Utility Scale Wind Towers From the People's Republic of China: Initiation of Countervailing Duty Investigation, 3447-3450 [2012-1342]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 77, Number 15 (Tuesday, January 24, 2012)]
[Notices]
[Pages 3447-3450]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-1342]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-982]


Utility Scale Wind Towers From the People's Republic of China: 
Initiation of Countervailing Duty Investigation

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

DATES: Effective Date: January 24, 2012.

FOR FURTHER INFORMATION CONTACT: Kristen Johnson or Patricia Tran, AD/
CVD Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
4793 or (202) 482-1503, respectively.

SUPPLEMENTARY INFORMATION:

The Petition

    On December 29, 2011, the Department of Commerce (Department) 
received a countervailing duty (CVD) petition concerning imports of 
utility scale wind towers from the People's Republic of China (PRC) 
filed in proper form by the Wind Tower Trade Coalition (the 
Petitioner).\1\ See Petition for the Imposition of Antidumping and 
Countervailing Duties Against Utility Scale Wind Towers from the 
People's Republic of China and the Socialist Republic of Vietnam, dated 
December 29, 2011 (Petition).
---------------------------------------------------------------------------

    \1\ The following companies compose the Coalition: Broadwind 
Towers, Inc., DMI Industries, Katana Summit LLC, and Trinity 
Structural Towers, Inc. See Petition at Volume I, Exhibit I-1.
---------------------------------------------------------------------------

    On January 5, 2012, the Department issued supplemental 
questionnaires requesting information and clarification of certain 
areas of the general issues and CVD sections of the Petition.\2\ On 
January 6, 2012, the Department issued a supplemental questionnaire 
regarding the scope. Petitioner filed a supplement to the Petition 
regarding the CVD section on January 9, 2012. Petitioner filed a 
response to the general issues and scope requests on January 11, 2012 
(hereinafter, First Supplemental to the AD/CVD Petitions). Further, the 
Department issued a request for additional clarification to the scope 
on January 13, 2012. Petitioner filed a response to this request on 
January 17, 2012, (hereinafter, Second Supplemental to the AD/CVD 
Petitions).
---------------------------------------------------------------------------

    \2\ These public documents and all other public documents and 
public versions generated in the course of this proceeding by the 
Department and interested parties are available to the public 
through Import Administration's Antidumping and Countervailing Duty 
Centralized Electronic Service System (IA ACCESS), located in Room 
7046 of the main Department building.
---------------------------------------------------------------------------

    In accordance with section 702(b)(1) of the Tariff Act of 1930, as 
amended (the Act), Petitioner alleges that producers/exporters of 
utility scale wind towers from the PRC received countervailable 
subsidies within the meaning of sections 701 and 771(5) of the Act, and 
that imports from these producers/exporters materially injure, and 
threaten further material injury to, an industry in the United States.
    The Department finds that Petitioner filed the Petition on behalf 
of the domestic industry because Petitioner is an interested party, as 
defined in section 771(9)(C) of the Act, and has demonstrated 
sufficient industry support with respect to the investigation that it 
requests the Department to initiate. See ``Determination of Industry 
Support for the Petition,'' below.

Period of Investigation

    The period of investigation (POI) is January 1, 2011, through 
December 31, 2011.

Scope of Investigation

    The products covered by this investigation are utility scale wind 
towers from the PRC. For a full description of the scope of the 
investigation, please see the ``Scope of the Investigation,'' in 
Appendix I of this notice.

Comments on Scope of Investigation

    During our review of the Petition, we discussed the scope with 
Petitioner to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. Petitioner submitted 
revised scope language on January 12, 2012, and January 17, 2012. Among 
the revisions was the following substantive provision:

    Future utility scale wind tower configurations that meet the 
minimum height requirement, which may include lattice masts, and are 
designed to support wind turbine electrical generators greater than 
100 kW are also included within this scope.

