Biodiesel From Argentina: Preliminary Results of Changed Circumstances Reviews of the Antidumping and Countervailing Duty Orders, 32714-32720 [2019-14556]
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Federal Register / Vol. 84, No. 131 / Tuesday, July 9, 2019 / Notices
Dated: July 1, 2019.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and
Compliance.
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Appendix I—Scope of the Investigation
The products covered by this investigation
are primary and secondary pure and alloy
magnesium metal, regardless of chemistry,
raw material source, form, shape, or size
(including, without limitation, magnesium
cast into ingots, slabs, t-bars, rounds, sows,
billets, and other shapes, and magnesium
ground, chipped, crushed, or machined into
raspings, granules, turnings, chips, powder,
briquettes, and any other shapes).
Magnesium is a metal or alloy containing at
least 50 percent by actual weight the element
magnesium. Primary magnesium is produced
by decomposing raw materials into
magnesium metal. Secondary magnesium is
produced by recycling magnesium-based
scrap into magnesium metal. The magnesium
covered by this investigation also includes
blends of primary magnesium, scrap, and
secondary magnesium.
The subject merchandise includes the
following pure and alloy magnesium metal
products made from primary and/or
secondary magnesium: (1) Products that
contain at least 99.95 percent magnesium, by
actual weight (generally referred to as ‘‘ultrapure’’ or ‘‘high purity’’ magnesium); (2)
products that contain less than 99.95 percent
but not less than 99.8 percent magnesium, by
actual weight (generally referred to as ‘‘pure’’
magnesium); and (3) chemical combinations
of magnesium and other material(s) in which
the magnesium content is 50 percent or
greater, but less than 99.8 percent, by actual
weight, whether or not conforming to an
‘‘ASTM Specification for Magnesium Alloy.’’
The scope of this investigation excludes
mixtures containing 90 percent or less
magnesium in granular or powder form by
actual weight and one or more of certain nonmagnesium granular materials to make
magnesium-based reagent mixtures,
including lime, calcium metal, calcium
silicon, calcium carbide, calcium carbonate,
carbon, slag coagulants, fluorspar, nepheline
syenite, feldspar, alumina (A1203), calcium
aluminate, soda ash, hydrocarbons, graphite,
coke, silicon, rare earth metals/mischmetal,
cryolite, silica/fly ash, magnesium oxide,
periclase, ferroalloys, dolomite lime, and
colemanite.
The merchandise subject to this
investigation is classifiable under items
8104.11.0000, 8104.19.0000, and
8104.30.0000 of the Harmonized Tariff
Schedule of the United States (HTSUS).
Although the HTSUS items are provided for
convenience and customs purposes, the
written description of the merchandise under
investigation is dispositive.
Appendix II—List of Topics Discussed
in the Preliminary Decision
Memorandum
I. Summary
II. Background
III. Period of Investigation
IV. Postponement of Final Determination and
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Extension of Provisional Measures
V. Scope of the Investigation
VI. Scope Comments
VII. Product Characteristics
VIII. Discussion of the Methodology
IX. Date of Sale
X. Product Comparisons
XI. Export Price and Constructed Export
Price
XII. Normal Value
XIII. Currency Conversion
XIV. Verification
XV. Conclusion
[FR Doc. 2019–14557 Filed 7–8–19; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–357–820, C–357–821]
Biodiesel From Argentina: Preliminary
Results of Changed Circumstances
Reviews of the Antidumping and
Countervailing Duty Orders
Enforcement and Compliance,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(Commerce) preliminarily determines
that changed circumstances do not exist
warranting any changes under the
antidumping duty (AD) order for
biodiesel from Argentina. Commerce
also determines, however, that changed
circumstances exist warranting a change
to the cash deposit rates under the
countervailing duty (CVD) order.
DATES: Applicable July 9, 2019.
FOR FURTHER INFORMATION CONTACT:
Charlotte Baskin-Gerwitz and Kathryn
Wallace, AD/CVD Operations, Office
VII, Enforcement and Compliance,
International Trade Administration,
U.S. Department of Commerce, 1401
Constitution Avenue NW, Washington,
DC 20230; telephone: (202) 482–4880
and (202) 482–6251, respectively.
SUPPLEMENTARY INFORMATION:
AGENCY:
Background
On January 4, 2018 and April 26,
2018, Commerce published the CVD and
AD orders on biodiesel from Argentina.1
On September 21, 2018, the Government
of Argentina (GOA), joined by Vicentin
S.A.I.C. (Vicentin) and LDC Argentina
(LDC), requested that Commerce initiate
a changed circumstance review (CCR) of
the AD order, and the GOA (alone)
1 See Biodiesel from the Republic of Argentina
and the Republic of Indonesia: Countervailing Duty
Orders, 83 FR 522 (January 4, 2018), corrected by
Biodiesel from the Republic of Argentina and the
Republic of Indonesia: Countervailing Duty Orders,
83 FR 3114 (January 23, 2018); see also Biodiesel
from Argentina and Indonesia: Antidumping Duty
Orders, 83 FR 18278 (April 26, 2018).
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requested that Commerce initiate a CCR
of the CVD order, in order to have
Commerce adjust the cash deposit rates
established in the AD and CVD
investigations as a result of changes to
Argentina’s export tax regime.2 On
October 1, 2018, the National Biodiesel
Board Fair Trade Coalition (the
petitioner) filed comments requesting
that Commerce deny the GOA’s request
to initiate CCRs.3 On October 11, 2018,
the GOA, Vicentin, and LDC filed
comments responding to the petitioner’s
October 1, 2018 comments.4 On October
15, 2018, the petitioner submitted
information and data illustrating the
improvements in the domestic industry
since the imposition of the orders, and
on October 23, 2018, the petitioner
submitted further comments opposing
initiation of the CCRs.5 Between
September 26, 2018 and October 19,
2018, Commerce met with the GOA and
the petitioner to discuss their
submissions to the record.6 On
November 13, 2018, Commerce initiated
CCRs of both the AD and CVD orders to
assess the effects of the GOA’s revisions
to its export tax regime pursuant to
section 751(b)(1) of the Tariff Act of
1930, as amended (the Act) and 19 CFR
351.216.7
On November 19, 2018 and November
21, 2018, Commerce discussed the
Initiation of CCRs with the petitioner
2 See GOA’s Letter, ‘‘Biodiesel from Argentina:
Request for Changed Circumstances Review,’’ dated
September 21, 2018 and filed on the record of A–
357–820; see also GOA’s Letter, ‘‘Biodiesel from
Argentina: Request for Changed Circumstances
Review,’’ dated September 21, 2018 and filed on the
record of C–357–821 (collectively, Requests for
CCRs).
3 See Petitioner’s Letter, ‘‘Biodiesel from
Argentina: Petitioner’s Opposition to the
Government of Argentina’s Requests for Changed
Circumstances Reviews,’’ dated October 1, 2018.
4 See GOA’s Letter, ‘‘Biodiesel from Argentina:
Response to Petitioners’ Opposition to the
Government of Argentina’s Request for Changed
Circumstances Review,’’ dated October 11, 2018.
5 See Petitioner’s Letter, ‘‘Positive Impact of
Orders from Argentina on Domestic Biodiesel
Industry,’’ dated October 15, 2018; see also
Petitioner’s Letter, ‘‘Biodiesel from Argentina:
Petitioner’s Response to Respondents’ October 11,
2018 Submission,’’ dated October 23, 2018.
6 See Memorandum, ‘‘AD/CVD Orders on
Biodiesel from Argentina—Requests for Changes
{sic} Circumstance Reviews,’’ dated September 26,
2018; see also Memorandum, ‘‘Antidumping and
Countervailing Duty Orders on Biodiesel from
Argentina—Requests for Changed Circumstances
Reviews: Ex Parte Meeting,’’ dated October 4, 2018;
and Memorandum, ‘‘Antidumping and
Countervailing Duty Orders on Biodiesel from
Argentina—Requests for Changed Circumstances
Reviews: Ex Parte Meeting,’’ dated October 19,
2018.
7 See Biodiesel from Argentina: Initiation of
Changed Circumstances Reviews of the
Antidumping and Countervailing Duty Orders, 83
FR 56300 (November 13, 2018) (Initiation of CCRs).
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and the GOA, respectively.8 On
December 3, 2018, the petitioner
submitted comments regarding the
methodology it recommended
Commerce apply in conducting the AD
and CVD CCRs.9 On January 28, 2019,
Commerce exercised its discretion to
toll all deadlines affected by the partial
federal government closure from
December 22, 2018, through the
resumption of operations on January 29,
2019.10 On February 1, 2019, Commerce
issued an initial questionnaire to the
GOA.11 The GOA submitted its
responses to Commerce’s initial
questionnaire on February 21, 2019.12
On March 11, 2019, the petitioner
submitted comments on the GOA’s
initial questionnaire responses.13 On
March 20, 2019, the GOA responded to
the petitioner’s comments.14 Between
April 19, 2019 and June 6, 2019,
Commerce held three additional ex
parte meetings with the petitioner.15 On
May 16, 2019, and June 14, 2019,
Commerce held additional ex parte
meetings with the GOA.16
8 See Memorandum, ‘‘AD/CVD Orders on
Biodiesel from Argentina—Requests for Changed
Circumstance Reviews,’’ dated November 19, 2018;
see also Memorandum, ‘‘AD/CVD Orders on
Biodiesel from Argentina: Request for Changed
Circumstance Reviews,’’ dated November 27, 2018.
9 See Petitioner’s Letter, ‘‘Biodiesel from
Argentina: Petitioners’ Comments on the Conduct of
the Changed Circumstances Reviews,’’ dated
December 3, 2018.
10 See Memorandum to the Record from Gary
Taverman, Deputy Assistant Secretary for
Antidumping and Countervailing Duty Operations,
performing the non-exclusive functions and duties
of the Assistant Secretary for Enforcement and
Compliance, ‘‘Deadlines Affected by the Partial
Shutdown of the Federal Government,’’ dated
January 28, 2019. All deadlines in this segment of
the proceeding have been extended by 40 days.
11 See Commerce Letter re: Initial CCR
Questionnaire, dated February 1, 2019.
12 See GOA’s February 21, 2019 Initial
Questionnaire Response (GOA IQR).
13 See Petitioner’s Letter, ‘‘Biodiesel from
Argentina: Petitioner’s Comments on the GOA’s
Questionnaire Response,’’ dated March 11, 2019.
14 See GOA’s Letter, ‘‘Biodiesel from Argentina:
Changed Circumstance Reviews—The GOA’s
Response to the Petitioners’ Comments on the
GOA’s Questionnaire Response,’’ dated March 20,
2019.
15 See Memorandum, ‘‘Changed Circumstances
Reviews of the Antidumping and Countervailing
Duty Orders on Biodiesel from Argentina: Ex Parte
Meeting with the Petitioners,’’ dated April 19, 2019;
see also Memorandum, ‘‘Changed Circumstances
Review of the Antidumping and Countervailing
Duty Orders on Biodiesel from Argentina: Ex Parte
Meeting with the Petitioners,’’ dated May 24, 2019;
and Memorandum, ‘‘Changed Circumstances
Reviews of the Antidumping and Countervailing
Duty Orders on Biodiesel from Argentina: Ex Parte
Meeting with the National Biodiesel Board,’’ dated
June 10, 2019.
