[Federal Register Volume 71, Number 158 (Wednesday, August 16, 2006)]
[Notices]
[Pages 47174-47177]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-13472]


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DEPARTMENT OF COMMERCE

International Trade Administration

(C-560-819)


Final Affirmative Countervailing Duty Determination and Final 
Negative Critical Circumstances Determination: Certain Lined Paper 
Products from Indonesia

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (Department) has made a final 
determination that countervailable subsidies are being provided to 
producers and exporters of certain lined paper products (CLPP) from 
Indonesia. For information on the estimated countervailing duty rates, 
please see the ``Suspension of Liquidation'' section, below.

EFFECTIVE DATE:  August 16, 2006.

FOR FURTHER INFORMATION CONTACT: David Layton or David Neubacher, AD/
CVD Operations, Office 1, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
0371 or (202) 482-5823, respectively.

SUPPLEMENTARY INFORMATION:

Petitioner

    The petitioner in this investigation is the Association of American 
School Paper Suppliers and its individual members (MeadWestvaco 
Corporation; Norcom, Inc.; and Top Flight, Inc.) (petitioner).

Period of Investigation

    The period for which we are measuring subsidies, or period of 
investigation, is January 1, 2004 through December 31, 2004.

Case History

    The following events have occurred since the announcement of the 
preliminary
    determination on February 7, 2006, and subsequent publication in 
the Federal Register on February 13, 2006. See Notice of Preliminary 
Affirmative Countervailing Duty Determination: Certain Lined Paper 
Products from Indonesia, 71 FR 7524 (February 13, 2006) (Preliminary 
Determination).
    Prior to the Preliminary Determination, the petitioner submitted 
comments alleging that the Government of Indonesia (GOI) provided 
partial forgiveness of the debt owed by the Sinar Mas Group (SMG)/Asia 
Pulp & Paper (APP) to the Indonesian Bank Restructuring Agency (IBRA) 
and entrusted and directed creditors of APP to agree to a Master 
Restructuring Agreement (MRA), which resulted in preferential repayment 
terms and possible debt forgiveness. The Department did not include 
these alleged subsidies in its investigation. See Memorandum to Stephen 
J. Claeys, Deputy Assistant Secretary for Import Administration, 
entitled New Subsidy Allegation, dated February 10, 2006, which is on 
file in the Department's Central Records Unit in Room B-099 of the main 
Department building (CRU).
    Also on February 10, 2006,\1\ PT. Pabrik Kertas Tjiwi Kimia Tbk 
(TK) submitted comments on the Department's release of proprietary 
information to the counsel of an ineligible interested party and TK 
withdrew from the investigation as an active participant, but reserved 
its right as an interested party\2\ to participate in briefings or 
hearings. The Department spoke with TK's counsel and confirmed the 
company would not answer further questionnaires and did not expect 
verification of its information on the record.\3\ Following TK's 
withdrawal from the investigation, TK and the GOI submitted further 
comments on the record concerning the Department's APO procedures. The 
petitioner submitted comments on TK's and the GOI's filings on April 
21, 2006. We addressed TK's and the GOI's concerns in a letter to the 
parties on April 26, 2006.\4\
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    \1\ Per the Department's request, the submission was refiled on 
March 22, 2006.
    \2\ Upon learning of this possibility, we immediately contacted 
counsel for the company to determine its status on the case. The law 
firm promptly withdrew its application under the Administrative 
Protective Order (APO) in the cases involving Indonesia and 
certified destruction of all APO material it had received related to 
the Indonesia cases. This was done before February 10, 2006. The 
respondents did not express concern about any other party with APO 
access.
    \3\ See Memorandum from Susan Kuhbach, Director, to the File 
regarding Conversation with Counsel for PT. Pabrik Kertas Tjiwi 
Kimia Tbk.: Respondent's Withdrawal from Active Participation (March 
17, 2006, replacing memo placed on the record on February 17, 2006).
    \4\ See Letter from Stephen J. Claeys, Deputy Assistant 
Secretary for Import Administration to Claire Reade, Arnold & Porter 
LLP regarding Countervailing Duty Investigation: Certain Lined Paper 
Products from Indonesia (April 26, 2006).
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    On February 15, 2006, TK submitted ministerial error allegations 
relating to the Preliminary Determination. We addressed these 
ministerial error allegations in an March 8, 2006 memorandum to Stephen 
J. Claeys, Deputy Assistant Secretary for Import Administration, 
entitled Ministerial Error Allegations, which is on file in the CRU.
    We issued a supplemental questionnaire to the GOI on February 16, 
2006. On February 24, 2006,\5\ the GOI submitted a letter to the 
Department in which it stated that it would not provide a response to 
the Department's questionnaire. The GOI reiterated TK's concerns over 
the Department's APO procedures (see above) and stated that the GOI 
would not respond to any request from the Department that would involve 
the release of proprietary information. However, the GOI did state that 
it would respond to any requests by the Department for ``understanding 
Indonesian government laws and regulations and policies on the broader

