidy rate for any
program otherwise listed from any prior PRC CVD cases, so long as the
non-cooperating companies conceivably could have used the program for
which the rate was calculated. See Aluminum Extrusions from the PRC
Decision Memorandum at ``Application of Adverse Inferences: Non-
Cooperative Companies'' section; see also Lightweight Thermal Paper
From the People's Republic of China: Final Affirmative Countervailing
Duty Determination, 73 FR 57323 (October 2, 2008), and accompanying
Issues and Decision Memorandum at ``Selection of the Adverse Facts
Available Rate'' section. On this basis, we preliminarily determine the
AFA subsidy rate for Asia Pacific CIS and Jiangsu Weixi to be 239.33
percent ad valorem.
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 SAA at 870. The Department considers information to
be corroborated if it has probative value. 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. Id. at
869.
With regard to the reliability aspect of corroboration, we note
that the rates were calculated in this review or in recent final CVD
determinations. Further, the calculated rates were based upon
information about the same or similar programs. Moreover, no
information has been presented 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
[[Page 62367]]
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,
6814 (February 22, 1996).
In the absence of record evidence concerning these programs due to
the non-cooperative Q&V companies' decision not to participate in the
review, we have 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,
we have selected the highest calculated subsidy rate for any PRC
program from which the non-cooperative Q&V companies could receive a
benefit to use as AFA. The relevance of these rates is that they are
actual calculated CVD rates for a PRC program from which the non-
cooperative Q&V companies could actually receive a benefit. Further,
these rates were calculated for periods close to the POR in the instant
case. Moreover, the failure of these companies to respond to requests
for information has ``resulted in an egregious lack of evidence on the
record to suggest an alternative rate.'' 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 non-cooperative Q&V
companies and the resulting lack of record information concerning their
use of programs under review, the Department has corroborated the rates
it selected to the extent practicable.
For a detailed discussion of the AFA rates selected for each
program under review, see Memorandum to the File from Jennifer Meek and
Alexander Montoro, regarding ``Application of Adverse Facts Available
Rates for Preliminary Results'' (September 30, 2011).
2. GOC--Wire Rod
The Department sought information from the GOC about the producers
of the wire rod purchased by Wireking and NKS. In particular, for any
of the wire rod producers that are not majority-owned by the GOC, the
GOC was asked, inter alia, to trace back the ownership to the ultimate
individual or state owners. See the Department's January 28, 2011
questionnaire at Section II/Appendix 3. The GOC provided information
indicating that several wire rod producers were owned in whole or in
part by other companies, but failed to provide the ownership of those
other companies. For one wire rod producer, the GOC failed to provide
any ownership information.
We preliminarily determine that the GOC has withheld necessary
information that was requested of it and, thus, that the Department may
rely on ``facts available'' in making our preliminary determination.
See sections 776(a)(1) and (a)(2)(A) of the Act. Moreover, we
preliminarily determine that the GOC has failed to cooperate by not
acting to the best of its ability to comply with our request for
information. Consequently, an adverse inference is warranted in the
application of facts available. See section 776(b) of the Act. We are
applying the adverse inference that the producers of wire rod used by
Wireking and NKS are government authorities that provided a financial
contribution as described under section 771(5)(D)(iv) of the Act.
Subsidies Valuation Information
Allocation Period
The average useful life period in this proceeding, as described in
19 CFR 351.524(d)(2), is 12 years according to the U.S. Internal
Revenue Service's 1977 Class Life Asset Depreciation Range System, as
revised. See U.S. Internal Revenue Service Publication 946 (2008), How
to Depreciate Property, at Table B-2: Table of Class Lives and Recovery
Periods. No party in this proceeding has disputed this allocation
period.
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)-(v) directs that the Department will attribute
subsidies received by certain other companies to the combined sales of
the recipient and other companies if: (1) Cross-ownership exists
between the companies; and (2) the cross-owned companies produce the
subject merchandise, are a holding or parent company of the subject
company, produce an input that is primarily dedicated to the production
of the downstream product, or transfer a subsidy to a cross-owned
company.
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 section of the
Department's regulations states that this standard will normally be met
where there is a majority voting ownership interest between two
corporations or through common ownership of two (or more) corporations.
The Preamble to the Department's regulations further clarifies the
Department's cross-ownership standard. According to the Preamble,
relationships captured by the cross-ownership definition include those
where
the interests of two corporations have merged to such a degree that
one corporation can use or direct the individual assets (or subsidy
benefits) of the other corporation in essentially the same way it
can use its own assets (or subsidy benefits) * * * Cross-ownership
does not require one corporation to own 100 percent of the other
corporation. Normally, cross-ownership will exist where there is a
majority voting ownership interest between two corporations or
through common ownership of two (or more) corporations. In 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).