16 See Memorandum, ‘‘AD/CVD Orders on
Biodiesel from Argentina—Changed Circumstance
Reviews,’’ dated May 24, 2019; see also
Memorandum, ‘‘Changed Circumstances Review of
the Antidumping and Countervailing Duty Orders
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Scope of the Orders
The product covered by the Orders is
biodiesel from Argentina. For a
complete description of the scope of the
Orders, see the appendix to this notice.
Alleged Changed Circumstances
During the period of investigation
(POI) of the AD and CVD investigations
(January 1, 2016 through December 31,
2016), an export tax of 30 percent on
soybeans was in effect in Argentina.17 In
the AD investigation, we concluded that
the 30 percent export tax had the effect
of depressing the domestic price of
soybeans.18 We explained that a
comparison of prices within Argentina
with world prices indicated domestic
prices were nearly 40 percent lower
than world market prices.19 We
concluded that a ‘‘particular market
situation’’ (PMS) existed with regard to
the price of soybeans as an element of
the cost of production (COP) of
biodiesel in Argentina.20 Accordingly,
we adjusted the COP reported by the
respondents under investigation by
substituting a market determined price
for the price that the respondents
actually paid for soybeans in
Argentina.21
In the CVD investigation, we
concluded that domestic prices for
soybeans were below world market
on Biodiesel from Argentina: Ex Parte Meeting with
the Government of Argentina,’’ dated June 14, 2019.
17 See Biodiesel from Argentina: Preliminary
Determination of Sales at Less Than Fair Value,
Preliminary Affirmative Determination of Critical
Circumstances, in Part, 82 FR 50391 (October 31,
2017) (AD Preliminary Determination), and
accompanying Preliminary Decision Memorandum
(PDM) (AD Preliminary Determination PDM) at 23–
24, unchanged in Biodiesel from Argentina: Final
Determination of Sales at Less Than Fair Value and
Final Affirmative Determination of Critical
Circumstances, In Part, 83 FR 8837 (March 1, 2018)
(AD Final Determination) and accompanying Issues
and Decision Memorandum (IDM) (AD Final
Determination IDM); see also Biodiesel from
Argentina: Preliminary Affirmative Countervailing
Duty Determination and Preliminary Affirmative
Critical Circumstances Determination, in Part, 82
FR 40748 (August 28, 2017) (CVD Preliminary
Determination), and accompanying PDM (CVD
Preliminary Determination PDM) at 26–27,
unchanged in Biodiesel From the Republic of
Argentina: Final Affirmative Countervailing Duty
Determination, 82 FR 53477 (November 16, 2017)
(CVD Final Determination) and accompanying IDM
(CVD Final Determination IDM).
18 See AD Preliminary Determination PDM at 23–
24; see also AD Final Determination IDM at
Comment 3.
19 See AD Preliminary Determination PDM at 23–
24; see also AD Final Determination IDM at
Comment 3.
20 A so-called ‘‘cost PMS’’ is addressed by section
773(e) of the Act. See AD Preliminary
Determination and accompanying PDM at 20
(unchanged in AD Final Determination); see also
AD Final Determination IDM at Comment 3.
21 See AD Preliminary Determination PDM at 23–
24; see also AD Final Determination IDM at
Comment 3.
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prices by more than $100 per metric ton,
depending on the month, as a result of
the export tax on soybeans.22 We also
concluded that ‘‘the effect on soybean
prices paid by the respondents is not
incidental to, but a direct result of, a
system designed by the GOA to ensure
the availability of relatively low-priced
soybeans for domestic processing
industries, notably the biodiesel
industry.’’ 23 We explained that the
GOA had stated ‘‘export duties are a
valid development tool, since they
enable many developing countries to
cease being mere suppliers of raw
materials,’’ 24 and that the intention of
its adjustment to the export tax on
soybeans was to reduce domestic
soybean prices in the context of rising
world market prices.25 We thus
concluded that the GOA entrusts or
directs private parties (i.e., soybean
growers) to provide soybeans to
processing industries, including the
biodiesel industry, at less than adequate
remuneration (LTAR), within the
meaning of section 771(5)(B)(iii) of the
Act.26 Because the record also indicated
the subsidy was specific (section
771(5A)(D)(iii)(I) of the Act) and
provided a benefit (section 771(5)(E)(iv)
of the Act and 19 CFR 351.511(a)(1)), we
determined the subsidy was
countervailable.27
In its CCR requests, the GOA asserts
that significant changes to its export tax
regime warrant reconsideration of the
cash deposit rates established in the AD
and CVD final determinations.28 The
GOA provided information indicating
that, since the POIs, changes in the
export tax regime have been effectuated,
which was a key element in Commerce’s
analysis of: (1) The PMS finding
concerning the cost of soybean input
prices in the AD investigation; and (2)
the soybeans for LTAR program in the
CVD investigation.29 In particular, the
GOA attached four legislative decrees
effecting changes across its export tax
regime, including changes to the export
22 See
CVD Preliminary Determination PDM at 30.
at 29.
24 Id.; see also the Petition, dated March 23, 2017,
at Volume I (CVD Petition) at CVD–ARG–08 (the
GOA’s statements to the World Trade Organization
(WTO) in ‘‘Trade Policy Review Report by the
Secretariat: Argentina (Revision)’’ WT/TPR/S/277/
Rev.1 (June 14, 2013)) (placed on the record of these
segments by Memorandum, ‘‘Additional
Information Concerning the Preliminary Changed
Circumstances Reviews of Biodiesel,’’ July 1, 2019
(Additional Information Memo)).
25 See CVD Preliminary Determination PDM at 29.
26 Id. at 29.
27 Id. at 29–30.
28 See Requests for CCRs at 1–2.
29 Id. at 2 and 4; see also AD Final Determination
IDM at Comment 3 and CVD Final Determination
IDM at Comment 1, which discussed these aspects
of the final determinations.
23 Id.
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taxes applied to soybeans and their
derivative products, including biodiesel:
(1) Decree 1343/2016 (December 30,
2016), introducing monthly reductions
of 0.5 percent to the export taxes on
soybeans, soybean oil, soymeal, and
soybean pellets, beginning in January
2018; 30
(2) Decree 1025/2017 (December 12,
2017), raising the export tax on
biodiesel from zero to 8 percent,
effective January 1, 2018; 31
(3) Decree 468/2018 (May 24, 2018),
further raising the export tax on
biodiesel from 8 to 15 percent, effective
July 1, 2018; 32 and,
(4) Decree 793/2018 (September 3,
2018), further reducing the export tax on
soybeans, soybean oil, and soymeal to
18 percent, effective September 4,
2018.33
Decree 793/2018, in addition to
decreasing the export tax on soybeans,
imposed new, temporary taxes on all
products exported from Argentina,
equating to an additional 10.3 percent
tax for exports of both soybeans and
biodiesel.34 Thus, as a result of the four
decrees, as of September 2018, the
export tax on soybeans stood at 28.3
percent (nearly identical to where it was
during the POIs) and the export tax on
biodiesel stood at 25.3 percent (versus
3.96 percent through May 2016 and 5.04
percent from June 2016 until June 2017,
at which point it was lowered to zero).35
According to the decrees, the changes
to the tax rates were ‘‘necessary to
continue fostering the convergence
between the export tax applicable to
{soybeans, soybean oil, soymeal} and
that applicable to biodiesel,’’ 36 and ‘‘in
order to, among other objectives,
implement the monetary, exchange or
foreign trade policy, to stabilize internal
prices and to address public financial
needs.’’ 37 The preamble of Decree 793/
2018 references an underlying statutory
regime, as well as the GOA’s 2018
national budget, noting concerns with
ensuring ‘‘fiscal convergence, an
efficient tax policy and the gradual
reduction of the tax burden.’’ 38
Additionally, in response to a request
from Commerce, the GOA provided its
economic reform proposal, as submitted
30 See
Requests for CCRs at Attachment 1.
GOA IQR at Appendix V.
32 See Requests for CCRs at Attachment 3.
33 Id. at Attachment 2.
34 See GOA IQR at 3–4.
35 See the Petition at Exhibit CVD–ARG–05
(placed on the record of these segments by
Additional Information Memo).
36 See Decree 486/2018; see also Requests for
CCRs at Attachment 3.
37 See Decree 793/2018; see also Requests for
CCRs at Attachment 2.
38 See Decree 793/2018.
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31 See
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to the International Monetary Fund
(IMF),39 as support for its claims that
the export tax revisions are ‘‘aimed at
reaching a gradual convergence between
the export tax applicable to soybeans,
soybean oil and soymeal that are
applicable to biodiesel. In addition, they
served revenue-collection purposes and
also pursued the stabilization of internal
prices, in light of a dire financial
situation during 2018 and the steep
devaluation of the national currency.’’ 40
Legal Framework
Pursuant to section 751(b)(1) of the
Act, and 19 CFR 351.216(d), Commerce
will conduct a CCR of an AD or CVD
order upon receipt of a request from an
interested party which demonstrates
changed circumstances sufficient to
warrant such a review. Section 751(b)(4)
of the Act also provides that Commerce
may not conduct a CCR of an
investigation determination within 24
months of the date of the investigation
determination in the absence of ‘‘good
cause.’’ Section 351.216 of Commerce’s
regulations, as well as 19 CFR 351.221,
provide rules governing the conduct of
CCRs.
Neither the statute nor the regulation
provide a definition of ‘‘changed
circumstances’’ nor explain what
aspects of a determination may be
reconsidered in light of such changed
circumstances. In practice, Commerce
has conducted CCRs to address a wide
variety of issues, which have resulted in
various determinations, including
changes to cash deposit rates.41 Where
Commerce determines to conduct a CCR
within 24 months of an investigation
final determination, the purpose is not
to reconsider the validity of the
determinations made in the AD or CVD
investigations, which were based on the
circumstances in existence during the
POIs. Rather, the purpose of the CCRs is
39 See GOA IQR at Appendix III (Letter to
Christine Lagarde, Managing Director, IMF, ‘‘Letter
of Intent, Memorandum of Economic and Financial
Policies, and Technical Memorandum of
Understanding,’’ dated October 17, 2018 (IMF
Proposal)).
40 Id. at 1.
41 See, e.g., Aluminum Extrusions from the
People’s Republic of China: Final Results of
Expedited Changed Circumstances Review, 83 FR
45609 (September 10, 2018) (finding sufficient
information of changed circumstances to recalculate
certain cash deposit rates); Certain Steel Nails From
Malaysia: Final Results of Antidumping Duty
Changed Circumstances Review, 82 FR 34476 (July
25, 2017) (finding sufficient information of changed
circumstances to collapse certain entities and to
utilize the correct cash deposit rate); and Final
Results of Changed Circumstances Administrative
Reviews; Pure Magnesium and Alloy Magnesium
From Canada, 57 FR 54047 (November 16, 1992)
(finding sufficient information to determine
changed circumstances to the major subsidy
program at issue in the underlying investigation).
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to consider whether circumstances have
changed since the end of the POIs such
that the cash deposit rates established
by the final determinations (and put
into effect by the Orders) are no longer
the best estimates of prospective
dumping and subsidization and
therefore are no longer appropriate for
purposes of collecting deposits.
AD Analysis
Commerce preliminarily finds that
there are insufficient changed
circumstances warranting a
reconsideration related to the AD Final
Determination. As described above,
Commerce determined that a PMS
existed in Argentina with regard to the
price of soybeans as a constituent
element of the COP of biodiesel in
Argentina.42 The Trade Preferences
Extension Act of 2015 43 added language
to section 773(e) of the Act, which states
that ‘‘if a particular market situation
exists such that the cost of materials and
fabrication or other processing of any
kind does not accurately reflect the cost
of production in the ordinary course of
trade, the administering authority may
use another calculation methodology
under this subtitle or any other
calculation methodology.’’