[[Page 47175]]

level.''\6\ On March 28, 2006, we sent a letter to the GOI requesting 
that it clarify statements in its March 27, 2006 letter and also 
reissued the February 16, 2006 supplemental questionnaire to the 
government. We received a response to our clarification letter and 
partial response to our February 16, 2006 supplemental questionnaire on 
April 7, 2006. As the GOI refused to provide a complete response to our 
questionnaire and refused to allow the Department to conduct a 
comprehensive verification of its information on the record, we did not 
conduct verification.\7\
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    \5\ Per the Department's request, the submission was refiled on 
March 27, 2006.
    \6\ See id. at 6.
    \7\ See Memorandum from Constance Handley, Program Manager, to 
Stephen J. Claeys, Deputy Assistant Secretary for Import 
Administration, regarding Verification of Government of Indonesia 
Information (April 19, 2006).
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    On March 7, 2006, the Department published notification of 
alignment of the final determinations in the antidumping and 
countervailing duty investigations of CLPP from Indonesia. See Certain 
Lined Paper Products From India and Indonesia: Alignment of First 
Countervailing Duty Determination With Antidumping Duty Determination, 
71 FR 11379 (March 7, 2006). The Department subsequently postponed the 
final determinations for the antidumping and countervailing 
investigations of CLPP from Indonesia. See Notice of Postponement of 
Final Determination of Antidumping and Countervailing Duty 
Investigations and Extension of Provisional Measures: Certain Lined 
Paper Products from Indonesia, 71 FR 26925 (May 9, 2006).
    On March 30, 2006, the GOI requested that the Department provide 
clarification on its possible use of adverse facts available. We 
addressed the GOI's concerns in a letter to the GOI on April 5, 
2006.\8\
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    \8\ See Letter from Stephen J. Claeys, Deputy Assistant 
Secretary for Import Administration to Claire Reade, Arnold & Porter 
LLP regarding Countervailing Duty Investigation: Certain Lined Paper 
Products from Indonesia (April 5, 2006).
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    On April 19, 2006, we issued a deadline for the receipt of factual 
information. The GOI, TK and the petitioner submitted factual 
information on April 24, 2006. The GOI and TK filed responses to the 
petitioner's factual information on April 26 and 28, 2006, 
respectively.
    We received case briefs from the GOI, TK, and the petitioner on May 
1, 2006. The same parties submitted rebuttal briefs on May 8, 2006. No 
public hearing was held.
    On August 4, 2006, we placed publicly available data on the record 
of the investigation and requested comments from parties on the 
information. The petitioner, TK and the GOI provided comments and 
rebuttal comments to the information on August 7 and 8, 2006, 
respectively.