Thus, the Department's regulations make clear that the agency must
look at the facts presented in each case in determining whether cross-
ownership exists.
The U.S. Court of International Trade (``CIT'') has 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, SA v. United States, 166 F. Supp. 2d 593,
600-604 (CIT 2001).
Wireking stated that it is a wholly foreign-owned company, with its
parent companies located outside of the PRC. Wireking also responded
that it has no affiliates that are cross-owned within the meaning of 19
CFR 351.525(b)(6). See WQR at 4-5. Therefore, we are limiting our
analysis to Wireking.
NKS also stated that it is wholly owned by entities located outside
of the PRC. NKS identified several affiliated companies and reported
that none of them are located in the PRC. See NQR at 3-5. Therefore, we
are limiting our analysis to NKS.
[[Page 62368]]
Analysis of Programs
Based upon our analysis and the responses to our questionnaires, we
determine the following:
I. Programs Preliminarily Determined To Be Countervailable
A. Two Free, Three Half Program
Under Article 8 of the FIE Tax Law, a foreign-invested enterprise
(``FIE'') that is ``productive'' and is scheduled to operate for more
than ten years may be exempted from income tax in the first two years
of profitability and pay income taxes at half the standard rate for the
subsequent three years. See GQR at 23. The GOC claims that the ``Two
Free, Three Half'' program was terminated effective January 1, 2008, by
the Enterprise Income Tax Law but companies already enjoying the
preference were permitted to continue. See GQR at 23-24 and Exhibits 1,
3 and 4.
The Department has previously found this program countervailable.
See CFS Decision Memorandum at 11-12; see also Certain Seamless Carbon
and Alloy Steel Standard, Line, and Pressure Pipe from the People's
Republic of China: Final Affirmative Countervailing Duty Determination,
Final Affirmative Critical Circumstances Determination, 75 FR 57444
(September 21, 2010), and accompanying Issues and Decision Memorandum
at 25.
NKS reported that it used this program during 2009. See NQR at 12.
We preliminarily determine that the exemption or reduction of the
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 forgone by the GOC, and it provides
a benefit to the recipient 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, i.e.,
``productive'' FIEs and, hence, is specific under section 771(5A)(D)(i)
of the Act.
To calculate the benefit, we treated the income tax savings
received by NKS as a recurring benefit, consistent with 19 CFR
351.524(c)(1). To compute the amount of the tax savings, we compared
the income tax that NKS would have paid in the absence of the program
with the income tax that NKS actually paid during 2009.
We divided the benefits received in 2009 by NKS's 2009 total sales,
in accordance with 19 CFR 351.525(b)(6)(i). On this basis, we
preliminarily determine that NKS received a countervailable subsidy of
1.00 percent ad valorem under this program.
B. Income Tax Reduction for FIEs Based on Geographic Location
To promote economic development and attract foreign investment,
``productive'' FIEs located in coastal economic zones, special economic
zones or economic and technical development zones in the PRC were
subject to preferential tax rates of 15 percent or 24 percent,
depending on the zone. See GQR at 5. This program was created on June
15, 1988, pursuant to the Provisional Rules on Exemption and Reduction
of Corporate Income Tax and Business Tax of FIEs in Coastal Economic
Development Zone issued by the Ministry of Finance, and continued under
Article 7 of the FIE Tax Law on July 1, 1991. See GQR at Exhibit 3.
As a result of the transition provisions of the new Enterprise
Income Tax Law, which came into force on January 1, 2008, enterprises
that were eligible for the reduced rates of 15 percent or 24 percent
are to be gradually transitioned to the uniform rate of 25 percent over
a five-year period. See GQR at 6 and Exhibit 2.
In the underlying investigation, we determined that this program
conferred a countervailable benefit. See Kitchen Racks Decision
Memorandum at 11-12. No interested party provided new evidence that
would lead us to reconsider our earlier finding. See, e.g., Live Swine
from Canada; Final Results of Countervailing Duty Administrative
Reviews, 61 FR 52408, 52420 (October 7, 1996) (``{I{time} t is the
Department's policy not to re-examine the issue of that program's
countervailability in subsequent reviews unless new information or
evidence of changed circumstances is submitted which warrants
reconsideration.''). Therefore, we continue to find that these tax
benefits confer a countervailable subsidy.
NKS reported paying a reduced income tax rate during the POR under
the program. See NQR at 10-11.
To calculate the benefit, we treated the income tax savings
received by NKS as a recurring benefit, consistent with 19 CFR
351.524(c)(1). To compute the amount of the tax savings, we compared
the income tax NKS would have paid in the absence of the program (i.e.,
at the 25 percent rate) with the income tax that NKS actually paid
during the 2009 (i.e., at the reduced rate).
