[Federal Register: July 25, 2007 (Volume 72, Number 142)]
[Notices]
[Page 40839-40841]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25jy07-43]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-917]
Laminated Woven Sacks from the People's Republic of China:
Initiation of Countervailing Duty Investigation
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: July 25, 2007.
FOR FURTHER INFORMATION CONTACT: Mark Hoadley or Joshua Reitze, AD/CVD
Operations, Office 6, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3128 and (202) 482-0666, respectively.
Initiation of Investigation
SUPPLEMENTARY INFORMATION:
The Petition
On June 28, 2007, the Department of Commerce (Department) received
a Petition filed in proper form by the Laminated Woven Sacks Committee
and its individual members, Bancroft Bag, Inc., Coating Excellence
International, LLC, Hood Packaging Corporation, Mid-America Packaging,
LLC, and Polytex Fibers Corporation (collectively, the Petitioners).
See Petition for the Imposition of Antidumping and Countervailing
Duties Against Laminated Woven Sacks from the People's Republic of
China (June 28, 2007) (Petition). On July 2, July 6, July 11, and July
12, 2007, the Department issued requests for additional information and
clarification of certain areas of the Petition involving general issues
concerning the countervailing duty (CVD) allegations. Based on the
Department's requests, the Petitioners filed additional information
concerning the Petition on July 11 and July 13, 2007.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as
amended (the Act), the Petitioners allege that manufacturers,
producers, or exporters of laminated woven sacks (LWS) in the People's
Republic of China (the PRC) receive countervailable subsidies within
the meaning of section 701 of the Act and that such imports are
materially retarding the establishment of an industry in the United
States, or that such an industry is materially injured or threatened
with material injury by reason of such imports.
The Department finds that the Petitioners filed the Petition on
behalf of the domestic industry because they are interested parties as
defined in sections 771(9)(E) and (F) of the Act and the Petitioners
have demonstrated sufficient industry support with respect to the
countervailing duty investigation (see ``Determination of Industry
Support for the Petition'' section below).
Scope of Investigation
The merchandise covered by this investigation is laminated woven
sacks. See Attachment to this notice for a complete description of the
merchandise covered by this investigation.
Comments on Scope of Investigation
During our review of the Petition, we discussed the scope with the
Petitioners to ensure that it is an accurate reflection of the products
for which the domestic industry is See king relief. Moreover, as
discussed in the preamble to the regulations (Antidumping Duties;
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)),
we are setting aside a period for interested parties to raise issues
regarding product coverage. The Department encourages all interested
parties to submit such comments by August 7, 2007. Comments should be
addressed to Import Administration's Central Records Unit, Room 1870,
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, DC 20230, attention Mark Hoadley, room 7866. The period of
scope consultations is intended to provide the Department with ample
opportunity to consider all comments and to consult with parties prior
to the issuance of the preliminary determination.
Consultations
Pursuant to section 702(b)(4)(A)(ii) of the Act, on June 29, 2007,
the Department invited representatives of the Government of the
People's Republic of China (herein after the GOC) for consultations
with respect to the countervailing duty Petition. The Department held
these consultations in Beijing, China, with representatives of the GOC
on July 16, 2007. See Memorandum to the File, ``Consultations with
Officials from the Government of the People's Republic of China'' (July
16, 2007) (on file in the Central Records Unit (CRU) of the Department
of Commerce building, Room B-099).
Determination of Industry Support for the Petition
Section 702(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 702(c)(4)(A) of the Act
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (i) at least
25 percent of the total production of the domestic like product; and
(ii) more than 50 percent of the production of the domestic like
product produced by that portion of the industry expressing support
for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of
the Act provides that, if the petition does not establish support of
domestic producers or workers accounting for more than 50 percent of
the total production of the domestic like product, the Department
shall: (i) poll the industry or rely on other information in order to
determine if there is support for the petition, as required by
subparagraph (A), or (ii) determine industry support using a
statistically valid sampling method.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers as a whole of a domestic like product. Thus, to determine
whether a petition has the requisite industry support, the statute
directs the Department to look to producers and workers who produce the
domestic like product. The International Trade Commission (ITC), which
is responsible for determining whether ``the domestic industry'' has
been injured, must also determine what constitutes a domestic like
product in order to define the industry. While both the Department and
the ITC must apply the same statutory definition regarding the domestic
like product (section 771(10) of the Act), they do so for different
purposes and pursuant to a separate and distinct authority. In
addition, the Department's determination is subject to limitations of
time and information. Although this may result in different definitions
of the like product, such differences do not render the decision of
either agency contrary to law. See USEC, Inc. v. United States, 132 F.