In this context, we determined that
the GOA’s intervention in soybean
pricing through the export tax of 30
percent on soybeans rendered the
domestic price of soybeans paid by
respondent biodiesel producers outside
the ordinary course of trade.44 This PMS
finding involved: (1) Numerous studies
indicating that the export tax on
soybeans was designed to generate a
low-cost surplus of soybeans for
domestic use, thereby artificially
depressing soybean prices for domestic
consumption; (2) the fact that the export
tax on soybeans was not intended as an
ordinary revenue measure, but rather
was unique to soybeans, as soybeans
were the only commodity subject to an
export tax during the POI; and (3) record
evidence that Argentine prices for
soybeans were nearly 40 percent lower
than world market prices for soybeans
during the POI.45 Accordingly, based on
the totality of the circumstances,
Commerce rejected the prices paid by
the respondents in the AD investigation
as part of the COP calculation, as they
did ‘‘not accurately reflect the cost of
42 See
AD Preliminary Determination PDM at 24.
Trade Preferences Extension Act of 2015,
Public Law 114–27, 129 Stat. 362 (2015).
44 See AD Preliminary Determination PDM at 23–
24; see also AD Final Determination IDM at
Comment 3.
45 See AD Preliminary Determination PDM at 23–
24; see also AD Final Determination IDM at
Comment 3.
43 See
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production in the ordinary course of
trade,’’ and replaced these prices with a
market-determined price.46
For purposes of this CCR, record
evidence shows soybean prices in
Argentina still remain well below world
market prices. Specifically, according to
the GOA’s data, since September 2018
(when the export tax on biodiesel was
raised to 25.3 percent), the gap between
domestic and world prices has ranged
between $50 per ton to nearly $100 per
ton, or, in terms of a percentage,
domestic prices have been 30 percent
lower than world prices since last
September.47 This is almost the same
gap that existed during the POI.48
While the GOA speculates that the
relationship between domestic and
world prices is the result of several
factors, such as currency fluctuations,
trade measures imposed by China on
U.S. soybean shipments, and the
weather, it provided no studies,
publications, or detailed analyses
demonstrating whether such factors
might explain the current gap between
prices.49 Instead, the GOA argues that it
is impossible to isolate the effects of any
one cause. However, evidence on the
record demonstrates that there is a
discernible correlation between the size
of the so-called price gap and the
amount of the export tax. For instance,
from 1994 through 2001 (when the
export tax rate was 3.5 percent),
domestic soybean prices in Argentina
were slightly less than the world
soybean price.50 In 2001, the difference
in prices was $26 per metric ton.51 By
the end of 2002, after the export tax
increased to 23.5 percent, the difference
between Argentine domestic soybean
prices and world market prices had
grown to nearly $50 a metric ton.52
Between 2003 and 2006, the average
price differential increased to over $100
per metric ton.53 In 2007, when the
GOA increased the export tax from 23.5
46 See AD Preliminary Determination PDM at 23–
24; see also AD Final Determination IDM at
Comment 3.
47 See GOA IQR at 14.
48 See AD Final Determination IDM at Comment
3; see also Petitioner’s Letter, ‘‘Petitioner’s
Particular Market Situation Allegation Regarding
Respondent’s Home and Third Country Market
Sales and Cost of Production,’’ dated August 2,
2017 (placed on the record of these segments by
Additional Information Memo) at 45 and Exhibit
37–B.
49 See GOA IQR at 11–12. The GOA states that it
‘‘doubts’’ the export tax has had a significant effect
on prices.
50 See CVD Petition at 26 (placed on the record
of these segments by Additional Information
Memo).
51 Id. at CVD–ARG–21 (placed on the record of
these segments by Additional Information Memo).
52 Id.
53 Id.
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percent to 35 percent, the price
differential increased to $165 per metric
ton.54 The price differential increased to
$200 per metric ton in 2015.55 In 2016,
after the GOA reduced the export tax to
30 percent, the price differential
decreased to $146 per metric ton. More
recently, as the GOA began reducing the
export tax by 0.50 percent per month in
January 2018, the gap began closing.56
After the GOA increased the export tax
to 28.3 percent in September 2018, the
gap began expanding once again,
approaching $100 per metric ton in
January 2019. In any event, as we
indicated in the AD Final Determination
in response to a similar argument by the
Vicentin Group, the PMS provisions of
the Act do not require a strict causal
finding between the distortive
government action and the observed
distorted price.57
In addition, as noted, multiple
publications on the record of the AD
investigation concluded that the export
tax leads to lower soybean prices (and
was intended to do so).58 The GOA has
provided no evidence in the form of
studies, publications, or detailed
analyses to undermine these
publications, or to demonstrate that the
export tax on soybeans no longer
impedes external trade and competitive
domestic pricing for soybeans.
We recognize that the record indicates
that the design and structure of the
export tax regime has changed, which
affects the ‘‘ordinary revenue measure’’
prong of our PMS analysis in the AD
investigation. Specifically, in the AD
Final Determination, we found that the
export tax regime was not part of an
ordinary revenue measure, as it was
unique to soybeans—the only
commodity product subject to an export
tax during the POI.59 The record of this
CCR demonstrates that is no longer the
case. As discussed above, Decree 1025/
2017 and Decree 468/2018 increased the
export tax on biodiesel from zero to 15
percent, while Decree 793/2018, in
addition to decreasing the export tax on
soybeans, imposed new, temporary
taxes on all products exported from
Argentina.60 Thus, we find that the
export tax is no longer designed for
54 Id.
55 Id.
56 See GOA IQR at 13 (comparison of Argentine
prices with Chicago commodities exchange prices)
and 4 (Table 1: Export Tax Rates).
57 See AD Final Determination IDM at Comment
3.
58 See AD Preliminary Determination PDM at 23–
24; see also AD Final Determination IDM at
Comment 3.
59 See AD Final Determination IDM at Comment
3.
60 See GOA IQR at 3–4, Appendix V; see also
Requests for CCRs at Attachments 2 and 3.
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32717
downstream development purposes, but
is part of an overall revenue
improvement measure and a tax scheme
applied to exports of both agricultural
and industrial commodities.
Nevertheless, after reviewing the
record evidence in this CCR under the
totality of circumstances analysis of the
AD investigation, we find that there
remains a price gap that still exists
between domestic and world prices, as
a result of the export tax on soybeans,
which continues to impede external
trade and competitive domestic pricing
for soybeans. Thus, we find that there
are insufficient changed circumstances
to warrant a reconsideration of our
finding that the GOA’s intervention in
soybean pricing through the export tax
on soybeans renders prices paid by
biodiesel producers outside the ordinary
course of trade. The internal soybean
market is still clearly distorted by GOA
intervention and therefore a PMS still
exists.
We also find that our PMS analysis is
unaffected by the imposition of a
specific export tax on biodiesel. As
noted above, during the POI there was
an export tax on biodiesel of 3.96
percent through May 2016 and 5.04
percent from June 2016 until the end of
the POI in December 2016.61 After
dropping down to zero, the export tax
is now 25.3 percent, as compared to the
soybean export tax of 28.3 percent. We
find that an export tax on soybeans
continues to artificially depress soybean
prices for domestic consumption,
regardless of the presence or magnitude
of an export tax on biodiesel. Simply
put, Argentine soybean growers
continue to accept depressed domestic
prices rather than exporting and paying
a significant export tax.
CVD Analysis
In the CVD investigation, Commerce
examined an allegation that soybeans
were provided for LTAR through
soybean export restraints, which the
CVD Petition described as ‘‘high export
taxes and other regulations relating to
soybeans,’’ 62 which entrust and direct
soybean growers to provide a subsidy
‘‘benefiting the industry under
investigation.’’ 63 In the CVD
Preliminary Determination, Commerce
determined that the export tax on
soybeans amounted to a countervailable
61 See CVD Petition at Exhibit CVD–ARG–05
(placed on the record of these segments by
Additional Information Memo).
62 Id. at 16 (placed on the record of these
segments by Additional Information Memo).
63 Id. at 17 (placed on the record of these
segments by Additional Information Memo).
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subsidy because, among other reasons,64
the GOA ‘‘entrusted or directed’’ a
private entity (i.e., soybean growers) to
make a financial contribution, pursuant
to section 771(5)(B)(iii) of the Act, in the
form of the provision of goods or
services to biodiesel producers for
LTAR, pursuant to sections
771(5)(D)(iii) and 771(5)(E)(iv) of the
Act.65 We explained that where, as was
the case in the underlying investigation
and is still the case here, there is no
‘‘direct legislation to entrust or direct
private parties to provide a financial
contribution,’’ Commerce may ‘‘rely on
circumstantial information to determine
that there was entrustment or
direction.’’ 66 We further explained that,
in such a situation, Commerce employs
a two-part test examining the relevant
policy and practices of the foreign
government.67 Specifically, Commerce
looks to: (1) Whether the government
has in place during the relevant period
a governmental policy to support the
respondent(s); and (2) whether evidence
on the record establishes a pattern of
practices on the part of the government
to act upon that policy to entrust or
direct the associated private entity
decisions.68 We then evaluated the
record and determined that the export
tax on soybeans constituted ‘‘a policy to
support production of biodiesel and
other domestic processing
industries,’’ 69 and that ‘‘{t}he effect on
soybean prices paid by the respondent
is not incidental to, but a direct result
of, a system designed by the GOA to
ensure the availability of relatively lowpriced soybeans for domestic processing
industries, notably the biodiesel
industry.’’ 70 In other words, Commerce
concluded the program existed to
‘‘provide{ } an incentive for the
development of domestic manufacturing
or processing industries with higher
value-added exports,’’ 71 such as
biodiesel production. This conclusion
was derived from an examination of the
‘‘pertinent GOA laws and regulations’’
as well as other, third-party evidence
indicating the program was a
‘‘development tool’’ designed ‘‘to help’’
64 Commerce also found that the provision of
soybeans was specific and provided a benefit.
65 See CVD Preliminary Determination PDM at 30.
66 Id. at 28 (citing Supercalendered Paper from
Canada: Final Affirmative Countervailing Duty
Determination, 80 FR 63535 (October 20, 2015) and
accompanying IDM at 125).
67 See CVD Preliminary Determination PDM at 28.
The CIT affirmed Commerce’s approach in Hynix
Semiconductor, Inc. v. United States, 391 F. Supp.
2d 1337 (CIT 2005), aff’d after remand 425 F. Supp.
2d 1287 (CIT 2006).
68 See CVD Preliminary Determination PDM at 28.
69 Id. at 29.
70 Id.
71 Id.
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downstream producers.72 Thus, the
focus is not on whether the program has
led to lower input prices, but whether
the program is designed and structured
to entrust and direct soybean producers
to provide Argentine biodiesel
producers with soybeans for LTAR.73
We preliminarily determine that the
evidence that supported a finding of
entrustment and direction in the
original investigation no longer exists.