We divided the benefits received by NKS in 2009 by its 2009 total
sales, in accordance with 19 CFR 351.525(b)(6)(i). On this basis, we
preliminarily determine that NKS received a countervailable subsidy of
0.77 percent ad valorem under this program.
C. Exemption From City Maintenance and Construction Taxes and Education
Fee Surcharges for FIEs in Guangdong Province
Pursuant to the Circular on Temporarily Not Collecting City
Maintenance and Construction Tax and Education Fee Surcharge for FIEs
and Foreign Enterprises (GUOSHUIFA {1994{time} No. 38), the local tax
authorities exempt all FIEs and foreign enterprises from the city
maintenance and construction tax and the education fee surcharge. See
GQR at 10 at Exhibit 6 and KASR Decision Memorandum at 7.
In the underlying investigation, we determined that this program
conferred a countervailable benefit, where this program was referred to
as ``Exemption from City Construction Tax and Education Tax for FIEs in
Guangdong Province.'' See Kitchen Racks Decision Memorandum at 13. No
interested party provided new evidence that would lead us to reconsider
our earlier finding. Therefore, we continue to find that these tax
exemptions confer a countervailable subsidy.
Both NKS and Wireking stated they have never paid the City
Maintenance and Construction Taxes or Education Fee Surcharges. See WQR
at 10 and NKS at 11. These taxes are calculated as a percentage of the
value added tax (``VAT'') and business and consumption taxes paid by
enterprises. Wireking reported the amount it would have paid during the
POR had it been subject to the City Maintenance and Construction Taxes
or Education Fee Surcharges. See WSQR1 at 5. NKS states it did not pay
any VAT, business or consumption tax and therefore, would not have paid
this tax even if had not been exempted under this program. See NKSQR3
at 1.
To calculate the benefit, we treated Wireking's tax savings as a
recurring benefit, consistent with 19 CFR 351.524(c)(1), and divided
the company's savings received during 2009 by the company's total 2009
sales. To compute the amount of the city maintenance and construction
tax savings, we compared what Wireking would have paid in the absence
of the program (seven percent of the total of VAT, business tax, and
consumption tax paid during 2009) with what it paid (zero). To
calculate the amount of the savings from the educational fee surcharge
exemption, we compared what Wireking would have paid in the absence of
the program (three percent of
[[Page 62369]]
total of VAT, business tax, and consumption tax paid during 2009) with
what it paid (zero). Id. On this basis, we preliminarily determine the
countervailable subsidy to be 0.54 percent ad valorem for Wireking.
D. Shunde Famous Brands
According to the GOC, this program was established in June 2003 and
was terminated in December 2008. The purpose of this program was to
increase the popularity and competitiveness of the product brands and,
to be eligible for awards, an enterprise must have been designated as a
``Famous Trademark of China,'' ``Chinese Famous Product,'' ``Famous
Trademark of Guangdong province,'' or ``Guangdong Famous Product.'' See
GSQR1 at 12-13 and Exhibit 4. The GOC stated that the government
authority responsible for administering this program was the Shunde
Economic and Trade Bureau (currently known as Shunde Economic Promotion
Bureau). Id.; see also GSQR2 at Exhibit 1.
Wireking was approved for a grant under this program in 2008 and
received these funds in 2009. See GSQR2 at Exhibit 1 and WQR at 13.
We preliminarily determine that Wireking received a countervailable
subsidy during the POR under this program. We find the grant to be a
direct transfer of funds within the meaning of section 771(5)(D)(i) of
the Act, providing a benefit in the amount of the grant. See 19 CFR
351.504(a). Based on information provided on the record, we further
preliminarily determine that grants under this program are de facto
specific based on the limited number of users. See section
771(5A)(D)(iii)(I) of the Act. See also GSQR2 at Exhibit 1.
To calculate the countervailable subsidy, we used our standard
methodology for non-recurring grants. See 19 CFR 351.524(b). As
Wireking was approved for the funds in 2008 and received payment in
2009, we first applied the ``0.5 percent test,'' pursuant to 19 CFR
351.524(b)(2) using Wireking's 2008 total sales. The grant amount was
less than 0.5 percent of Wireking's 2008 total sales. Thus, in
accordance with 19 CFR 351.524(b)(2), we expensed the entire amount of
the grant and attributed the benefit to Wireking's total sales in the
year of receipt (i.e., 2009). On this basis, we preliminarily find a
countervailable subsidy of 0.10 percent ad valorem for Wireking.
E. International Market Exploration Fund
The GOC confirmed that the International Market Exploration Fund
program under which Wireking received assistance in 2009 is the same
program as the ``International Market Development Fund Grants for Small
and Medium Sized Enterprises'' program (also known as ``SME Fund'',
``Medium & Small Size Enterprise International Market Expansion
Assistance'' program or ``International Exhibition Show Assistance''
program) previously investigated by the Department and found
countervailable; inter alia, in Aluminum Extrusions from the PRC. See
the Department's August 12, 2011, GOC second supplemental questionnaire
at Attachment 1 and GSQR2 at 2.