    The Department has not adopted this specific revision recommended 
by Petitioner for the purposes of initiation.\3\ Given the scarcity of 
information on this product, the Department has had neither the time 
nor the administrative resources to evaluate this proposed language 
prior to the initiation date. However, as discussed in the preamble to 
the Department's regulations, we are setting aside a period for 
interested parties to raise issues regarding product coverage. See 
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 
27323 (May 19, 1997). The Department encourages all interested parties 
to submit such comments by February 7, 2012, 5 p.m. Eastern Standard 
Time (EST), 20 calendar days from the signature date of this notice. 
All comments must be filed on the record of the PRC CVD investigation, 
as well as the records of the PRC and Vietnam antidumping duty 
investigations. All comments and submissions to the Department must be 
filed electronically using Import Administration's Antidumping 
Countervailing Duty Centralized Electronic Service System (IA 
ACCESS).\4\ An electronically filed

[[Page 3448]]

document must be received successfully in its entirety by the 
Department's electronic records system, IA ACCESS, by the time and date 
noted above. Documents excepted from the electronic submission 
requirements must be filed manually (i.e., in paper form) with the 
Import Administration's APO/Dockets Unit, Room 1870, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230, and stamped with the date and time of receipt by the deadline 
noted above.
---------------------------------------------------------------------------

    \3\ The Department has independent authority to determine the 
scope of its investigations. See Diversified Products Corp. v. 
United States, 572 F. Supp. 883, 887 (CIT 1983).
    \4\ See https://www.gpo.gov/fdsys/pkg/FR-2011-07-06/pdf/2011-16352.pdf for details of the Department's Electronic Filing 
Requirements, which went into effect on August 5, 2011. Information 
on help using IAACCESS can be found at https://iaaccess.trade.gov/help.aspx and a handbook can be found at https://iaaccess.trade.gov/help/Handbook%20on%20Electronic%20Filling%20Procedures.pdf.
---------------------------------------------------------------------------

    The period of scope consultations is intended to provide the 
Department with ample opportunity to consider all comments and to 
consult with parties prior to the issuance of the preliminary 
determination.

Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, on January 3, 
2012, the Department invited representatives of the Government of the 
PRC (GOC) for consultations with respect to the CVD petition. On 
January 11, 2012, the Department held consultations with 
representatives of the GOC via conference call. See Memorandum to the 
File, regarding ``Consultations with Officials of the Government of the 
People's Republic of China on the Petition for the Imposition of 
Countervailing Duties on Imports of Utility Scale Wind Towers,'' dated 
January 18, 2012 (Consultations Memorandum).

Determination of Industry Support for the Petition

    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (i) At least 
25 percent of the total production of the domestic like product; and 
(ii) more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support 
for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of 
the Act provides that, if the petition does not establish support of 
domestic producers or workers accounting for more than 50 percent of 
the total production of the domestic like product, the Department 
shall: (i) Poll the industry or rely on other information in order to 
determine if there is support for the petition, as required by 
subparagraph (A), or (ii) determine industry support using a 
statistically valid sampling method to poll the ``industry.''
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The International Trade Commission (ITC), which 
is responsible for determining whether ``the domestic industry'' has 
been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While both the Department and 
the ITC must apply the same statutory definition regarding the domestic 
like product (section 771(10) of the Act), they do so for different 
purposes and pursuant to a separate and distinct authority. In 
addition, the Department's determination is subject to limitations of 
time and information. Although this may result in different definitions 
of the like product, such differences do not render the decision of 
either agency contrary to law. See USEC, Inc. v. United States, 132 F. 
Supp. 2d 1, 8 (Ct. Int'l Trade 2001), citing Algoma Steel Corp., Ltd. 
v. United States, 688 F. Supp. 639, 644 (Ct. Int'l Trade 1988), aff'd 
865 F.2d 240 (Fed. Cir. 1989), cert. denied 492 U.S. 919 (1989).
    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition).
    With regard to the domestic like product, Petitioner does not offer 
a definition of domestic like product distinct from the scope of the 
investigation. Based on our analysis of the information submitted on 
the record, we have determined that utilty scale wind towers 
constitutes a single domestic like product and we have analyzed 
industry support in terms of that domestic like product. For a 
discussion of the domestic like product analysis in this case, see 
``Countervailing Duty Investigation Initiation Checklist: Utility Scale 
Wind Towers from the People's Republic of China'' (CVD Initiation 
Checklist) at Attachment II, dated concurrently with this notice and on 
file electronically via IA ACCESS. Access to IA ACCESS is available in 
the Central Records Unit (CRU), Room 7046 of the main Department of 
Commerce building.
    In determining whether Petitioner has standing under section 
702(c)(4)(A) of the Act, we considered the industry support data 
contained in the Petition with reference to the domestic like product 
as defined in the ``Scope of the Investigation,'' in Appendix I of this 
notice. To establish industry support, Petitioner provided its own 2010 
production of the domestic like product, and compared this to the 
estimated total production of the domestic like product for the entire 
domestic industry. See Volume I of the Petitions, at 2-3, and Exhibits 
I-3 and I-29, and First Supplement to the AD/CVD Petitions, at 5-6, and 
Supp. Exhibits I-2 and I-3; see also CVD Initiation Checklist at 
Attachment II.
    Our review of the data provided in the CVD Petition, supplemental 
submission, and other information readily available to the Department 
indicates that Petitioner has established industry support. See CVD 
Initiation Checklist at Attachment II. First, the CVD Petition 
established support from domestic producers (or workers) accounting for 
more than 50 percent of the total production of the domestic like 
product and, as such, the Department is not required to take further 
action in order to evaluate industry support (e.g., polling). See 
section 702(c)(4)(D) of the Act; see also CVD Initiation Checklist at 
Attachment II. Second, the domestic producers (or workers) have met the 
statutory criteria for industry support under section 702(c)(4)(A)(i) 
of the Act because the domestic producers (or workers) who support the 
CVD Petition account for at least 25 percent of the total production of 
the domestic like product. See CVD Initiation Checklist at Attachment 
II. Finally, the domestic producers (or workers) have met the statutory 
criteria for industry support under section 702(c)(4)(A)(ii) of the Act 
because the domestic producers (or workers) who support the CVD 
Petition account for more than 50 percent of the production of the 
domestic like product produced by that portion of the industry 
expressing support for, or opposition to, the CVD Petition. 
Accordingly, the Department determines that the CVD Petition was filed 
on behalf of the domestic industry within the meaning of section 
702(b)(1) of the Act. See id.
    The Department finds that Petitioner filed the CVD Petition on 
behalf of the domestic industry because it is an interested party as 
defined in sections 771(9)(C) and (E) of the Act and it has