Based on the record before us, we no
longer find that Argentina’s export tax
regime is designed and structured to
encourage the development of the
downstream biodiesel industry or to
benefit the respondents. This is based
on the changes cited by the GOA to the
export tax on soybeans as well as to the
export taxes on downstream products
(including biodiesel) for which
soybeans are a major input.74 Contrary
to the petitioner’s contention that the
export tax on biodiesel is irrelevant to
both the AD and CVD CCRs, Commerce
preliminarily concludes that the
analytical framework for finding
‘‘entrustment and direction’’ of private
parties (as described above), which is
concerned with more than the existence
of distorted prices, and the record of the
CVD investigation itself, indicate that
we should consider the export tax on
biodiesel in relation to the export tax on
soybeans.75 As discussed above, the
CVD Petition describes the allegation as
being based on the export tax on
soybeans and other regulations relating
to soybeans, and also repeatedly refers
to the importance of the difference
between the level of export taxation on
soybeans compared to downstream
products such as biodiesel.76 This same
approach, examining the totality of
record information and the unique
circumstances of the case, was taken in
the CVD Initiation Checklist, where
Commerce concluded:
The overall configuration of the GOA’s
export taxes, including the differences
between export taxes on soybeans and
72 Id.
73 In the CVD Initiation Checklist, we noted that
the ‘‘Biofuels Law’’ is intended to ‘‘promote and
control sustainable biofuel production and use.’’
See CVD Initiation Checklist at 8–9 (emphasis in
the original) (placed on the record of these segments
by Additional Information Memo); see also Petition
at CVD–ARG–27 (‘‘Regime to Regulate and Promote
Sustainable Biofuel Product and Use,’’ Law 26,093
(April 19, 2006) (placed on the record of these
segments by Additional Information Memo).
74 See CVD Initiation Checklist at 7.
75 By comparison, in the PMS analysis
undertaken in the AD investigation, as discussed
above, we are concerned simply with whether the
GOA’s intervention has led to distorted prices that
are outside the ordinary course of trade.
76 See CVD Petition at 19–23 (placed on the
record of these segments by Additional Information
Memo).
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soybean derivatives, in addition to the intent
of the biofuels law to promote the production
of and use of biofuels, and to benefit ‘‘all
projects for the establishment of biofuel
industries,’’ indicates that the GOA has
implemented the export taxes with the intent
of entrusting and directing soybean suppliers
to provide a financial contribution to
biodiesel producers.77
The significance of the relationship
between the two taxes is apparent
elsewhere on the record of the
investigation, including the third-party
assessments submitted by the petitioner
to support the allegation and examined
by Commerce during the
investigation.78 For example, at the
outset of our analysis of the program in
the CVD Preliminary Determination,
Commerce highlights three third-party
sources. Each source references the
differential as being important if the
design of the scheme is to benefit
downstream producers:
• International Renewable Energy
Agency, ‘‘Renewable Energy Policy
Brief—Argentina,’’ dated June 2015:
‘‘Differential export taxes for biofuels
versus other products derived from the
same feedstock promoted the export of
biofuels, especially biodiesel. For
example, in 2008 export taxes were 35%
for soy bean, 32% for soy oil, but only
5% for biodiesel.’’ 79
• USDA Foreign Agricultural Service,
‘‘Argentina Biofuels Annual,’’ dated July
7, 2016: ‘‘A factor which contributed to
the expansion of the local biodiesel
industry since its beginnings has been
the differential export tax on biodiesel
vis-a-vis soybean oil. Soybean oil
exports are currently taxed 27 percent
while biodiesel exports are taxes 5.04
percent.’’ 80
• OECD Trade Policy Studies, ‘‘The
Economic Impact of Export Restrictions
on Raw Materials,’’ dated 2010: ‘‘Export
restrictions provide downstream
processing industries with an
advantage. Differential export duty rates
play an important role in this regard:
higher rates for raw materials or input
products while lower rates apply for
finished products. For example, in
Argentina the export duty rates for
soybean, soybean oil and biodiesel were
27.5%, 24.5%, and 5% respectively as
of 2007. The price advantage provided
to domestic downstream industries can
distort and reduce competition in both
domestic and foreign markets.’’ 81
77 See CVD Initiation Checklist at 9 (emphasis
added).
78 See CVD Preliminary Determination PDM at
25–26.
79 See CVD Petition at Exhibit CVD–ARG–03.
80 Id. at Exhibit CVD–ARG–05.
81 Id. at Exhibit CVD–ARG–07 (emphasis added).
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Thus, we preliminarily determine that
the convergence of the export tax rates
on soybeans and biodiesel demonstrates
that the tax regime as it pertains to
soybeans and its derivatives is no longer
about benefitting or encouraging the
development of the domestic biodiesel
industry. The shift in the design is also
evident from the economic reform
proposal Argentina has submitted to the
IMF, corroborating the GOA’s claims
that it has shifted the focus of its export
tax program from selective economic
development to general revenue
collection and economic stability. In
relevant part, the proposal, dated
October 17, 2018, states:
• New and increased export taxes are
one of two fiscal measures adopted by
Argentina as a means of fairly achieving
revenue gains and the macroeconomic
and financial objectives promised to the
IMF (the other being a wealth tax).82
• The GOA has ‘‘unraveled a myriad
of economic distortions put in place by
the previous administration,’’ 83 and
pledges to continue ‘‘revisions to the
current distortive systems of taxes and
subsidies.’’ 84
• The commitments are part of a
request to the IMF for access to an
additional $7.1 billion in reserve
financing, and a recognition that
Argentina must ‘‘no longer live beyond
its means’’ and must ‘‘spend only what
it can raise in taxes.’’ 85
The OECD report referenced above
also states that in Argentina export taxes
have historically been an important
source of revenue, unlike in other
countries where they have been used
primarily as a development tool, thus
supporting Argentina’s characterization
of the revised tax regime.
Given this change, Commerce
preliminarily determines that the
current program provides no third-party
financial contribution through an
entrustment and direction mechanism
and is therefore, as currently designed,
not countervailable. Therefore,
Commerce preliminarily determines to
lower the CVD cash deposit rates by the
amount determined for the program in
the CVD final determination.
Preliminary Results of Changed
Circumstances Reviews
Pursuant to section 751(b) of the Act
and 19 CFR 351.216, Commerce
preliminarily determines that changed
circumstances do not exist warranting
any changes under the AD order, but
that changed circumstances do exist
warranting recalculation of the total
CVD cash deposit rates as follows:
Subsidy rate
determined for
the provision of
soybeans
(percent)
Total subsidy
rate under the
CVD order
(percent)
LDC Argentina S.A ..........................................................................................................
Vicentin S.A.I.C ................................................................................................................
All Others * .......................................................................................................................
72.28
71.45
71.87
Revised total
subsidy rate
pursuant to
the CCR
(percent)
72.09
61.15
n/a
0.19
10.30
10.30
* Because the revised cash deposit rate determined for LDC Argentina S.A. is de minimis, we have based the all others rate exclusively on the
rate for Vicentin S.A.I.C.
khammond on DSKBBV9HB2PROD with NOTICES
Cash Deposits
If the revised cash deposit rates
indicated above are maintained for the
final results of the CVD CCR, Commerce
will issue instructions to U.S. Customs
and Border Protection (CBP) revising the
cash deposits applied to all entries of
subject merchandise entered, or
withdrawn from warehouse, for
consumption, on or after the date of
publication of the final results in the
Federal Register. Commerce will
instruct CBP not to collect cash deposits
for producers or exporters determined to
have a total subsidy rate below de
minimis. Commerce will instruct CBP to
continue to suspend all entries of
subject merchandise regardless of
whether any rate determined pursuant
to the final results of these CCRs is zero
or de minimis, and such entries will be
subject to administrative review if one
is requested.
If the above preliminary results are
maintained for the final results of the
AD CCR, Commerce will not issue
instructions to CBP under the AD order
as no changes to the cash deposit rates
need to be effectuated.
Public Comment
Interested parties may submit case
briefs no later than 30 days after the
date of publication of these preliminary
results of review in the Federal
Register.86 Rebuttal briefs, limited to
issues raised in the case briefs, may be
filed by no later than five days after the
deadline for filing case briefs.87 Parties
that submit case or rebuttal briefs are
encouraged to submit with each
argument: (1) A statement of the issue;
(2) a brief summary of the argument;
and (3) a table of authorities.88 All briefs
are to be filed electronically using
ACCESS.89 An electronically filed
document must be received successfully
in its entirety by ACCESS by 5:00 p.m.
Eastern Time on the day on which it is
due.90
Any interested party may submit a
request for a hearing to the Assistant
Secretary of Enforcement and
Compliance using ACCESS within 30
days of publication of this notice in the
Proposal at 2.
at 4.
84 Id. at 6.
85 Id. at 4.
Final Results of the Review
Unless extended, in accordance with
19 CFR 351.216, Commerce intends to
issue the final results of this CCR not
later than 270 days after the date on
which the review was initiated.
Notification to Interested Parties
Commerce is issuing these results in
accordance with sections 751(b)(1) and
777(i) of the Act and 19 CFR 351.216
and 351.221(c)(3)(i).
82 IMF
86 See
90 See
83 Id.
87 See
91 See
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17:47 Jul 08, 2019
19 CFR 351.309(c)(1)(ii).
19 CFR 351.309(d)(1).
88 See 19 CFR 351.309(c)(2) and (d)(2).
89 See 19 CFR 351.309(b) and (f).
Federal Register.91 Hearing requests
should contain the following
information: (1) The party’s name,
address, and telephone number; (2) the
number of participants; and (3) a list of
the issues to be discussed. Oral
presentations will be limited to issues
raised in the briefs.92 If a request for a
hearing is made, parties will be notified
of the time and date of the hearing,
which will be held at the U.S.
Department of Commerce, 1401
Constitution Avenue NW, Washington,
DC 20230.93
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19 CFR 351.303(b).
19 CFR 351.310(c).
92 Id.
93 See
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Dated: July 1, 2019.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and
Compliance.
results of this review.2 Commerce also
exercised its discretion to toll all
deadlines affected by the partial federal
government closure from December 22,
2018 through the resumption of
operations on January 29, 2019.3 On
June 3, 2019, Commerce again extended
the deadline for the final results.4 Thus,
the deadline for the final results of this
administrative review is June 21, 2019.
Commerce conducted this review in
accordance with section 751(a) of the
Tariff Act of 1930, as amended (the Act).
[FR Doc. 2019–14556 Filed 7–8–19; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–580–883]
Certain Hot-Rolled Steel Flat Products
From the Republic of Korea: Final
Results of Antidumping Duty
Administrative Review; 2016–2017
Enforcement and Compliance,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(Commerce) determines that certain hotrolled steel flat products (hot-rolled
steel) from the Republic of Korea
(Korea) were sold in the United States
at less than normal value (NV) during
the period of review (POR) March 22,
2016 through September 30, 2017.
DATES: Effective July 9, 2019.
FOR FURTHER INFORMATION CONTACT:
Benito Ballesteros or Justin Neuman,
AD/CVD Operations, Office V,
Enforcement and Compliance,
International Trade Administration,
U.S. Department of Commerce, 1401
Constitution Avenue NW, Washington,
DC 20230; telephone: (202) 482–7425 or
(202) 482–0486, respectively.
SUPPLEMENTARY INFORMATION:
AGENCY:
Background
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On November 14, 2018, Commerce
published the Preliminary Results of
this review in the Federal Register.1
Commerce conducted verification of
mandatory respondents, Hyundai Steel
Company (Hyundai Steel) and POSCO,
and certain U.S. affiliates in March and
April 2019. In accordance with 19 CFR
351.309, we invited interested parties to
comment on the Preliminary Results.
Between May 21, 2019 and June 10,
2019, Commerce received timely filed
case and rebuttal briefs from various
interested parties.