Scope of the Investigation

    The scope of this investigation includes certain lined paper 
products, typically school supplies,\9\ composed of or including paper 
that incorporates straight horizontal and/or vertical lines on ten or 
more paper sheets,\10\ including but not limited to such products as 
single- and multi-subject notebooks, composition books, wireless 
notebooks, looseleaf or glued filler paper, graph paper, and laboratory 
notebooks, and with the smaller dimension of the paper measuring 6 
inches to 15 inches (inclusive) and the larger dimension of the paper 
measuring 8-3/4 inches to 15 inches (inclusive). Page dimensions are 
measured size (not advertised, stated, or ``tear-out'' size), and are 
measured as they appear in the product (i.e., stitched and folded pages 
in a notebook are measured by the size of the page as it appears in the 
notebook page, not the size of the unfolded paper). However, for 
measurement purposes, pages with tapered or rounded edges shall be 
measured at their longest and widest points. Subject lined paper 
products may be loose, packaged or bound using any binding method 
(other than case bound through the inclusion of binders board, a spine 
strip, and cover wrap). Subject merchandise may or may not contain any 
combination of a front cover, a rear cover, and/or backing of any 
composition, regardless of the inclusion of images or graphics on the 
cover, backing, or paper. Subject merchandise is within the scope of 
this petition whether or not the lined paper and/or cover are hole 
punched, drilled, perforated, and/or reinforced. Subject merchandise 
may contain accessory or informational items including but not limited 
to pockets, tabs, dividers, closure devices, index cards, stencils, 
protractors, writing implements, reference materials such as 
mathematical tables, or printed items such as sticker sheets or 
miniature calendars, if such items are physically incorporated , 
included with, or attached to the product, cover and/or backing 
thereto.
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    \9\ For purposes of this scope definition, the actual use of or 
labeling these products as school supplies or non-school supplies is 
not a defining characteristic.
    \10\ There shall be no minimum page requirement for looseleaf 
filler paper.
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    Specifically excluded from the scope of this petition are:
 unlined copy machine paper;
 writing pads with a backing (including but not limited to 
products commonly known as ``tablets,'' ``note pads,'' ``legal pads,'' 
and ``quadrille pads''), provided that they do not have a front cover 
(whether permanent or removable). This exclusion does not apply to such 
writing pads if they consist of hole-punched or drilled filler paper;
 three-ring or multiple-ring binders, or notebook organizers 
incorporating such a ring binder provided that they do not include 
subject paper;
 index cards;
 printed books and other books that are case bound through the 
inclusion of binders board, a spine strip, and cover wrap;
 newspapers;
 pictures and photographs;
 desk and wall calendars and organizers (including but not 
limited to such products generally known as ``office planners,'' ``time 
books,'' and ``appointment books'');
 telephone logs;
 address books;
 columnar pads & tablets, with or without covers, primarily 
suited for the recording of written numerical business data;
 lined business or office forms, including but not limited to: 
preprinted business forms, lined invoice pads and paper, mailing and 
address labels, manifests, and shipping log books;
 lined continuous computer paper;
 boxed or packaged writing stationary (including but not 
limited to products commonly known as ``fine business paper,'' 
``parchment paper, `` and ``letterhead''), whether or not containing a 
lined header or decorative lines;
 Stenographic pads (``steno pads''), Gregg ruled,\11\ measuring 
6 inches by 9 inches;
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    \11\ ``Gregg ruling`` consists of a single- or double-margin 
vertical ruling line down the center of the page. For a six-inch by 
nine-inch stenographic pad, the ruling would be located 
approximately three inches from the left of the book.
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    Also excluded from the scope of these investigations are the 
following trademarked products:
 FlyTM lined paper products: A notebook, notebook 
organizer, loose or glued note paper, with papers that are printed with 
infrared reflective inks and readable only by a FlyTM pen-
top computer. The product must bear the valid trademark 
FlyTM.\12\
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    \12\ Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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 ZwipesTM: A notebook or notebook organizer made 
with a blended polyolefin writing surface as the cover and pocket 
surfaces of the notebook, suitable for writing using a specially-
developed permanent marker and erase system (known as a 
ZwipesTM pen).

[[Page 47176]]