Supp. 2d 1, 8 (CIT 2001), citing Algoma Steel Corp. Ltd. v. United
States, 688 F. Supp. 639, 644 (1988), aff'd 865 F.2d 240 (Fed. Cir.
1989), cert. denied 492 U.S. 919 (1989).
Section 771(10) of the Act defines the domestic like product as ``a
product
[[Page 40840]]
which is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this subtitle.'' Thus, the reference point from which the
domestic like product analysis begins is ``the article subject to an
investigation,'' (i.e., the class or kind of merchandise to be
investigated, covered by the scope as defined in the Petition).
With regard to the domestic like product, the Petitioners do not
offer a definition of domestic like product distinct from the scope of
the investigation. Based on our analysis of the information submitted
on the record, we have determined that LWS constitute a single domestic
like product and we have analyzed industry support in terms of that
domestic like product. For a discussion of the domestic like product
analysis in this case, see the Countervailing Duty Investigation
Initiation Checklist: Laminated Woven Sacks from the People's Republic
of China (PRC), Industry Support at Attachment II (CVD Initiation
Checklist), on file in the CRU.
Our review of the data provided in the Petition, supplemental
submissions, and other information readily available to the Department
indicates that the Petitioners have established industry support.
First, the Petition established support from domestic producers (or
workers) accounting for more than 50 percent of the total production of
the domestic like product and, as such, the Department is not required
to take further action in order to evaluate industry support (e.g.,
polling). See Section 702(c)(4)(D) of the Act. Second, the domestic
producers have met the statutory criteria for industry support under
702(c)(4)(A)(i) because the domestic producers (or workers) who support
the Petition account for at least 25 percent of the total production of
the domestic like product. Finally, the domestic producers have met the
statutory criteria for industry support under 702(c)(4)(A)(ii) because
the domestic producers (or workers) who support the Petition account
for more than 50 percent of the production of the domestic like product
produced by that portion of the industry expressing support for, or
opposition to, the Petition. Accordingly, the Department determines
that the Petition was filed on behalf of the domestic industry within
the meaning of section 702(b)(1) of the Act. See CVD Initiation
Checklist at Attachment II (Industry Support).
The Department finds that the Petitioners filed the Petition on
behalf of the domestic industry because they are interested parties as
defined in sections 771(9)(C), (E), and (F) of the Act and they have
demonstrated sufficient industry support with respect to the
countervailing duty investigation that they are requesting the
Department initiate. See CVD Initiation Checklist at Attachment II
(Industry Support).
Allegations and Evidence of Material Retardation and of Material Injury
and Causation
Because the PRC is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Act, section 701(a)(2) of the Act
applies to these investigations. Accordingly, the ITC must determine
whether imports of the subject merchandise from the PRC materially
injure, or threaten material injury to, a U.S. industry, or whether the
establishment of an industry in the United States is materially
retarded.
Section 703(a)(1)(B) of the Act states that the ITC ``shall
determine . . . .whether there is a reasonable indication that the
establishment of an industry in the United States is materially
retarded by reason of imports of the subject merchandise.'' The
Petitioners allege that imports of subject merchandise from the PRC
have materially retarded the establishment of the domestic industry
producing LWS. The Petitioners argue that U.S. producers of LWS have
not stabilized their operations and, therefore, a U.S. industry
producing LWS has not been established. To support their argument, the
Petitioners examine the five factors considered by the ITC to determine
if an industry is established, as set forth in the ITC's Antidumping
and Countervailing Duty Handbook. See Antidumping and Countervailing
Duty Handbook (12th Ed.), USITC Pub. 3916 (April 2007). Furthermore,
the Petitioners contend that their efforts to establish a domestic LWS
industry have been thwarted by dumped and subsidized imports of LWS
from the PRC.