On December 21, 2018, Commerce
extended the deadline for the final
1 See Certain Hot-Rolled Steel Flat Products from
the Republic of Korea: Preliminary Results of
Antidumping Duty Administrative Review; 2016–
2017, 83 FR 56821 (November 14, 2018)
(Preliminary Results), and accompanying
Preliminary Decision Memorandum (PDM).
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Scope of the Order
The product covered by this review is
hot-rolled steel from Korea. For a full
description of the Scope, see the Issues
and Decision Memorandum.5
Analysis of Comments Received
We addressed all issues raised in the
case and rebuttal briefs in the Issues and
Decision Memorandum, which is hereby
adopted by this notice. The issues are
identified in the Appendix to this
notice. The Issues and Decision
Memorandum is a public document and
is on file electronically via Enforcement
and Compliance’s Antidumping and
Countervailing Duty Centralized
Electronic Service System (ACCESS).
ACCESS is available to registered users
at https://access.trade.gov and in the
Central Records Unit, Room B8024 of
the main Commerce building. In
addition, a complete version of the
Issues and Decision Memorandum can
be accessed directly on the internet at
https://enforcement.trade.gov/frn/
index.html. The signed Issues and
Decision Memorandum and the
electronic version of the Issues and
Decision Memorandum are identical in
content.
2 See Memorandum, ‘‘Certain Hot-Rolled Steel
Flat Products from the Republic of Korea: Extension
of Deadline for Final Results of Antidumping Duty
Administrative Review,’’ dated December 21, 2018.
3 See Memorandum to the Record from Gary
Taverman, Deputy Assistant Secretary for
Antidumping and Countervailing Duty Operations,
performing the non-exclusive functions and duties
of the Assistant Secretary for Enforcement and
Compliance, ‘‘Deadlines Affected by the Partial
Shutdown of the Federal Government,’’ dated
January 28, 2019. All deadlines in this segment of
the proceeding have been extended by 40 days.
4 See Memorandum, ‘‘Certain Hot-Rolled Steel
Flat Products from the Republic of Korea: Extension
of Deadline for Final Results of Antidumping Duty
Administrative Review,’’ dated June 3, 2019.
5 See Memorandum, ‘‘Certain Hot-Rolled Steel
Flat Products from the Republic of Korea: Issues
and Decision Memorandum for the Final Results of
the 2016–2017 Antidumping Duty Administrative
Review,’’ dated concurrently with this notice
(Issues and Decision Memorandum).
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Changes Since the Preliminary Results
Based on our review and analysis of
the comments received and our findings
at verification, we made certain changes
to the margin calculations for both
Hyundai Steel and POSCO. For a
discussion of these changes, see the
Issues and Decision Memorandum.
Rate for Non-Examined Companies
The statue and Commerce’s
regulations do not address the
establishment of a rate to be applied to
companies not selected for individual
examination when Commerce limits its
examination in an administrative review
pursuant to section 777A(c)(2) of the
Act. Generally, Commerce looks to
section 735(c)(5) of the Act, which
provides instructions for calculating the
all-others rate in a market economy
investigation, for guidance when
calculating the rate for companies
which were not selected for individual
examination in an administrative
review. Under section 735(c)(5)(A) of
the Act, the all-others rate is normally
‘‘an amount equal to the weighted
average of the estimated weighted
average dumping margins established
for exporters and producers
individually investigated, excluding any
zero or de minimis margins, and any
margins determined entirely {on the
basis of facts available}.’’
For these final results, we calculated
a weighted-average dumping margin
that is not zero, de minimis, or
determined entirely on the basis of facts
available for Hyundai Steel and POSCO.
Accordingly, Commerce has assigned to
the companies not individually
examined a margin of 7.78 percent,
which is the simple average of Hyundai
Steel’s and POSCO’s calculated
weighted-average dumping margins for
these final results.6
Final Results of Review
Commerce determines that the
following weighted-average dumping
margins exist for the period March 22,
2016 through September 30, 2017:
6 For more information regarding the calculation
of this margin, see Memorandum, ‘‘Calculation of
the Margin for Non-Examined Companies,’’ dated
June 21, 2019. Because we cannot apply our normal
methodology of calculating a weighted-average
margin due to requests to protect business
proprietary information, we find this rate to be the
best proxy of the actual weighted-average margin
determined for the individually-examined
respondents.
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]]>Agencies
[Federal Register Volume 84, Number 131 (Tuesday, July 9, 2019)]
[Notices]
[Pages 32714-32720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14556]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-357-820, C-357-821]
Biodiesel From Argentina: Preliminary Results of Changed
Circumstances Reviews of the Antidumping and Countervailing Duty Orders
AGENCY: Enforcement and Compliance, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (Commerce) preliminarily determines
that changed circumstances do not exist warranting any changes under
the antidumping duty (AD) order for biodiesel from Argentina. Commerce
also determines, however, that changed circumstances exist warranting a
change to the cash deposit rates under the countervailing duty (CVD)
order.
DATES: Applicable July 9, 2019.
FOR FURTHER INFORMATION CONTACT: Charlotte Baskin-Gerwitz and Kathryn
Wallace, AD/CVD Operations, Office VII, Enforcement and Compliance,
International Trade Administration, U.S. Department of Commerce, 1401
Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4880
and (202) 482-6251, respectively.
SUPPLEMENTARY INFORMATION:
Background
On January 4, 2018 and April 26, 2018, Commerce published the CVD
and AD orders on biodiesel from Argentina.\1\ On September 21, 2018,
the Government of Argentina (GOA), joined by Vicentin S.A.I.C.
(Vicentin) and LDC Argentina (LDC), requested that Commerce initiate a
changed circumstance review (CCR) of the AD order, and the GOA (alone)
requested that Commerce initiate a CCR of the CVD order, in order to
have Commerce adjust the cash deposit rates established in the AD and
CVD investigations as a result of changes to Argentina's export tax
regime.\2\ On October 1, 2018, the National Biodiesel Board Fair Trade
Coalition (the petitioner) filed comments requesting that Commerce deny
the GOA's request to initiate CCRs.\3\ On October 11, 2018, the GOA,
Vicentin, and LDC filed comments responding to the petitioner's October
1, 2018 comments.\4\ On October 15, 2018, the petitioner submitted
information and data illustrating the improvements in the domestic
industry since the imposition of the orders, and on October 23, 2018,
the petitioner submitted further comments opposing initiation of the
CCRs.\5\ Between September 26, 2018 and October 19, 2018, Commerce met
with the GOA and the petitioner to discuss their submissions to the
record.\6\ On November 13, 2018, Commerce initiated CCRs of both the AD
and CVD orders to assess the effects of the GOA's revisions to its
export tax regime pursuant to section 751(b)(1) of the Tariff Act of
1930, as amended (the Act) and 19 CFR 351.216.\7\
---------------------------------------------------------------------------
\1\ See Biodiesel from the Republic of Argentina and the
Republic of Indonesia: Countervailing Duty Orders, 83 FR 522
(January 4, 2018), corrected by Biodiesel from the Republic of
Argentina and the Republic of Indonesia: Countervailing Duty Orders,
83 FR 3114 (January 23, 2018); see also Biodiesel from Argentina and
Indonesia: Antidumping Duty Orders, 83 FR 18278 (April 26, 2018).
\2\ See GOA's Letter, ``Biodiesel from Argentina: Request for
Changed Circumstances Review,'' dated September 21, 2018 and filed
on the record of A-357-820; see also GOA's Letter, ``Biodiesel from
Argentina: Request for Changed Circumstances Review,'' dated
September 21, 2018 and filed on the record of C-357-821
(collectively, Requests for CCRs).
\3\ See Petitioner's Letter, ``Biodiesel from Argentina:
Petitioner's Opposition to the Government of Argentina's Requests
for Changed Circumstances Reviews,'' dated October 1, 2018.
\4\ See GOA's Letter, ``Biodiesel from Argentina: Response to
Petitioners' Opposition to the Government of Argentina's Request for
Changed Circumstances Review,'' dated October 11, 2018.
\5\ See Petitioner's Letter, ``Positive Impact of Orders from
Argentina on Domestic Biodiesel Industry,'' dated October 15, 2018;
see also Petitioner's Letter, ``Biodiesel from Argentina:
Petitioner's Response to Respondents' October 11, 2018 Submission,''
dated October 23, 2018.
\6\ See Memorandum, ``AD/CVD Orders on Biodiesel from
Argentina--Requests for Changes {sic{time} Circumstance Reviews,''
dated September 26, 2018; see also Memorandum, ``Antidumping and
Countervailing Duty Orders on Biodiesel from Argentina--Requests for
Changed Circumstances Reviews: Ex Parte Meeting,'' dated October 4,
2018; and Memorandum, ``Antidumping and Countervailing Duty Orders
on Biodiesel from Argentina--Requests for Changed Circumstances
Reviews: Ex Parte Meeting,'' dated October 19, 2018.
\7\ See Biodiesel from Argentina: Initiation of Changed
Circumstances Reviews of the Antidumping and Countervailing Duty
Orders, 83 FR 56300 (November 13, 2018) (Initiation of CCRs).
---------------------------------------------------------------------------
On November 19, 2018 and November 21, 2018, Commerce discussed the
Initiation of CCRs with the petitioner
[[Page 32715]]
and the GOA, respectively.\8\ On December 3, 2018, the petitioner
submitted comments regarding the methodology it recommended Commerce
apply in conducting the AD and CVD CCRs.\9\ On January 28, 2019,
Commerce exercised its discretion to toll all deadlines affected by the
partial federal government closure from December 22, 2018, through the
resumption of operations on January 29, 2019.\10\ On February 1, 2019,
Commerce issued an initial questionnaire to the GOA.\11\ The GOA
submitted its responses to Commerce's initial questionnaire on February
21, 2019.\12\ On March 11, 2019, the petitioner submitted comments on
the GOA's initial questionnaire responses.\13\ On March 20, 2019, the
GOA responded to the petitioner's comments.\14\ Between April 19, 2019
and June 6, 2019, Commerce held three additional ex parte meetings with
the petitioner.\15\ On May 16, 2019, and June 14, 2019, Commerce held
additional ex parte meetings with the GOA.\16\
---------------------------------------------------------------------------
\8\ See Memorandum, ``AD/CVD Orders on Biodiesel from
Argentina--Requests for Changed Circumstance Reviews,'' dated
November 19, 2018; see also Memorandum, ``AD/CVD Orders on Biodiesel
from Argentina: Request for Changed Circumstance Reviews,'' dated
November 27, 2018.
\9\ See Petitioner's Letter, ``Biodiesel from Argentina:
Petitioners' Comments on the Conduct of the Changed Circumstances
Reviews,'' dated December 3, 2018.
\10\ See Memorandum to the Record from Gary Taverman, Deputy
Assistant Secretary for Antidumping and Countervailing Duty
Operations, performing the non-exclusive functions and duties of the
Assistant Secretary for Enforcement and Compliance, ``Deadlines
Affected by the Partial Shutdown of the Federal Government,'' dated
January 28, 2019. All deadlines in this segment of the proceeding
have been extended by 40 days.
\11\ See Commerce Letter re: Initial CCR Questionnaire, dated
February 1, 2019.
\12\ See GOA's February 21, 2019 Initial Questionnaire Response
(GOA IQR).
\13\ See Petitioner's Letter, ``Biodiesel from Argentina:
Petitioner's Comments on the GOA's Questionnaire Response,'' dated
March 11, 2019.