Wireking reported receiving funds under this program in 2009. See
WQR at 13.
We preliminarily determine that Wireking received a countervailable
subsidy during the POR under this program. We find the grant to be a
direct transfer of funds within the meaning of section 771(5)(D)(i) of
the Act, providing a benefit in the amount of the grant. See 19 CFR
351.504(a). Further, we find the grant to be specific under section
771(5A)(B) of the Act because receipt of the grant is contingent upon
export performance.
To calculate the countervailable subsidy, we used our standard
methodology for non-recurring grants. See 19 CFR 351.524(b). Treating
the year of receipt as the year of approval, we applied the ``0.5
percent test,'' pursuant to 19 CFR 351.524(b)(2). The 2009 grant amount
was less than 0.5 percent of Wireking's 2009 export sales. Thus, in
accordance with 19 CFR 351.524(b)(2), we expensed the entire amount of
the grant to 2009 and attributed the benefit to Wireking's 2009 export
sales. On this basis, we preliminarily find a countervailable subsidy
of 0.02 percent ad valorem for Wireking.
F. Foshan Shunde Export Rebate
Wireking reported that it received a grant but was unable to
identify the program under which it was given. See WSQR1 at 4. Wireking
claims the only information it has regarding this grant is what is
listed on the receipt from a local finance bureau. See WSQR2 at 2-3.
Wireking also states it has been unable to gather more information from
the local finance bureau that distributed the funds. Based on the
information it has, Wireking believes the grant was related to exports.
We will continue to gather information regarding this program for the
final results.
Based on the translated information provided by Wireking regarding
the receipt of this grant, we preliminarily find that the grant under
this program conferred a countervailable subsidy. We find the grant to
be a direct transfer of funds within the meaning of section
771(5)(D)(i) of the Act, providing a benefit in the amount of the
grant. See 19 CFR 351.504(a). Further, we find the grant to be specific
under section 771(5A)(B) of the Act because receipt of the grant is
contingent upon export performance.
To calculate the countervailable subsidy, we used our standard
methodology for non-recurring grants. See 19 CFR 351.524(b). As the
approval date is unknown, we are treating the year of receipt, 2009, as
the year of approval as facts available under section 776(a)(1) of the
Act. We applied the ``0.5 percent test,'' pursuant to 19 CFR
351.524(b)(2). The grant amount was less than 0.5 percent of Wireking's
2009 export sales. Thus, in accordance with 19 CFR 351.524(b)(2), we
expensed the entire amount of the grant to 2009 and attributed the
benefit to Wireking's 2009 export sales. On this basis, we
preliminarily determine the countervailable subsidy attributable to
Wireking to be 0.06 percent ad valorem under this program.
G. Zhuhai Export Trade Grant
According to the GOC, the Zhuhai Export Trade Grant program was
established pursuant to ZWJM (2009) No. 28 and came into effect in
November 2008. The purpose of the program is to maintain the stable
development of international trade. See GSQR1 at 39-44 and Exhibit 9.
The GOC stated that the government authorities responsible for
approving and administering the program are the Zhuhai Foreign Economic
and Trade Corporation Bureau and the Zhuhai Finance Department. See
GSQR1 at 39 and Exhibit SGQ-9. To be eligible for assistance under this
program, a company must be registered in the Department of Industry and
Commerce of Zhuhai City, must not have committed a significant unlawful
act or behaved illegally in the last two years, must have exported at
least USD 1 million in 2008 and 2009, and must have increased its
exports in 2009 over 2008. See GSQR1 at 43.
NKS reported that it received a grant under this program during
2009. See NSQR1a at 3.
We preliminarily determine that NKS received a countervailable
subsidy during the POR under this program. We find the grant to be a
direct transfer of funds within the meaning of section 771(5)(D)(i) of
the Act, providing a benefit in the amount of the grant. See 19 CFR
351.504(a). Further, we find the grant to be specific under section
[[Page 62370]]
771(5A)(B) of the Act, because receipt of the grant is contingent upon
export performance.
To calculate the countervailable subsidy, we used our standard
methodology for non-recurring grants. See 19 CFR 351.524(b). As NKS was
approved for the funds in 2009, we applied the ``0.5 percent test,''
pursuant to 19 CFR 351.524(b)(2) using NKS's 2009 total export sales.