This system allows the marker portion to mark the writing surface with 
a permanent ink. The eraser portion of the marker dispenses a solvent 
capable of solubilizing the permanent ink allowing the ink to be 
removed. The product must bear the valid trademark 
ZwipesTM.\13\
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    \13\ Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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 FiveStar[reg]AdvanceTM: A notebook or notebook 
organizer bound by a continuous spiral, or helical, wire and with 
plastic front and rear covers made of a blended polyolefin plastic 
material joined by 300 denier polyester, coated on the backside with 
PVC (poly vinyl chloride) coating, and extending the entire length of 
the spiral or helical wire. The polyolefin plastic covers are of 
specific thickness; front cover is .019 inches (within normal 
manufacturing tolerances) and rear cover is .028 inches (within normal 
manufacturing tolerances). Integral with the stitching that attaches 
the polyester spine covering, is captured both ends of a 1'' wide 
elastic fabric band. This band is located 2-3/8'' from the top of the 
front plastic cover and provides pen or pencil storage. Both ends of 
the spiral wire are cut and then bent backwards to overlap with the 
previous coil but specifically outside the coil diameter but inside the 
polyester covering. During construction, the polyester covering is sewn 
to the front and rear covers face to face (outside to outside) so that 
when the book is closed, the stitching is concealed from the outside. 
Both free ends (the ends not sewn to the cover and back) are stitched 
with a turned edge construction. The flexible polyester material forms 
a covering over the spiral wire to protect it and provide a comfortable 
grip on the product. The product must bear the valid trademarks 
FiveStar[reg]AdvanceTM.\14\
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    \14\ Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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 FiveStar FlexTM: A notebook, a notebook organizer, 
or binder with plastic polyolefin front and rear covers joined by 300 
denier polyester spine cover extending the entire length of the spine 
and bound by a 3-ring plastic fixture. The polyolefin plastic covers 
are of a specific thickness; front cover is .019 inches (within normal 
manufacturing tolerances) and rear cover is .028 inches (within normal 
manufacturing tolerances). During construction, the polyester covering 
is sewn to the front cover face to face (outside to outside) so that 
when the book is closed, the stitching is concealed from the outside. 
During construction, the polyester cover is sewn to the back cover with 
the outside of the polyester spine cover to the inside back cover. Both 
free ends (the ends not sewn to the cover and back) are stitched with a 
turned edge construction. Each ring within the fixture is comprised of 
a flexible strap portion that snaps into a stationary post which forms 
a closed binding ring. The ring fixture is riveted with six metal 
rivets and sewn to the back plastic cover and is specifically 
positioned on the outside back cover. The product must bear the valid 
trademark FiveStar FlexTM.\15\
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    \15\ Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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    Merchandise subject to this investigation is typically imported 
under headings 4820.10.2010, 4820.102020, 4820.10.2050, 4810.22.5044, 
4811.90.9090 of the Harmonized Tariff Schedule of the United States 
(HTSUS). The tariff classifications are provided for convenience and 
U.S. Customs and Border Protection (CBP) purposes; however, the written 
description of the scope of the investigation is dispositive.

Scope Comments

    On October 25, 2005, Continental Accessory Corporation 
(Continental) filed a request to exclude its fashion notebooks from the 
scope of the investigation of CLPP from India, Indonesia and the 
People's Republic of China. The petitioner submitted comments on 
Continental's request on November 16, 2005.
    The Department has analyzed both parties' comments and denied 
Continental's request to have its fashion notebooks excluded from the 
scope of the investigation. See Memorandum from Damian Felton, 
International Trade Compliance Analyst, to Stephen J. Claeys, Deputy 
Assistant Secretary for Import Administration, regarding Scope 
Exclusion/Clarification Request: Continental Accessory Corporation, 
dated March 20, 2006, which is on file in the CRU.

Injury Test

    Because Indonesia is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Tariff Act of 1930, as amended, (the 
Act), section 701(a)(2) of the Act applies to this investigation. 
Accordingly, the ITC must determine whether imports of the subject 
merchandise from Indonesia materially injure, or threaten material 
injury to, a U.S. industry. On October 31, 2005, the ITC published its 
preliminary determination that there is a reasonable indication that an 
industry in the United States is materially injured by reason of 
imports from China, India, and Indonesia. See Certain Lined Paper 
School Supplies From China, India and Indonesia, 70 FR 62329 (October 
31, 2005).