The Petitioners also allege that the U.S. industry producing the
domestic like product is being materially injured, or is threatened
with material injury, by reason of the subsidized imports of the
subject merchandise. The Petitioners contend that the industry's
injured condition is illustrated by lost sales, lost revenue,
underselling and price depression or suppression, poor financial
performance, capacity and depressed capacity utilization rate, and
increased import penetration.
We have assessed the allegations and supporting evidence regarding
material retardation and material injury and causation, and we have
determined that these allegations are properly supported by adequate
evidence and meet the statutory requirements for initiation. See CVD
Initiation Checklist at Attachment III (Injury).
Subsidy Allegations
Section 702(b) of the Act requires the Department to initiate a
countervailing duty proceeding whenever an interested party files a
petition on behalf of an industry that (1) alleges the elements
necessary for an imposition of a duty under section 701(a) of the Act
and (2) is accompanied by information reasonably available to the
Petitioners supporting the allegations.
The Department has examined the countervailing duty Petition on LWS
from the PRC and found that it complies with the requirements of
section 702(b) of the Act. Therefore, in accordance with section 702(b)
of the Act, we are initiating a countervailing duty investigation to
determine whether manufacturers, producers, or exporters of LWS in the
PRC receive countervailable subsidies.
We are including in our investigation the following programs
alleged in the Petition to have provided countervailable subsidies to
producers and exporters of the subject merchandise in the PRC:
GOC Loan Programs
1. Policy Loans to LWS Producers from Government-Owned Banks
2. Loan Forgiveness for LWS Producers by the GOC
GOC Provision of Goods or Services for Less Than Adequate
Remuneration
3. Provision of Electricity for Less than Adequate Remuneration
4. Provision of Land for Less than Adequate Remuneration
GOC Grant Programs
5. The State Key Technologies Renovation Project Fund
6. Grants and Other Funding for High Technology Equipment for the
Textile Industry
7. Grants to Loss-Making State-Owned Enterprises
GOC Income Tax Programs
8. Preferential Tax Policies for Enterprises with Foreign
Investment (Two Free, Three Half Program)
9. Preferential Tax Policies for Export-Oriented Foreign Invested
Enterprises (FIEs)
10. Corporate Income Tax Refund Program for Reinvestment of FIE
Profits in Export-Oriented Enterprises
11. Tax Benefits for FIEs in Encouraged Industries that
[[Page 40841]]
Purchase Domestic Origin Machinery
12. Tax Program for FIEs Recognized as High or New Technology
Enterprises
13. Preferential Tax Policies for Research and Development
14. Tax Subsidies to FIEs in Specially Designated Geographic Areas
15. Preferential Tax Policies for Township Enterprises by FIEs
GOC Indirect Tax Programs and Import Tariff Programs
16. Value Added Tax (VAT) Rebate for FIE Purchases of Domestically
Produced Equipment
17. VAT and Tariff Exemptions for FIEs Using Imported Technology
and Equipment in Encouraged Industries
18. VAT and Tariff Exemptions on Imported Equipment (Domestic
Enterprises)
19. Exemption from Payment of Staff and Worker Benefit Taxes for
Export-Oriented Enterprises
Provincial Grant Programs
20. Export Interest Subsidy Funds for Enterprises Located in
Zhejiang and Guangdong Provinces
21. Technological Innovation Funds Provided by Zhejiang Province
22. Programs to Rebate Antidumping Legal Fees
Provincial and Local Tax Programs for FIEs
23. Local Income Tax Exemption and Reduction Programs for
``Productive'' FIEs
For further information explaining the basis for the Department's
determination to investigate these programs, see CVD Initiation
Checklist.
Application of the Countervailing Duty Law to the PRC
The Department has treated the PRC as an NME country in all past
antidumping duty investigations and administrative reviews. In
accordance with section 771(18)(C)(i) of the Act, any determination
that a country is an NME country shall remain in effect until revoked
by the administering authority. See Tapered Roller Bearings and Parts
Thereof, Finished and Unfinished, (TRBs) From the People's Republic of
China: Preliminary Results of 2001-2002 Administrative Review and
Partial Rescission of Review, 68 FR 7500, 7500-1 (February 14, 2003),
unchanged in TRBs from the People's Republic of China: Final Results of
2001-2002 Administrative Review, 68 FR 70488, 70488-89 (December 18,
2003).