The 2009 grant amount was less than 0.5 percent of NKS's 2009 total
export sales. Thus, in accordance with 19 CFR 351.524(b)(2), we
expensed the entire amount of the grant to 2009. In accordance with 19
CFR 351.525(b)(2), we attributed the benefit to NKS's 2009 total export
sales. On this basis, we preliminarily find a countervailable subsidy
of 0.02 percent ad valorem for NKS.
H. Guangdong Supporting Fund
According the GOC, the Guangdong Supporting Fund program was
established in 2009 with the purpose of helping enterprises affected by
the economic crisis and maintaining employment. The GOC stated that the
government authorities responsible for administering the program are
the Guangdong Labor and Social Security Department, the Guangdong
Financial Department and the local tax bureau. See GSQR1 at Exhibit 11.
The Zhuhai Human Resource and Social Security Bureau is responsible for
disbursing payments from the fund. See GSQR1 at 45. To be eligible, a
company should be among the industries affected heavily by the
financial crisis or the company must be in difficult position. See
GSQR1 at 47. The GOC provided Yuelaoshefa (2009) No. 6, which defines
``enterprises in difficulty'' as enterprises in the ``Clothing,
textile, toys, printing, packing, electronics, house appliance,
hardware and plastics, and furniture business which have been
significantly influenced by the international financial crisis * * *
and have passed the identification of enterprises in difficulty.'' See
GSQR1 at Exhibit 11.
NKS reported that it received a benefit during 2009. See NSQR1a at
3. According to the GOC, NKS received funding from the ``enterprise in
a difficult position fund.'' See GSQR2 at 3.
We preliminarily determine that NKS received a countervailable
subsidy during the POR under this program. We find the grant to be a
direct transfer of funds within the meaning of section 771(5)(D)(i) of
the Act, providing a benefit in the amount of the grant. See 19 CFR
351.504(a). We further determine preliminarily that grants under this
program are limited to specific industries (i.e., enterprises in
difficulty such as clothing, textile, toys, printing, packing,
electronics, house appliance, hardware and plastics, and furniture
business). Hence, the grants are de jure specific under section
771(5A)(D)(i) of the Act.
To calculate the countervailable subsidy, we used our standard
methodology for non-recurring grants. See 19 CFR 351.524(b). We applied
the ``0.5 percent test,'' pursuant to 19 CFR 351.524(b)(2) using NKS's
2009 total sales. The 2009 grant amount was less than 0.5 percent of
NKS's 2009 total sales. Thus, in accordance with 19 CFR 351.524(b)(2),
we expensed the entire amount of the grant to 2009 and attributed the
benefit to NKS's 2009 total sales. On this basis, we preliminarily find
a countervailable subsidy of 0.06 percent ad valorem for NKS.
I. Provision of Wire Rod for Less Than Adequate Remuneration (``LTAR'')
In the underlying investigation, we determined that this program
conferred a countervailable subsidy. See Kitchen Racks Decision
Memorandum at 14-16. No interested party provided new evidence that
would lead us to reconsider our earlier findings that the GOC's
predominant role in the PRC's wire rod market renders domestic prices
unusable as benchmarks or that the subsidy conferred is specific. See
Kitchen Racks Decision Memorandum at 15-16. Therefore, our analysis
focuses on whether the producers of the wire rod used by Wireking and
NKS during the POR were authorities within the meaning of section
771(5)(B) of the Act and the extent of the benefit provided.
As discussed in the ``Use of Facts Otherwise Available and Adverse
Inferences'' section, above, we preliminarily determine that the wire
rod producers for whom the GOC did not provide complete ownership
information are authorities. For one wire rod producer, the ownership
information submitted by the GOC indicates majority state ownership. In
tires from the PRC, the Department determined that majority government
ownership of an input producer is sufficient to qualify it as an
``authority.'' 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 accompanying Issues and
Decision Memorandum at 10. Thus, we preliminarily determine this
supplier is an authority. For the final wire rod producer, which is
owned by individuals, the GOC has submitted incomplete information.
Consistent with section 782(d) of the Act, we intend to seek further
information. See ``Programs for Which More Information is Required''
section of this notice, below. For these preliminary results, however,
as we are still gathering information on this wire rod producer, we are
not including purchases of wire rod produced by this company in the
calculation. Based on our findings that certain wire rod producers are
authorities, we preliminarily determine that the GOC is providing a
good and, hence, a financial contribution under section 771(5)(D)(iii)
of the Act.
To determine whether this financial contribution results in a
subsidy to the Kitchen Racks producers, we followed 19 CFR
351.511(a)(2) for identifying an appropriate market-based benchmark for
measuring the adequacy of the remuneration for the wire rod. As in the
underlying investigation, we have relied upon tier two benchmarks,
i.e., world market prices available to purchasers in the PRC, to
determine the existence and extent of the benefit to Wireking and NKS.