\14\ See GOA's Letter, ``Biodiesel from Argentina: Changed
Circumstance Reviews--The GOA's Response to the Petitioners'
Comments on the GOA's Questionnaire Response,'' dated March 20,
2019.
\15\ See Memorandum, ``Changed Circumstances Reviews of the
Antidumping and Countervailing Duty Orders on Biodiesel from
Argentina: Ex Parte Meeting with the Petitioners,'' dated April 19,
2019; see also Memorandum, ``Changed Circumstances Review of the
Antidumping and Countervailing Duty Orders on Biodiesel from
Argentina: Ex Parte Meeting with the Petitioners,'' dated May 24,
2019; and Memorandum, ``Changed Circumstances Reviews of the
Antidumping and Countervailing Duty Orders on Biodiesel from
Argentina: Ex Parte Meeting with the National Biodiesel Board,''
dated June 10, 2019.
\16\ See Memorandum, ``AD/CVD Orders on Biodiesel from
Argentina--Changed Circumstance Reviews,'' dated May 24, 2019; see
also Memorandum, ``Changed Circumstances Review of the Antidumping
and Countervailing Duty Orders on Biodiesel from Argentina: Ex Parte
Meeting with the Government of Argentina,'' dated June 14, 2019.
---------------------------------------------------------------------------
Scope of the Orders
The product covered by the Orders is biodiesel from Argentina. For
a complete description of the scope of the Orders, see the appendix to
this notice.
Alleged Changed Circumstances
During the period of investigation (POI) of the AD and CVD
investigations (January 1, 2016 through December 31, 2016), an export
tax of 30 percent on soybeans was in effect in Argentina.\17\ In the AD
investigation, we concluded that the 30 percent export tax had the
effect of depressing the domestic price of soybeans.\18\ We explained
that a comparison of prices within Argentina with world prices
indicated domestic prices were nearly 40 percent lower than world
market prices.\19\ We concluded that a ``particular market situation''
(PMS) existed with regard to the price of soybeans as an element of the
cost of production (COP) of biodiesel in Argentina.\20\ Accordingly, we
adjusted the COP reported by the respondents under investigation by
substituting a market determined price for the price that the
respondents actually paid for soybeans in Argentina.\21\
---------------------------------------------------------------------------
\17\ See Biodiesel from Argentina: Preliminary Determination of
Sales at Less Than Fair Value, Preliminary Affirmative Determination
of Critical Circumstances, in Part, 82 FR 50391 (October 31, 2017)
(AD Preliminary Determination), and accompanying Preliminary
Decision Memorandum (PDM) (AD Preliminary Determination PDM) at 23-
24, unchanged in Biodiesel from Argentina: Final Determination of
Sales at Less Than Fair Value and Final Affirmative Determination of
Critical Circumstances, In Part, 83 FR 8837 (March 1, 2018) (AD
Final Determination) and accompanying Issues and Decision Memorandum
(IDM) (AD Final Determination IDM); see also Biodiesel from
Argentina: Preliminary Affirmative Countervailing Duty Determination
and Preliminary Affirmative Critical Circumstances Determination, in
Part, 82 FR 40748 (August 28, 2017) (CVD Preliminary Determination),
and accompanying PDM (CVD Preliminary Determination PDM) at 26-27,
unchanged in Biodiesel From the Republic of Argentina: Final
Affirmative Countervailing Duty Determination, 82 FR 53477 (November
16, 2017) (CVD Final Determination) and accompanying IDM (CVD Final
Determination IDM).
\18\ See AD Preliminary Determination PDM at 23-24; see also AD
Final Determination IDM at Comment 3.
\19\ See AD Preliminary Determination PDM at 23-24; see also AD
Final Determination IDM at Comment 3.
\20\ A so-called ``cost PMS'' is addressed by section 773(e) of
the Act. See AD Preliminary Determination and accompanying PDM at 20
(unchanged in AD Final Determination); see also AD Final
Determination IDM at Comment 3.
\21\ See AD Preliminary Determination PDM at 23-24; see also AD
Final Determination IDM at Comment 3.
---------------------------------------------------------------------------
In the CVD investigation, we concluded that domestic prices for
soybeans were below world market prices by more than $100 per metric
ton, depending on the month, as a result of the export tax on
soybeans.\22\ We also concluded that ``the effect on soybean prices
paid by the respondents is not incidental to, but a direct result of, a
system designed by the GOA to ensure the availability of relatively
low-priced soybeans for domestic processing industries, notably the
biodiesel industry.'' \23\ We explained that the GOA had stated
``export duties are a valid development tool, since they enable many
developing countries to cease being mere suppliers of raw materials,''
\24\ and that the intention of its adjustment to the export tax on
soybeans was to reduce domestic soybean prices in the context of rising
world market prices.\25\ We thus concluded that the GOA entrusts or
directs private parties (i.e., soybean growers) to provide soybeans to
processing industries, including the biodiesel industry, at less than
adequate remuneration (LTAR), within the meaning of section
771(5)(B)(iii) of the Act.\26\ Because the record also indicated the
subsidy was specific (section 771(5A)(D)(iii)(I) of the Act) and
provided a benefit (section 771(5)(E)(iv) of the Act and 19 CFR
351.511(a)(1)), we determined the subsidy was countervailable.\27\
---------------------------------------------------------------------------
\22\ See CVD Preliminary Determination PDM at 30.
\23\ Id. at 29.
\24\ Id.; see also the Petition, dated March 23, 2017, at Volume
I (CVD Petition) at CVD-ARG-08 (the GOA's statements to the World
Trade Organization (WTO) in ``Trade Policy Review Report by the
Secretariat: Argentina (Revision)'' WT/TPR/S/277/Rev.1 (June 14,
2013)) (placed on the record of these segments by Memorandum,
``Additional Information Concerning the Preliminary Changed
Circumstances Reviews of Biodiesel,'' July 1, 2019 (Additional
Information Memo)).
\25\ See CVD Preliminary Determination PDM at 29.
\26\ Id. at 29.
\27\ Id. at 29-30.
---------------------------------------------------------------------------
In its CCR requests, the GOA asserts that significant changes to
its export tax regime warrant reconsideration of the cash deposit rates
established in the AD and CVD final determinations.\28\ The GOA
provided information indicating that, since the POIs, changes in the
export tax regime have been effectuated, which was a key element in
Commerce's analysis of: (1) The PMS finding concerning the cost of
soybean input prices in the AD investigation; and (2) the soybeans for
LTAR program in the CVD investigation.\29\ In particular, the GOA
attached four legislative decrees effecting changes across its export
tax regime, including changes to the export
[[Page 32716]]
taxes applied to soybeans and their derivative products, including
biodiesel:
---------------------------------------------------------------------------
\28\ See Requests for CCRs at 1-2.
\29\ Id. at 2 and 4; see also AD Final Determination IDM at
Comment 3 and CVD Final Determination IDM at Comment 1, which
discussed these aspects of the final determinations.
---------------------------------------------------------------------------
(1) Decree 1343/2016 (December 30, 2016), introducing monthly
reductions of 0.5 percent to the export taxes on soybeans, soybean oil,
soymeal, and soybean pellets, beginning in January 2018; \30\
---------------------------------------------------------------------------
\30\ See Requests for CCRs at Attachment 1.
---------------------------------------------------------------------------
(2) Decree 1025/2017 (December 12, 2017), raising the export tax on
biodiesel from zero to 8 percent, effective January 1, 2018; \31\
---------------------------------------------------------------------------
\31\ See GOA IQR at Appendix V.
---------------------------------------------------------------------------
(3) Decree 468/2018 (May 24, 2018), further raising the export tax
on biodiesel from 8 to 15 percent, effective July 1, 2018; \32\ and,
---------------------------------------------------------------------------
\32\ See Requests for CCRs at Attachment 3.
---------------------------------------------------------------------------
(4) Decree 793/2018 (September 3, 2018), further reducing the
export tax on soybeans, soybean oil, and soymeal to 18 percent,
effective September 4, 2018.\33\
---------------------------------------------------------------------------
\33\ Id. at Attachment 2.
---------------------------------------------------------------------------
Decree 793/2018, in addition to decreasing the export tax on
soybeans, imposed new, temporary taxes on all products exported from
Argentina, equating to an additional 10.3 percent tax for exports of
both soybeans and biodiesel.\34\ Thus, as a result of the four decrees,
as of September 2018, the export tax on soybeans stood at 28.3 percent
(nearly identical to where it was during the POIs) and the export tax
on biodiesel stood at 25.3 percent (versus 3.96 percent through May
2016 and 5.04 percent from June 2016 until June 2017, at which point it
was lowered to zero).\35\
---------------------------------------------------------------------------
\34\ See GOA IQR at 3-4.
\35\ See the Petition at Exhibit CVD-ARG-05 (placed on the
record of these segments by Additional Information Memo).
---------------------------------------------------------------------------
According to the decrees, the changes to the tax rates were
``necessary to continue fostering the convergence between the export
tax applicable to {soybeans, soybean oil, soymeal{time} and that
applicable to biodiesel,'' \36\ and ``in order to, among other
objectives, implement the monetary, exchange or foreign trade policy,
to stabilize internal prices and to address public financial needs.''
\37\ The preamble of Decree 793/2018 references an underlying statutory
regime, as well as the GOA's 2018 national budget, noting concerns with
ensuring ``fiscal convergence, an efficient tax policy and the gradual
reduction of the tax burden.'' \38\ Additionally, in response to a
request from Commerce, the GOA provided its economic reform proposal,
as submitted to the International Monetary Fund (IMF),\39\ as support
for its claims that the export tax revisions are ``aimed at reaching a
gradual convergence between the export tax applicable to soybeans,
soybean oil and soymeal that are applicable to biodiesel. In addition,
they served revenue-collection purposes and also pursued the
stabilization of internal prices, in light of a dire financial
situation during 2018 and the steep devaluation of the national
currency.'' \40\
---------------------------------------------------------------------------
\36\ See Decree 486/2018; see also Requests for CCRs at
Attachment 3.
\37\ See Decree 793/2018; see also Requests for CCRs at
Attachment 2.
\38\ See Decree 793/2018.
\39\ See GOA IQR at Appendix III (Letter to Christine Lagarde,
Managing Director, IMF, ``Letter of Intent, Memorandum of Economic
and Financial Policies, and Technical Memorandum of Understanding,''
dated October 17, 2018 (IMF Proposal)).
\40\ Id. at 1.
---------------------------------------------------------------------------
Legal Framework
Pursuant to section 751(b)(1) of the Act, and 19 CFR 351.216(d),
Commerce will conduct a CCR of an AD or CVD order upon receipt of a
request from an interested party which demonstrates changed
circumstances sufficient to warrant such a review. Section 751(b)(4) of
the Act also provides that Commerce may not conduct a CCR of an
investigation determination within 24 months of the date of the
investigation determination in the absence of ``good cause.'' Section
351.216 of Commerce's regulations, as well as 19 CFR 351.221, provide
rules governing the conduct of CCRs.
Neither the statute nor the regulation provide a definition of
``changed circumstances'' nor explain what aspects of a determination
may be reconsidered in light of such changed circumstances. In
practice, Commerce has conducted CCRs to address a wide variety of
issues, which have resulted in various determinations, including
changes to cash deposit rates.\41\ Where Commerce determines to conduct
a CCR within 24 months of an investigation final determination, the
purpose is not to reconsider the validity of the determinations made in
the AD or CVD investigations, which were based on the circumstances in
existence during the POIs. Rather, the purpose of the CCRs is to
consider whether circumstances have changed since the end of the POIs
such that the cash deposit rates established by the final
determinations (and put into effect by the Orders) are no longer the
best estimates of prospective dumping and subsidization and therefore
are no longer appropriate for purposes of collecting deposits.