[[Page 3449]]

demonstrated sufficient industry support with respect to the CVD 
investigation that it is requesting the Department initiate. See id.

Injury Test

    Because the PRC is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, section 701(a)(2) of the Act 
applies to this investigation. Accordingly, the ITC must determine 
whether imports of subject merchandise from the PRC materially injure, 
or threaten material injury to, a U.S. industry.

Allegations and Evidence of Material Injury and Causation

    Petitioner alleges that imports of utility scale wind towers from 
the PRC are benefitting from countervailable subsidies and that such 
imports are causing, or threatening to cause, material injury to the 
domestic industry producing utility scale wind towers. In addition, 
Petitioner alleges that subsidized imports exceed the negligibility 
threshold provided for under section 771(24)(A) of the Act.
    Petitioner contends that the industry's injured condition is 
illustrated by reduced market share, lost sales and revenue, reduced 
production, reduced shipments, reduced capacity utilization rate, 
underselling and price depression and suppression, reduced workforce, 
decline in financial performance, and an increase in import 
penetration. We have assessed the allegations and supporting evidence 
regarding material injury, threat of material injury, and causation, 
and we have determined that these allegations are properly supported by 
adequate evidence and meet the statutory requirements for initiation. 
See CVD Initiation Checklist at Attachment III.

Initiation of Countervailing Duty Investigation

    Section 702(b)(i) of the Act requires the Department to initiate a 
CVD proceeding whenever an interested party files a petition on behalf 
of an industry that: (1) Alleges the elements necessary for an 
imposition of a duty under section 701(a) of the Act; and (2) is 
accompanied by information reasonably available to the petitioner(s) 
supporting the allegations.
    The Department has examined the CVD Petition on utility scale wind 
towers from the PRC and finds that it complies with the requirements of 
section 702(b) of the Act. Therefore, in accordance with section 702(b) 
of the Act, we are initiating a CVD investigation to determine whether 
manufacturers, producers, or exporters of utility scale wind towers in 
the PRC receive countervailable subsidies. For a discussion of evidence 
supporting our initiation determination, see Initiation Checklist.
    We are including in our investigation the following programs 
alleged in the Petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in the PRC:

A. Grant Programs

1. Export Product Research and Development Fund
2. Subsidies for Development of ``Famous Brands'' and ``China World Top 
Brands''
3. Sub-Central Government Subsidies for Development of ``Famous 
Brands'' and ``China World Top Brands''
4. Special Energy Fund of Shandong Province
5. National Defense Science and Technology Industry Grants for the Wind 
Power Equipment Industry
6. Funds for Outward Expansion of Industries in Guangdong Province
7. Renewable Energy Development Fund
8. Special Fund for Wind Power Manufacturing Grants