See Kitchen Racks Decision Memorandum at 8. Petitioners submitted U.S.
domestic prices for wire rod, but we have not included these in our
benchmark because they do not represent world market prices available
to purchasers in the PRC. Instead, we have used the Steel Business
Briefing export prices for wire from Turkey, Black Sea, and Latin
America which were submitted by Wireking. See Wireking's Comments on
Benchmarking, June 15, 2011, and Memorandum to the File, regarding
``Wire Rod Benchmark Prices'' (September 30, 2011). This is consistent
with the Department's use of data from industry publications such as
the Steel Business Briefing in other recent CVD proceedings involving
the PRC. See, e.g., Wire Decking From the People's Republic of China:
Final Affirmative Countervailing Duty Determination, 75 FR 32902 (June
10, 2010), and accompanying Issues and Decision Memorandum at
``Provision of HRS Steel for LTAR'' section.
Under 19 CFR 351.511(a)(2)(iv), when measuring the adequacy of
remuneration under tier one or tier two, the Department will adjust the
benchmark price to reflect the price that a firm actually paid or would
pay if it imported the product, including delivery charges and import
duties. Regarding delivery charges, we have included the freight
charges that would be incurred to deliver wire rod to the respondents'
plants. We have also added import duties, as reported by the
[[Page 62371]]
GOC, and VAT applicable to imports of wire rod into the PRC. We have
compared these prices to the respondents' actual purchase prices,
including any taxes and delivery charges incurred to deliver the
product to their plants.
Comparing the adjusted benchmark prices to the prices paid by the
respondents for the wire rod they purchased, we preliminarily determine
that the GOC provided wire rod for LTAR, and that a benefit exists in
the amount of the difference between the benchmark and what the
respondents paid. See 19 CFR 351.511(a). We divided the difference
between the amounts actually paid by Wireking and NKS for wire rod and
what they would have paid under the benchmark in 2009, by the two
companies' respective total sales in 2009. On this basis, we
preliminarily determine the countervailable subsidy to be .82 percent
and 0.46 percent ad valorem for Wireking and NKS, respectively.
J. Provision of Electricity for LTAR
In the underlying investigation, we determined that this program
conferred a countervailable benefit. See Kitchen Racks Decision
Memorandum at 5-6 and 13. No interested party provided new evidence
that would lead us to reconsider our earlier finding that there is a
financial contribution that is specific. Therefore, our analysis is
focused on whether a benefit was conferred during the POR.
Both Wireking and NKS purchased electricity and provided monthly
usage and payment data. See NQR at 12, NSQR1a at 8, NSQR2 at 3; WQR at
11, WSQR1 at 6, WSQR2 at 6.
To determine the existence and amount of any benefit from this
program, we selected the highest electricity rates that were in effect
during the POR, consistent with our approach in the investigation. The
GOC provided electricity rate schedules for 2009, including the new
rates based on the price adjustment that occurred in November 2009. See
GQR at 23 and Exhibit GQ8-9. Based on these rate schedules, we have
constructed benchmark peak, normal, and valley rates for the ``large
industrial'' user category, including the highest provincial rate for
the base rate.
Consistent with our approach in drill pipe from the PRC we first
calculated the variable electricity costs of NKS and Wireking by
multiplying the monthly kilowatt hours (``KWH'') consumed at each price
category (peak, normal, and valley) by the corresponding electricity
rates they paid. See Drill Pipe From the People's Republic of China;
Final Affirmative Countervailing Duty Determination, Final Affirmative
Critical Circumstances Determination, 76 FR 1971 (January 11, 2011),
and accompanying Issues and Decision Memorandum at ``Provision of
Electricity for LTAR'' section. Next, we calculated the benchmark
variable electricity cost by multiplying the monthly KWH consumed at
each price category (peak, normal, and valley) by the highest
electricity rate charged for each price category. To calculate the
benefit for each month, we subtracted the variable electricity charge
paid by each respondent during the POR from the monthly benchmark
variable electricity cost.
To measure whether the respondents received a benefit with regard
to their transmitter capacity charge (a.k.a., base charge), we first
multiplied the monthly transmitter capacity charged to the companies by
the corresponding consumption quantity, where appropriate. Next, we
calculated the benchmark transmitter capacity cost by multiplying
companies' consumption quantities by the highest transmitter capacity
rate reflected in the electricity rate benchmark chart. To calculate
the benefit, we subtracted the transmitter costs paid by the companies
during the POR from the benchmark transmitter costs.
We then calculated the total benefit received during the POR under
this program by summing the benefits stemming from the respondents'
variable electricity payments and transmitter capacity payments.
We divided the benefit by the respondents' total sales in POR. On
this basis, we preliminarily determine net countervailable subsidy
rates of 0.62 percent ad valorem for Wireking and 0.58 percent ad
valorem for NKS.