Critical Circumstances

    In the Preliminary Determination, the Department preliminary 
determined that critical circumstances did not exist with respect to 
imports of CLPP from Indonesia, in accordance with 703(e)(1) of the 
Act, because there was no indication that the respondent in this 
investigation received subsidies inconsistent with the WTO Subsidies 
Agreement, i.e., export subsidies.
    Since the Preliminary Determination, the Department has not 
received or found additional information on the record that would 
contradict our preliminary decision that TK does not receive subsidies 
inconsistent with the WTO Subsidies Agreement. Therefore, in accordance 
with 705(a)(2) of the Act, we continue to find that critical 
circumstances do not exist with respect to imports of subject 
merchandise from Indonesia.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the ``Issues and Decision 
Memorandum'' from Stephen J. Claeys, Deputy Assistant Secretary for 
Import Administration, to Joseph A. Spetrini, Acting Assistant 
Secretary for Import Administration, dated August 9, 2006 (Decision 
Memorandum), which is hereby adopted by this notice. Attached to this 
notice as an Appendix is a list of the issues which parties have raised 
and to which we have responded in the Decision Memorandum. Parties can 
find a complete discussion of all issues raised in this investigation 
and the corresponding recommendations in this public memorandum which 
is on file in the CRU. In addition, a complete version of the Decision 
Memorandum can be accessed directly on the Internet at http://ia.ita.doc.gov/frn/index.html. The paper copy and electronic version of 
the Decision Memorandum are identical in content.

Suspension of Liquidation

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have 
calculated an individual rate for the company under investigation, TK. 
With respect to the ``all others'' rate, section 705(c)(5)(A)(ii) of 
the Act provides that if the countervailable subsidy rates established 
for all exporters and

[[Page 47177]]

producers individually investigated are determined entirely under 
section 776 of the Act, the Department may use any reasonable method to 
establish an ``all others'' rate for exporters and producers not 
individually investigated. In this case, although the rate for the only 
investigated company is based entirely on facts available under section 
776 of the Act, there is no other information on the record upon which 
we could determine an ``all others'' rate. As a result, we have used 
the rate for TK as the ``all others'' rate.

------------------------------------------------------------------------
                Exporter/Manufacturer                  Net Subsidy Rate
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PT. Pabrik Kertas Tjiwi Kimia Tbk...................       40.55 percent
All Others..........................................       40.55 percent
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    As a result of our Preliminary Determination and pursuant to 
section 703(d) of the Act, we instructed the CBP to suspend liquidation 
of all entries of certain lined paper products from Indonesia which 
were entered or withdrawn from warehouse, for consumption on or after 
February 13, 2006, the date of the publication of the Preliminary 
Determination in the Federal Register. In accordance with section 
703(d) of the Act, we instructed CBP to discontinue the suspension of 
liquidation for subject merchandise for countervailing duty purposes 
entered on or after June 13, 2006, but to continue the suspension of 
liquidation of entries made from February 13, 2006, through June 12, 
2006.
    We will issue a countervailing duty order and reinstate the 
suspension of liquidation under section 706(a) of the Act if the ITC 
issues a final affirmative injury determination, and will require a 
cash deposit of estimated countervailing duties for such entries of 
merchandise in the amounts indicated above. If the ITC determines that 
material injury, or threat of material injury, does not exist, this 
proceeding will be terminated and all estimated duties deposited or 
securities posted as a result of the suspension of liquidation will be 
refunded or canceled.

ITC Notification

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

Return or Destruction of Proprietary Information

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder to parties 
subject to an APO of their responsibility concerning the destruction of 
proprietary information disclosed under APO in accordance with 19 CFR 
351.305(a)(3). Failure to comply is a violation of the APO.
    This determination is published pursuant to sections 703(f) and 
777(i) of the Act.

    Dated: August 9, 2006.
Joseph A. Spetrini,
Acting Assistant Secretaryfor Import Administration.

APPENDIX

List of Comments and Issues in the Decision Memorandum

Comment 1: Application of Adverse Facts Available
Comment 2: Attribution of Subsidies Received by Cross-owned Companies 
on Input Products
Comment 3: Are Subsidized Logs ``Primarily Dedicated'' to Certain Lined 
Paper Products?
Comment 4: Provision of Standing Timber at Preferential Rates
Comment 5: Government Ban on Log Exports
Comment 6: Subsidized Funding of Reforestation (Hutan Tanaman Industria 
(HTI) Program)
Comment 7: Loan Guarantee
Comment 8: Calculation of Subsidy Denominator
[FR Doc. E6-13472 Filed 8-15-06; 8:45 am]
BILLING CODE 3510-DS-S