---------------------------------------------------------------------------
\41\ See, e.g., Aluminum Extrusions from the People's Republic
of China: Final Results of Expedited Changed Circumstances Review,
83 FR 45609 (September 10, 2018) (finding sufficient information of
changed circumstances to recalculate certain cash deposit rates);
Certain Steel Nails From Malaysia: Final Results of Antidumping Duty
Changed Circumstances Review, 82 FR 34476 (July 25, 2017) (finding
sufficient information of changed circumstances to collapse certain
entities and to utilize the correct cash deposit rate); and Final
Results of Changed Circumstances Administrative Reviews; Pure
Magnesium and Alloy Magnesium From Canada, 57 FR 54047 (November 16,
1992) (finding sufficient information to determine changed
circumstances to the major subsidy program at issue in the
underlying investigation).
---------------------------------------------------------------------------
AD Analysis
Commerce preliminarily finds that there are insufficient changed
circumstances warranting a reconsideration related to the AD Final
Determination. As described above, Commerce determined that a PMS
existed in Argentina with regard to the price of soybeans as a
constituent element of the COP of biodiesel in Argentina.\42\ The Trade
Preferences Extension Act of 2015 \43\ added language to section 773(e)
of the Act, which states that ``if a particular market situation exists
such that the cost of materials and fabrication or other processing of
any kind does not accurately reflect the cost of production in the
ordinary course of trade, the administering authority may use another
calculation methodology under this subtitle or any other calculation
methodology.''
---------------------------------------------------------------------------
\42\ See AD Preliminary Determination PDM at 24.
\43\ See Trade Preferences Extension Act of 2015, Public Law
114-27, 129 Stat. 362 (2015).
---------------------------------------------------------------------------
In this context, we determined that the GOA's intervention in
soybean pricing through the export tax of 30 percent on soybeans
rendered the domestic price of soybeans paid by respondent biodiesel
producers outside the ordinary course of trade.\44\ This PMS finding
involved: (1) Numerous studies indicating that the export tax on
soybeans was designed to generate a low-cost surplus of soybeans for
domestic use, thereby artificially depressing soybean prices for
domestic consumption; (2) the fact that the export tax on soybeans was
not intended as an ordinary revenue measure, but rather was unique to
soybeans, as soybeans were the only commodity subject to an export tax
during the POI; and (3) record evidence that Argentine prices for
soybeans were nearly 40 percent lower than world market prices for
soybeans during the POI.\45\ Accordingly, based on the totality of the
circumstances, Commerce rejected the prices paid by the respondents in
the AD investigation as part of the COP calculation, as they did ``not
accurately reflect the cost of
[[Page 32717]]
production in the ordinary course of trade,'' and replaced these prices
with a market-determined price.\46\
---------------------------------------------------------------------------
\44\ See AD Preliminary Determination PDM at 23-24; see also AD
Final Determination IDM at Comment 3.
\45\ See AD Preliminary Determination PDM at 23-24; see also AD
Final Determination IDM at Comment 3.
\46\ See AD Preliminary Determination PDM at 23-24; see also AD
Final Determination IDM at Comment 3.
---------------------------------------------------------------------------
For purposes of this CCR, record evidence shows soybean prices in
Argentina still remain well below world market prices. Specifically,
according to the GOA's data, since September 2018 (when the export tax
on biodiesel was raised to 25.3 percent), the gap between domestic and
world prices has ranged between $50 per ton to nearly $100 per ton, or,
in terms of a percentage, domestic prices have been 30 percent lower
than world prices since last September.\47\ This is almost the same gap
that existed during the POI.\48\
---------------------------------------------------------------------------
\47\ See GOA IQR at 14.
\48\ See AD Final Determination IDM at Comment 3; see also
Petitioner's Letter, ``Petitioner's Particular Market Situation
Allegation Regarding Respondent's Home and Third Country Market
Sales and Cost of Production,'' dated August 2, 2017 (placed on the
record of these segments by Additional Information Memo) at 45 and
Exhibit 37-B.
---------------------------------------------------------------------------
While the GOA speculates that the relationship between domestic and
world prices is the result of several factors, such as currency
fluctuations, trade measures imposed by China on U.S. soybean
shipments, and the weather, it provided no studies, publications, or
detailed analyses demonstrating whether such factors might explain the
current gap between prices.\49\ Instead, the GOA argues that it is
impossible to isolate the effects of any one cause. However, evidence
on the record demonstrates that there is a discernible correlation
between the size of the so-called price gap and the amount of the
export tax. For instance, from 1994 through 2001 (when the export tax
rate was 3.5 percent), domestic soybean prices in Argentina were
slightly less than the world soybean price.\50\ In 2001, the difference
in prices was $26 per metric ton.\51\ By the end of 2002, after the
export tax increased to 23.5 percent, the difference between Argentine
domestic soybean prices and world market prices had grown to nearly $50
a metric ton.\52\ Between 2003 and 2006, the average price differential
increased to over $100 per metric ton.\53\ In 2007, when the GOA
increased the export tax from 23.5 percent to 35 percent, the price
differential increased to $165 per metric ton.\54\ The price
differential increased to $200 per metric ton in 2015.\55\ In 2016,
after the GOA reduced the export tax to 30 percent, the price
differential decreased to $146 per metric ton. More recently, as the
GOA began reducing the export tax by 0.50 percent per month in January
2018, the gap began closing.\56\ After the GOA increased the export tax
to 28.3 percent in September 2018, the gap began expanding once again,
approaching $100 per metric ton in January 2019. In any event, as we
indicated in the AD Final Determination in response to a similar
argument by the Vicentin Group, the PMS provisions of the Act do not
require a strict causal finding between the distortive government
action and the observed distorted price.\57\
---------------------------------------------------------------------------
\49\ See GOA IQR at 11-12. The GOA states that it ``doubts'' the
export tax has had a significant effect on prices.
\50\ See CVD Petition at 26 (placed on the record of these
segments by Additional Information Memo).
\51\ Id. at CVD-ARG-21 (placed on the record of these segments
by Additional Information Memo).
\52\ Id.
\53\ Id.
\54\ Id.
\55\ Id.
\56\ See GOA IQR at 13 (comparison of Argentine prices with
Chicago commodities exchange prices) and 4 (Table 1: Export Tax
Rates).
\57\ See AD Final Determination IDM at Comment 3.
---------------------------------------------------------------------------
In addition, as noted, multiple publications on the record of the
AD investigation concluded that the export tax leads to lower soybean
prices (and was intended to do so).\58\ The GOA has provided no
evidence in the form of studies, publications, or detailed analyses to
undermine these publications, or to demonstrate that the export tax on
soybeans no longer impedes external trade and competitive domestic
pricing for soybeans.
---------------------------------------------------------------------------
\58\ See AD Preliminary Determination PDM at 23-24; see also AD
Final Determination IDM at Comment 3.
---------------------------------------------------------------------------
We recognize that the record indicates that the design and
structure of the export tax regime has changed, which affects the
``ordinary revenue measure'' prong of our PMS analysis in the AD
investigation. Specifically, in the AD Final Determination, we found
that the export tax regime was not part of an ordinary revenue measure,
as it was unique to soybeans--the only commodity product subject to an
export tax during the POI.\59\ The record of this CCR demonstrates that
is no longer the case. As discussed above, Decree 1025/2017 and Decree
468/2018 increased the export tax on biodiesel from zero to 15 percent,
while Decree 793/2018, in addition to decreasing the export tax on
soybeans, imposed new, temporary taxes on all products exported from
Argentina.\60\ Thus, we find that the export tax is no longer designed
for downstream development purposes, but is part of an overall revenue
improvement measure and a tax scheme applied to exports of both
agricultural and industrial commodities.
---------------------------------------------------------------------------
\59\ See AD Final Determination IDM at Comment 3.
\60\ See GOA IQR at 3-4, Appendix V; see also Requests for CCRs
at Attachments 2 and 3.
---------------------------------------------------------------------------
Nevertheless, after reviewing the record evidence in this CCR under
the totality of circumstances analysis of the AD investigation, we find
that there remains a price gap that still exists between domestic and
world prices, as a result of the export tax on soybeans, which
continues to impede external trade and competitive domestic pricing for
soybeans. Thus, we find that there are insufficient changed
circumstances to warrant a reconsideration of our finding that the
GOA's intervention in soybean pricing through the export tax on
soybeans renders prices paid by biodiesel producers outside the
ordinary course of trade. The internal soybean market is still clearly
distorted by GOA intervention and therefore a PMS still exists.
We also find that our PMS analysis is unaffected by the imposition
of a specific export tax on biodiesel. As noted above, during the POI
there was an export tax on biodiesel of 3.96 percent through May 2016
and 5.04 percent from June 2016 until the end of the POI in December
2016.\61\ After dropping down to zero, the export tax is now 25.3
percent, as compared to the soybean export tax of 28.3 percent. We find
that an export tax on soybeans continues to artificially depress
soybean prices for domestic consumption, regardless of the presence or
magnitude of an export tax on biodiesel. Simply put, Argentine soybean
growers continue to accept depressed domestic prices rather than
exporting and paying a significant export tax.
---------------------------------------------------------------------------
\61\ See CVD Petition at Exhibit CVD-ARG-05 (placed on the
record of these segments by Additional Information Memo).
---------------------------------------------------------------------------
CVD Analysis
In the CVD investigation, Commerce examined an allegation that
soybeans were provided for LTAR through soybean export restraints,
which the CVD Petition described as ``high export taxes and other
regulations relating to soybeans,'' \62\ which entrust and direct
soybean growers to provide a subsidy ``benefiting the industry under
investigation.'' \63\ In the CVD Preliminary Determination, Commerce
determined that the export tax on soybeans amounted to a
countervailable
[[Page 32718]]
subsidy because, among other reasons,\64\ the GOA ``entrusted or
directed'' a private entity (i.e., soybean growers) to make a financial
contribution, pursuant to section 771(5)(B)(iii) of the Act, in the
form of the provision of goods or services to biodiesel producers for
LTAR, pursuant to sections 771(5)(D)(iii) and 771(5)(E)(iv) of the
Act.\65\ We explained that where, as was the case in the underlying
investigation and is still the case here, there is no ``direct
legislation to entrust or direct private parties to provide a financial
contribution,'' Commerce may ``rely on circumstantial information to
determine that there was entrustment or direction.'' \66\ We further
explained that, in such a situation, Commerce employs a two-part test
examining the relevant policy and practices of the foreign
government.\67\ Specifically, Commerce looks to: (1) Whether the
government has in place during the relevant period a governmental
policy to support the respondent(s); and (2) whether evidence on the
record establishes a pattern of practices on the part of the government
to act upon that policy to entrust or direct the associated private
entity decisions.\68\ We then evaluated the record and determined that
the export tax on soybeans constituted ``a policy to support production
of biodiesel and other domestic processing industries,'' \69\ and that
``{t{time} he effect on soybean prices paid by the respondent is not
incidental to, but a direct result of, a system designed by the GOA to
ensure the availability of relatively low-priced soybeans for domestic
processing industries, notably the biodiesel industry.'' \70\ In other
words, Commerce concluded the program existed to ``provide{ {time} an
incentive for the development of domestic manufacturing or processing
industries with higher value-added exports,'' \71\ such as biodiesel
production. This conclusion was derived from an examination of the
``pertinent GOA laws and regulations'' as well as other, third-party
evidence indicating the program was a ``development tool'' designed
``to help'' downstream producers.\72\ Thus, the focus is not on whether
the program has led to lower input prices, but whether the program is
designed and structured to entrust and direct soybean producers to
provide Argentine biodiesel producers with soybeans for LTAR.\73\
---------------------------------------------------------------------------
\62\ Id. at 16 (placed on the record of these segments by
Additional Information Memo).