II. Programs Preliminarily Determined Not To Confer a Measurable
Benefit During the POR
A. Shunde Patent Application
According to the GOC, this program was established in January 2001
and is intended to encourage investors in the Shunde district, and to
promote the development of the economy and technology. The GOC has
reported that any enterprise or public institution, government organ,
public organization, or individual, that resides in this district and
applies for a domestic patent for an invention, utility model patent,
or invention authorization, can receive this reward. See GSQR1 at 26.
Shunde Science and Technology Bureau (currently the Shunde Economic
Promotion Bureau) administers the program. See id. at 25 and Exhibit 7.
Wireking applied for and received a grant under this program in
2009. See WQR at 11.
Based on our analysis, any potential benefit to Wireking under this
program is less than 0.005 percent ad valorem. To determine this, we
divided the amount received by Wireking in 2009 by Wireking's total
sales in 2009. Where the countervailable subsidy rate for a program is
less than 0.005 percent, the Department's practice is to not include
that program in the total CVD rate. See, e.g., CFS Decision Memorandum
at ``Analysis of Programs, Programs Determined Not To Have Been Used or
Not To Have Provided Benefits During the POR for GE'' section. Thus,
without prejudice to the question of whether this program confers a
countervailable subsidy, and consistent with our practice, we determine
that any potential benefit under this program is not measurable. See
CFS Decision Memorandum at 15.
We examined the following programs and preliminarily determine that
the producers and/or exporters of the subject merchandise under review
did not apply for or receive benefits under these programs during the
POR:
III. Programs Found To Be Not Used or That Provided No Benefit During
the POR
1. Income Tax Refund for Reinvestment of Profits in Export-Oriented
Enterprises.
2. Income Tax Reduction for Export-Oriented FIEs.
3. Local Income Tax Exemption or Reduction Program for
``Productive'' FIEs.
4. Preferential Tax Subsidies for Research and Development by FIEs.
5. Income Tax Credits on Purchases of Domestically-Produced
Equipment by FIEs.
6. Income Tax Credits for Purchases of Domestically-Produced
Equipment by Domestically-Owned Companies.
7. Reduction in or Exemption from Fixed Assets Investment
Orientation Regulatory Tax.
8. VAT Rebates for FIEs Purchasing Domestically-Produced Equipment.
9. Import Tariff and VAT Exemptions for FIEs and Certain Domestic
Enterprises Using Imported Equipment in Encouraged Industries.
10. Import Tariff Exemptions for the ``Encouragement of Investment
by Taiwanese Compatriots''.
11. Provision of Nickel for LTAR by the GOC.
12. Government Provision of Water at LTAR to Companies Located in
[[Page 62372]]
Development Zones in Guangdong Province.
13. Exemption from Land Development Fees for Enterprises Located in
Industrial Cluster Zones.
14. Reduction in Farmland Development Fees for Enterprises Located
in Industrial Zones.
15. Special Subsidy from the Technology Development Fund to
Encourage Technology Development.
16. Exemption from District and Township Level Highway Construction
Fees for Enterprises Located in Industrial Cluster Zones.
17. Exemptions from or Reductions in Educational Supplementary Fees
and Embankment Defense Fees for Enterprises Located in Industrial
Cluster Zones.
18. Exemption from Real Estate Tax and Dike Maintaining Fee for
FIEs in Guangdong Province.
19. Import Tariff Refunds and Exemptions for FIEs in Guangdong
Province.
20. Preferential Loans and Interest Rate Subsidies in Guangdong
Province.
21. Direct Grants in Guangdong Province.
22. Funds for ``Outward Expansion'' of Industries in Guangdong
Province.
23. Land-related Subsidies to Companies Located in Specific Regions
of Guangdong Province.
24. Import Tariff and VAT Refunds and Exemptions for FIEs in
Zhejiang.
25. Grants to Promote Exports from Zhejiang Province.
26. Land-related Subsidies to Companies Located in Specific Regions
of Zhejiang.
27. Special Subsidy from the Technology Development Fund to
Encourage Technology Innovation.
28. Subsidies to Encourage Enterprises in Industrial Cluster Zones
to Hire Post-Doctoral Workers.
29. Land Purchase Grant Subsidy to Enterprises Located in
Industrial Cluster Zones and Encouraged Enterprises.
30. Exemption from Accommodating Facilities Fees for High-Tech and
Large-Scale FIEs.
31. Income Tax Deduction for Technology Development Expenses of
FIEs.
32. Preferential Land-Use Charges for Newly-Established, Industrial
Projects in Zhongshan's Industrial Zones.
33. Reduction of Land Price at the Township Level for Newly-
Established, Industrial Projects in Zhongshan's Industrial Zones.