B. Government Provision of Goods and Services for Less Than Adequate 
Remuneration (LTAR)

1. Government Provision of Hot-Rolled Steel for LTAR
2. Government Provision of Aluminum for LTAR
3. Government Provision of Electricity for LTAR

C. Government Provision of Land for LTAR

1. Government Provision of Land-Use Rights to State-Owned Enterpries 
for LTAR
2. Government Provision of Land-Use Rights by the Hunan Province 
Government for LTAR

D. Policy Lending to the Renewable Energy Industry

E. Income and Other Direct Tax Exemption and Reduction Programs

1. ``Two Free, Three Half'' Program for Foreign Invested Enterprises 
(FIEs)
2. Income Tax Reductions for Export-Oriented FIEs
3. Income Tax Benefits for FIEs Based on Geographic Location
4. Local Income Tax Exemption and Reduction Programs for ``Productive'' 
FIEs
5. Tax Reductions for FIEs Purchasing Chinese-Made Equipment
6. Tax Offsets for Research and Development by FIEs
7. Tax Refunds for Reinvestment of FIE Profits in Export-Oriented 
Enterprises
8. Preferential Tax Programs for FIEs Recognized as High or New 
Technology Enterprises
9. City Tax and Surcharge Exemptions for FIEs
10. Tax Reductions for High and New-Technology Enterprises Involved in 
Designated Projects
11. Preferential Income Tax Policy for Enterprises in the Northeast 
Region
12. Foregiveness of Tax Arrears for Enterprises Located in the Old 
Industrial Bases of Northeast China
13. Hunan Province Special Fund for Renewable Energy Development

F. Indirect Tax and Tariff Exemption Programs

1. Value Added Tax (VAT) Exemptions for Use of Imported Equipment
2. VAT Rebates on FIE Purchases of Chinese-Made Equipment
3. VAT and Tariff Exemptions for Purchases of Fixed Assets Under the 
Foreign Trade Development Fund Program
4. Tax Benefits for Imported Large Power Wind Turbine System Key 
Components and Raw Materials

G. Export Credit Subsidy Programs

H. Export Guarantees and Insurance for Green Technology

    For a description of each of these above-listed programs and a full 
discussion of the Department's decision to initiate an investigation of 
these programs, see Initiation Checklist.
    We are not including in our investigation the following programs 
alleged to benefit producers/exporters of the subject merchandise in 
the PRC.

A. Provincial Fund for Fiscal and Technological Innovation
B. Plans for the Development of the Industrial Cluster of Equipment 
Manufacturing in the Ningxia Region
C. Ride the Wind Program
D. National Debt Wind Power Program
E. Currency Undervaluation

    For further information explaining why the Department is not 
initiating an investigation of the above-listed program, see Initiation 
Checklist.

Respondent Selection

    For this investigation, the Department expects to select 
respondents based on U.S. Customs and Border Protection (CBP) data for 
U.S. imports during the POI. We intend to release the CBP data under 
Administrative Protective Order (APO) to all parties with access to 
information protected by APO shortly after the signature date of this 
notice. Interested parties may submit comments regarding the CBP data 
and respondent selection by 5 p.m. EST of the seventh

[[Page 3450]]

calendar day of publication of this notice. Comments should be filed 
electronically using IA ACCESS. An electronically filed document must 
be received successfully in its entirety by the Department's electronic 
records system, IA ACCESS, by the time and date noted above. Documents 
excepted from the electronic submissions requirements must be filed 
manually (i.e., paper form) with the Import Administration's APO/
Dockets Unit, Room 1870, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230, and stamped with the 
date and time of receipt by the deadline noted above.
    We intend to make our decision regarding respondent selection 
within 20 days of publication of this Federal Register notice.
    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305(b). Instructions for filing such 
applications may be found on the Department's Web site at: https://ia.ita.doc.gov/apo.

Distribution of Copies of the Petition

    In accordance with section 702(b)(4)(A)(i) of the Act and 19 CFR 
351.202(f), a copy of the public version of the Petition and amendments 
thereto have been provided to representatives of the GOC. Because of 
the particularly large number of producers/exporters identified in the 
Petition, the Department considers the service of the public version of 
the Petition to the foreign producers/exporters satisfied by the 
delivery of the public version to the GOC, consistent with 19 CFR 
351.203(c)(2).

ITC Notification

    We have notified the ITC of our initiation, as required by section 
702(d) of the Act.