In the amended preliminary determination in the investigation of
coated free sheet paper from the PRC, the Department preliminarily
determined that the current nature of the PRC economy does not create
obstacles to applying the necessary criteria in the CVD law. See Coated
Free Sheet Paper from the People's Republic of China; Amended
Preliminary Affirmative Countervailing Duty Determination, 72 FR 17484,
17486 (April 9, 2007) (CFS Preliminary Determination), and Memorandum
for David M. Spooner, Assistant Secretary for Import Administration,
``Countervailing Duty Investigation of Coated Free Sheet Paper from The
People's Republic of China Whether the Analytic Elements of the
Georgetown Steel Opinion are Applicable to China's Present-day
Economy,'' (March 29, 2007), on file in the CRU. Therefore, because the
Petitioners have provided sufficient allegations and support of their
allegations to meet the statutory criteria for initiating a
countervailing duty investigation of LWS from the PRC, initiation of a
CVD investigation is warranted in this case.
Distribution of Copies of the Petition
In accordance with section 702(b)(4)(A)(i) of the Act, a copy of
the public version of the Petition has been provided to the GOC. To the
extent practicable, we will attempt to provide a copy of the public
version of the Petition to each exporter named in the Petition,
consistent with 19 CFR 351.203(c)(2).
ITC Notification
We have notified the ITC of our initiation, as required by section
702(d) of the Act.
Preliminary Determination by the ITC
The ITC will preliminarily determine, no later than August 13,
2007, whether there is a reasonable indication that imports of LWS from
the PRC are materially retarding the establishment of a U.S. industry,
or whether such an industry is materially injured or threatened with
material injury by reason of such imports. See section 703(a)(2) of the
Act. A negative ITC determination will result in the investigation
being terminated; otherwise, the investigation will proceed according
to statutory and regulatory time limits.
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: July 18, 2007.
Joseph A. Spetrini,
Deputy Assistant Secretaryfor Import Administration.
Attachment
Scope of the Countervailing Duty Investigation
Laminated Woven Sacks from the People's Republic of China
The merchandise covered by this investigation is laminated woven
sacks. Laminated woven sacks are bags or sacks consisting of one or
more plies of fabric consisting of woven polypropylene strip and/or
woven polyethylene strip; with or without an extrusion coating of
polypropylene and/or polyethylene on one or both sides of the
fabric;\1\ laminated by any method either to an exterior ply of plastic
film such as biaxially-oriented polypropylene (``BOPP'') or to an
exterior ply of paper that is suitable for high quality print graphics;
printed with three colors or more in register; with or without lining;
whether or not closed on one end; whether or not in roll form; with or
without handles; with or without special closing features; not
exceeding one kilogram in weight. Laminated woven bags are typically
used for retail packaging of consumer goods such as pet foods and bird
seed.
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\1\ ``Paper suitable for high quality print graphics,'' as used
herein, means paper having an ISO brightness of 82 or higher and a
Sheffield Smoothness of 250 or less. Coated free sheet is an example
of a paper suitable for high quality print graphics.
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Effective July 1, 2007, laminated woven sacks are classifiable
under Harmonized Tariff Schedule of the United States (``HTSUS'')
subheadings 6305.33.0050 and 6305.33.0080. Laminated woven sacks were
previously classifiable under HTSUS subheading 6305.33.0020. If entered
with plastic coating on both sides of the fabric consisting of woven
polypropylene strip and/or woven polypropylene strip, laminated woven
sacks may be classifiable under HTSUS subheadings 3923.21.0080,
3923.21.0095, and 3923.29.0000. If entered not closed on one end or in
roll form, laminated woven sacks may be classifiable under HTSUS
subheading 5903.90.2500 and 3921.19.0000. Although HTSUS subheadings
are provided for convenience and customs purposes, the written
description of the scope of this investigation is dispositive.
[FR Doc. E7-14375 Filed 7-24-07; 8:45 am]
BILLING CODE 3510-DS-S