34. Reduction in Urban Infrastructure Fee for Industrial
Enterprises in Industrial Zones.
35. Income Tax Rebate for ``Superior Industrial Enterprises'' in
Zhongshan.
36. Accelerated Depreciation for New Technological Transformation
Projects ``Superior Industrial Enterprises'' in Zhongshan.
37. Exemption from the Tax on Investments in Fixed Assets for
``Superior Industrial Enterprises'' in Zhongshan.
IV. Programs for Which More Information Is Required
A. Provision of Steel Strip for LTAR
The GOC has provided certain information requested by the
Department regarding this newly alleged subsidy. In particular, the GOC
has identified the producers of steel strip used by Wireking and NKS as
state-owned and has provided more general information regarding the
hot-rolled steel industry in the PRC. However, information on the
record shows that NKS used cold-rolled strip and that Wireking may have
used cold-rolled strip. See NNSAQR at Exhibit 2, WSQR3 at Exhibit 3,
and Petitioners' submission regarding benchmarks for the NSA (July 26,
2011). Wireking did not distinguish its purchases of hot- and cold-
rolled strip. See WSQR3 at Exhibit 3. To date, the GOC has not provided
information about the cold-rolled steel industry in the PRC or about
the specificity of any possible subsidy arising from the provision of
cold-rolled strip for LTAR. Consistent with section 782(d) of the Act,
we intend to seek further information on these issues. Also, we intend
to ask Wireking to distinguish its purchases of hot- and cold-rolled
strip.
B. Provision of Wire Rod for LTAR
As discussed above in the ``I.I. Provision of Wire Rod for LTAR''
section, the information submitted by the GOC regarding one wire rod
producer is incomplete. Therefore, we intend to seek further
information. In particular, we intend to ask the GOC to provide
complete translations of the information submitted in its most recent
supplemental response, to confirm and establish the completeness of
that information, to establish the reliability of the information
already provided to gather information on whether the owners are
officials of a village committee or other village-level government
entity and to seek information regarding the individual owners status
as Communist Party of China (``CCP'') officials directly from the CCP
or, alternatively, why the GOC cannot obtain or request this
information from the CCP.
C. Zhuhai Farmer Training Subsidy
According the GOC, the Zhuhai Farmer Training Subsidy program was
established in 2007 to promote the hiring and training of migrant rural
workers. The GOC identified the municipal or district labor and social
security department as the administrators of the program. See GSQR1 at
32 and Exhibit SGQ-8. To receive benefits an enterprise must employ
more than fifty migrant rural workers from other provinces, have no
arrears in the payment of wages, must sign employment contracts with
migrant rural workers for more than one year, and have the necessary
training place and equipment. See GSQR1 at 32-37.
The GOC's response requires clarification with regard to the
information provided on whether this program is administered specific.
Consistent with section 782(d) of the Act, we intend to seek further
information on this issue.
Preliminary Results of Review
In accordance with 19 CFR 351.221(b)(4)(i), we calculated
individual subsidy rates for the mandatory respondents, Wireking and
NKS.
For the non-selected respondents which responded to our requests
for Q&V information (i.e., Leader Metal, Dunli, and Hengtong), we have
followed the Department's practice, which is to base the margin on an
average of the margins calculated for those companies selected for
individual review, excluding de minimis rates or rates based entirely
on AFA. See, e.g., Certain Pasta From Italy: Preliminary Results of the
13th (2008) Countervailing Duty Administrative Review, 75 FR 18806,
18811 (April 13, 2010), unchanged in Certain Pasta from Italy: Final
Results of the 13th (2008) Countervailing Duty Administrative Review,
75 FR 37386 (June 29, 2010). Therefore, we have preliminarily assigned
to Leader Metal, Hangzhou Dunli, and Hengtong the simple average of the
rates calculated for Wireking and NKS. We have used a simple average
rather than a weighted average because weight averaging the rates of
the mandatory respondents risks disclosure of proprietary information.
For the non-selected respondents which did not respond to our
requests for Q&V information (i.e., Jiangsu Weixi and Asia Pacific
CIS), we are applying an AFA rate, as described above.
We preliminarily find the net subsidy rate for the producers/
exporters under review to be as follows:
[[Page 62373]]
------------------------------------------------------------------------
Net subsidy rate
Producer/Exporter (percent)
------------------------------------------------------------------------
Guangdong Wireking Housewares & Hardware Co., Ltd... 2.16
New King Shan (Zhu Hai) Co., Ltd.................... 2.89
Leader Metal Industry Co., Ltd. (aka Marmon Retail 2.53
Services Asia).....................................
Hangzhou Dunli Import and Export Co., Ltd/Hangzhou 2.53
Dunli Industry Co., Ltd............................
Hengtong Hardware Manufacturing (Huizhou) Co., Ltd..