Preliminary Determination by the ITC

    The ITC will preliminarily determine, within 45 days after the date 
on which the Petition was filed, whether there is a reasonable 
indication that imports of subsidized utility scale wind towers from 
the PRC are causing material injury, or threatening to cause material 
injury, to a U.S. industry. See section 703(a)(2) of the Act. A 
negative ITC determination will result in the investigation being 
terminated; otherwise, the investigation will proceed according to 
statutory and regulatory time limits.

Notification to Interested Parties

    Interested parties must submit applications for disclosure under 
administrative protective orders in accordance with 19 CFR 351.305. On 
January 22, 2008, the Department published Antidumping and 
Countervailing Duty Proceedings: Documents Submission Procedures; APO 
Procedures, 73 FR 3634. Parties wishing to participate in this 
investigation should ensure that they meet the requirements of these 
procedures (e.g., the filing of letters of appearance as discussed at 
19 CFR 351.103(d)).
    Any party submitting factual information in an AD or CVD proceeding 
must certify to the accuracy and completeness of that information. See 
section 782(b) of the Act. Parties are hereby reminded that revised 
certification requirements are in effect for company/government 
officials as well as their representatives in all segments of any AD or 
CVD proceedings initiated on or after March 14, 2011. See Certification 
of Factual Information to Import Administration during Antidumping and 
Countervailing Duty Proceedings: Interim Final Rule, 76 FR 7491 
(February 10, 2011) (Interim Final Rule) amending 19 CFR 351.303(g)(1) 
and (2). The formats for the revised certifications are provided at the 
end of the Interim Final Rule. Foreign governments and their officials 
may continue to submit certifications in either the format that was in 
use prior to the effective date of the Interim Final Rule, or in the 
format provided in the Interim Final Rule. See Certification of Factual 
Information to Import Administration During Antidumping and 
Countervailing Duty Proceedings: Supplemental Interim Final Rule, 76 FR 
54697 (September 2, 2011). The Department intends to reject factual 
submissions in any proceeding segments initiated on or after March 14, 
2011, if the submitting party does not comply with the revised 
certification requirements.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

     Dated: January 18, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.

Appendix I

Scope of the Investigation

    The merchandise covered by the investigation are certain wind 
towers, whether or not tapered, and sections thereof. Certain wind 
towers are designed to support the nacelle and rotor blades in a 
wind turbine with a minimum rated electrical power generation 
capacity in excess of 100 kilowatts and with a minimum height of 50 
meters measured from the base of the tower to the bottom of the 
nacelle (i.e., where the top of the tower and nacelle are joined) 
when fully assembled.
    A wind tower section consists of, at a minimum, multiple steel 
plates rolled into cylindrical or conical shapes and welded together 
(or otherwise attached) to form a steel shell, regardless of 
coating, end-finish, painting, treatment, or method of manufacture, 
and with or without flanges, doors, or internal or external 
components (e.g., flooring/decking, ladders, lifts, electrical buss 
boxes, electrical cabling, conduit, cable harness for nacelle 
generator, interior lighting, tool and storage lockers) attached to 
the wind tower section. Several wind tower sections are normally 
required to form a completed wind tower.
    Wind towers and sections thereof are included within the scope 
whether or not they are joined with nonsubject merchandise, such as 
nacelles or rotor blades, and whether or not they have internal or 
external components attached to the subject merchandise.
    Specifically excluded from the scope are nacelles and rotor 
blades, regardless of whether they are attached to the wind tower. 
Also excluded are any internal or external components which are not 
attached to the wind towers or sections thereof.
    Merchandise covered by the investigation are currently 
classified in the Harmonized Tariff System of the United States 
(HTSUS) under subheadings 7308.20.0020 \5\ or 8502.31.0000.\6\ Prior 
to 2011, merchandise covered by this investigation was classified in 
the HTSUS under subheading 7308.20.0000 and may continue to be to 
some degree. While the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the 
scope of the investigation is dispositive.

    \5\ Wind towers are classified under HTSUS 7308.20.0020 when 
imported as a tower or tower section(s) alone.
    \6\ Wind towers may also be classified under HTSUS 8502.31.0000 
when imported as part of a wind turbine (i.e., accompanying nacelles 
and/or rotor blades).
---------------------------------------------------------------------------

[FR Doc. 2012-1342 Filed 1-23-12; 8:45 am]
BILLING CODE 3510-DS-P