\63\ Id. at 17 (placed on the record of these segments by
Additional Information Memo).
\64\ Commerce also found that the provision of soybeans was
specific and provided a benefit.
\65\ See CVD Preliminary Determination PDM at 30.
\66\ Id. at 28 (citing Supercalendered Paper from Canada: Final
Affirmative Countervailing Duty Determination, 80 FR 63535 (October
20, 2015) and accompanying IDM at 125).
\67\ See CVD Preliminary Determination PDM at 28. The CIT
affirmed Commerce's approach in Hynix Semiconductor, Inc. v. United
States, 391 F. Supp. 2d 1337 (CIT 2005), aff'd after remand 425 F.
Supp. 2d 1287 (CIT 2006).
\68\ See CVD Preliminary Determination PDM at 28.
\69\ Id. at 29.
\70\ Id.
\71\ Id.
\72\ Id.
\73\ In the CVD Initiation Checklist, we noted that the
``Biofuels Law'' is intended to ``promote and control sustainable
biofuel production and use.'' See CVD Initiation Checklist at 8-9
(emphasis in the original) (placed on the record of these segments
by Additional Information Memo); see also Petition at CVD-ARG-27
(``Regime to Regulate and Promote Sustainable Biofuel Product and
Use,'' Law 26,093 (April 19, 2006) (placed on the record of these
segments by Additional Information Memo).
---------------------------------------------------------------------------
We preliminarily determine that the evidence that supported a
finding of entrustment and direction in the original investigation no
longer exists. Based on the record before us, we no longer find that
Argentina's export tax regime is designed and structured to encourage
the development of the downstream biodiesel industry or to benefit the
respondents. This is based on the changes cited by the GOA to the
export tax on soybeans as well as to the export taxes on downstream
products (including biodiesel) for which soybeans are a major
input.\74\ Contrary to the petitioner's contention that the export tax
on biodiesel is irrelevant to both the AD and CVD CCRs, Commerce
preliminarily concludes that the analytical framework for finding
``entrustment and direction'' of private parties (as described above),
which is concerned with more than the existence of distorted prices,
and the record of the CVD investigation itself, indicate that we should
consider the export tax on biodiesel in relation to the export tax on
soybeans.\75\ As discussed above, the CVD Petition describes the
allegation as being based on the export tax on soybeans and other
regulations relating to soybeans, and also repeatedly refers to the
importance of the difference between the level of export taxation on
soybeans compared to downstream products such as biodiesel.\76\ This
same approach, examining the totality of record information and the
unique circumstances of the case, was taken in the CVD Initiation
Checklist, where Commerce concluded:
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\74\ See CVD Initiation Checklist at 7.
\75\ By comparison, in the PMS analysis undertaken in the AD
investigation, as discussed above, we are concerned simply with
whether the GOA's intervention has led to distorted prices that are
outside the ordinary course of trade.
\76\ See CVD Petition at 19-23 (placed on the record of these
segments by Additional Information Memo).
The overall configuration of the GOA's export taxes, including
the differences between export taxes on soybeans and soybean
derivatives, in addition to the intent of the biofuels law to
promote the production of and use of biofuels, and to benefit ``all
projects for the establishment of biofuel industries,'' indicates
that the GOA has implemented the export taxes with the intent of
entrusting and directing soybean suppliers to provide a financial
contribution to biodiesel producers.\77\
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\77\ See CVD Initiation Checklist at 9 (emphasis added).
The significance of the relationship between the two taxes is
apparent elsewhere on the record of the investigation, including the
third-party assessments submitted by the petitioner to support the
allegation and examined by Commerce during the investigation.\78\ For
example, at the outset of our analysis of the program in the CVD
Preliminary Determination, Commerce highlights three third-party
sources. Each source references the differential as being important if
the design of the scheme is to benefit downstream producers:
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\78\ See CVD Preliminary Determination PDM at 25-26.
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International Renewable Energy Agency, ``Renewable Energy
Policy Brief--Argentina,'' dated June 2015: ``Differential export taxes
for biofuels versus other products derived from the same feedstock
promoted the export of biofuels, especially biodiesel. For example, in
2008 export taxes were 35% for soy bean, 32% for soy oil, but only 5%
for biodiesel.'' \79\
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\79\ See CVD Petition at Exhibit CVD-ARG-03.
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USDA Foreign Agricultural Service, ``Argentina Biofuels
Annual,'' dated July 7, 2016: ``A factor which contributed to the
expansion of the local biodiesel industry since its beginnings has been
the differential export tax on biodiesel vis-a-vis soybean oil. Soybean
oil exports are currently taxed 27 percent while biodiesel exports are
taxes 5.04 percent.'' \80\
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\80\ Id. at Exhibit CVD-ARG-05.
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OECD Trade Policy Studies, ``The Economic Impact of Export
Restrictions on Raw Materials,'' dated 2010: ``Export restrictions
provide downstream processing industries with an advantage.
Differential export duty rates play an important role in this regard:
higher rates for raw materials or input products while lower rates
apply for finished products. For example, in Argentina the export duty
rates for soybean, soybean oil and biodiesel were 27.5%, 24.5%, and 5%
respectively as of 2007. The price advantage provided to domestic
downstream industries can distort and reduce competition in both
domestic and foreign markets.'' \81\
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\81\ Id. at Exhibit CVD-ARG-07 (emphasis added).
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[[Page 32719]]
Thus, we preliminarily determine that the convergence of the export
tax rates on soybeans and biodiesel demonstrates that the tax regime as
it pertains to soybeans and its derivatives is no longer about
benefitting or encouraging the development of the domestic biodiesel
industry. The shift in the design is also evident from the economic
reform proposal Argentina has submitted to the IMF, corroborating the
GOA's claims that it has shifted the focus of its export tax program
from selective economic development to general revenue collection and
economic stability. In relevant part, the proposal, dated October 17,
2018, states:
New and increased export taxes are one of two fiscal
measures adopted by Argentina as a means of fairly achieving revenue
gains and the macroeconomic and financial objectives promised to the
IMF (the other being a wealth tax).\82\
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\82\ IMF Proposal at 2.
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The GOA has ``unraveled a myriad of economic distortions
put in place by the previous administration,'' \83\ and pledges to
continue ``revisions to the current distortive systems of taxes and
subsidies.'' \84\
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\83\ Id. at 4.
\84\ Id. at 6.
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The commitments are part of a request to the IMF for
access to an additional $7.1 billion in reserve financing, and a
recognition that Argentina must ``no longer live beyond its means'' and
must ``spend only what it can raise in taxes.'' \85\
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\85\ Id. at 4.
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The OECD report referenced above also states that in Argentina
export taxes have historically been an important source of revenue,
unlike in other countries where they have been used primarily as a
development tool, thus supporting Argentina's characterization of the
revised tax regime.
Given this change, Commerce preliminarily determines that the
current program provides no third-party financial contribution through
an entrustment and direction mechanism and is therefore, as currently
designed, not countervailable. Therefore, Commerce preliminarily
determines to lower the CVD cash deposit rates by the amount determined
for the program in the CVD final determination.
Preliminary Results of Changed Circumstances Reviews
Pursuant to section 751(b) of the Act and 19 CFR 351.216, Commerce
preliminarily determines that changed circumstances do not exist
warranting any changes under the AD order, but that changed
circumstances do exist warranting recalculation of the total CVD cash
deposit rates as follows:
----------------------------------------------------------------------------------------------------------------
Subsidy rate
Total subsidy determined for Revised total
rate under the the provision of subsidy rate
CVD order soybeans pursuant to the
(percent) (percent) CCR (percent)
----------------------------------------------------------------------------------------------------------------
LDC Argentina S.A......................................... 72.28 72.09 0.19
Vicentin S.A.I.C.......................................... 71.45 61.15 10.30
All Others *.............................................. 71.87 n/a 10.30
----------------------------------------------------------------------------------------------------------------
* Because the revised cash deposit rate determined for LDC Argentina S.A. is de minimis, we have based the all
others rate exclusively on the rate for Vicentin S.A.I.C.
Cash Deposits
If the revised cash deposit rates indicated above are maintained
for the final results of the CVD CCR, Commerce will issue instructions
to U.S. Customs and Border Protection (CBP) revising the cash deposits
applied to all entries of subject merchandise entered, or withdrawn
from warehouse, for consumption, on or after the date of publication of
the final results in the Federal Register. Commerce will instruct CBP
not to collect cash deposits for producers or exporters determined to
have a total subsidy rate below de minimis. Commerce will instruct CBP
to continue to suspend all entries of subject merchandise regardless of
whether any rate determined pursuant to the final results of these CCRs
is zero or de minimis, and such entries will be subject to
administrative review if one is requested.
If the above preliminary results are maintained for the final
results of the AD CCR, Commerce will not issue instructions to CBP
under the AD order as no changes to the cash deposit rates need to be
effectuated.
Public Comment
Interested parties may submit case briefs no later than 30 days
after the date of publication of these preliminary results of review in
the Federal Register.\86\ Rebuttal briefs, limited to issues raised in
the case briefs, may be filed by no later than five days after the
deadline for filing case briefs.\87\ Parties that submit case or
rebuttal briefs are encouraged to submit with each argument: (1) A
statement of the issue; (2) a brief summary of the argument; and (3) a
table of authorities.\88\ All briefs are to be filed electronically
using ACCESS.\89\ An electronically filed document must be received
successfully in its entirety by ACCESS by 5:00 p.m. Eastern Time on the
day on which it is due.\90\
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\86\ See 19 CFR 351.309(c)(1)(ii).
\87\ See 19 CFR 351.309(d)(1).
\88\ See 19 CFR 351.309(c)(2) and (d)(2).
\89\ See 19 CFR 351.309(b) and (f).
\90\ See 19 CFR 351.303(b).
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Any interested party may submit a request for a hearing to the
Assistant Secretary of Enforcement and Compliance using ACCESS within
30 days of publication of this notice in the Federal Register.\91\
Hearing requests should contain the following information: (1) The
party's name, address, and telephone number; (2) the number of
participants; and (3) a list of the issues to be discussed. Oral
presentations will be limited to issues raised in the briefs.\92\ If a
request for a hearing is made, parties will be notified of the time and
date of the hearing, which will be held at the U.S. Department of
Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.\93\
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\91\ See 19 CFR 351.310(c).
\92\ Id.
\93\ See 19 CFR 351.310(d).
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Final Results of the Review
Unless extended, in accordance with 19 CFR 351.216, Commerce
intends to issue the final results of this CCR not later than 270 days
after the date on which the review was initiated.
Notification to Interested Parties
Commerce is issuing these results in accordance with sections
751(b)(1) and 777(i) of the Act and 19 CFR 351.216 and
351.221(c)(3)(i).
[[Page 32720]]
Dated: July 1, 2019.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2019-14556 Filed 7-8-19; 8:45 am]
BILLING CODE 3510-DS-P
