[Federal Register Volume 72, Number 212 (Friday, November 2, 2007)]
[Notices]
[Pages 62209-62212]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-21616]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-921]


Notice of Initiation of Countervailing Duty Investigation: 
Lightweight Thermal Paper from the People's Republic of China

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

EFFECTIVE DATE: November 2, 2007.

FOR FURTHER INFORMATION CONTACT: Scott Holland or Nancy Decker, AD/CVD 
Operations, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone: (202) 482-1279 and (202) 482-0196, 
respectively.

SUPPLEMENTARY INFORMATION:

The Petition

    On September 19, 2007, the Department of Commerce (the 
``Department'') received a petition filed in proper form by Appleton 
Papers Inc. (the ``petitioner'') a domestic producer of lightweight 
thermal paper (``LWTP''). In response to the Department's requests, the 
petitioner provided timely information supplementing the petition on 
September 28, October 2, and October 23, 2007.
    In accordance with section 702(b)(1) of the Tariff Act of 1930, as 
amended (``the Act''), the petitioner alleges that manufacturers, 
producers, or exporters of LWTP 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 injuring, 
or threatening material injury to, an industry in the United States.
    The Department finds that the petitioner filed the petition on 
behalf of the domestic industry because it is an interested party as 
defined in section 771(9)(C) of the Act and the petitioner has 
demonstrated sufficient industry support with respect to the 
countervailing duty investigation (see ``Determination of Industry 
Support for the Petition'' section below).

Period of Investigation

    The period of investigation is January 1, 2006, through December 
31, 2006.

Scope of the Investigation

    The merchandise covered by each of this investigation includes 
certain lightweight thermal paper, which is thermal paper with a basis 
weight of 70 grams per square meter (``g/m\2\'') (with a tolerance of 
 4.0 g/m\2\) or less; irrespective of dimensions;\1\ with 
or without a base coat\2\ on one or both sides; with thermal active 
coating(s)\3\ on one or both sides that is a mixture of the dye and the 
developer that react and form an image when heat is applied; with or 
without a top coat;\4\ and without

[[Page 62210]]

an adhesive backing. Certain lightweight thermal paper is typically 
(but not exclusively) used in point-of-sale applications such as ATM 
receipts, credit card receipts, gas pump receipts, and retail store 
receipts. The merchandise subject to these investigations may be 
classified in the Harmonized Tariff Schedule of the United States 
(``HTSUS'') under subheadings 4811.90.8040 and 4811.90.9090.\5\ 
Although HTSUS subheadings are provided for convenience and customs 
purposes, the written description of the scope of this investigation is 
dispositive.
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    \1\ LWTP is typically produced in jumbo rolls that are slit to 
the specifications of the converting equipment and then converted 
into finished slit rolls. Both jumbo rolls and converted rolls (as 
well as LWTP in any other forms, presentations, or dimensions) are 
covered by the scope of these investigations.
    \2\ A base coat, when applied, is typically made of clay and/or 
latex and like materials and is intended to cover the rough surface 
of the paper substrate and to provide insulating value.
    \3\ A thermal active coating is typically made of sensitizer, 
dye, and co-reactant.
    \4\ A top coat, when applied, is typically made of polyvinyl 
acetone, polyvinyl alcohol, and/or like materials and is intended to 
provide environmental protection, an improved surface for press 
printing, and/or wear protection for the thermal print head.
    \5\ HTSUS subheading 4811.90.8000 was a classification used for 
LWTP until January 1, 2007. Effective that date, subheading 
4811.90.8000 was replaced with 4811.90.8020 (for gift wrap, a non-
subject product) and 4811.90.8040 (for ``other,'' including LWTP). 
HTSUS subheading 4811.90.9000 was a classification for LWTP until 
July 1, 2005. Effective that date, subheading 4811.90.9000 was 
replaced with 4811.90.9010 (for tissue paper, a non-subject product) 
and 4811.90.9090 (for ``other,'' including LWTP). Petitioner 
indicated that, from time to time, LWTP also may have been entered 
under HTSUS subheading 3703.90, HTSUS heading 4805, and perhaps 
other subheadings of the HTSUS.
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Comments on Scope of Investigation

    During our review of the petition, we discussed the scope with the 
petitioner to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking 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 within 20 calendar days of the 
publication of this notice. Comments should be addressed to Import 
Administration's Central Records Unit (``CRU''), Room 1870, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230. 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 
determinations.

Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department 
invited representatives of the Government of the PRC for consultations 
with respect to the countervailing duty petition. The Department held 
these consultations in Beijing, China, with representatives of the 
Government of the PRC on September 28, 2007. See the Memorandum to The 
File, entitled, ``Consultations with Officials from the Government of 
the People's Republic of China'' (September 28, 2007) on file in the 
CRU of the Department of Commerce, Room B-099.

Determination of Industry Support for the Petitions

    Section 702(b)(1) of the Act requires that a petition be filed by 
or 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 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir. 
1989), cert. denied 492 U.S. 919 (1989).
    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition).
    With regard to the domestic like product, the petitioner does not 
offer a definition of domestic like product distinct from the scope of 
the investigation. Based on our analysis of the information submitted 
on the record, we have determined that lightweight thermal paper, both 
jumbo rolls and converted slit rolls, constitute a single domestic like 
product, which is defined further in the ``Scope of the Investigation'' 
section above, 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: Lightweight Thermal Paper from the People's 
Republic of China (PRC Initiation Checklist) at Attachment II, on file 
in the Central Records Unit, Room B-099 of the main Department of 
Commerce building.
    On October 9, 2007, the Department extended the initiation deadline 
by 20 days to poll the domestic industry in accordance with section 
702(c)(4)D) of the Act, because it was ``not clear from the petitions 
whether the industry support criteria have been met...'' See Notice of 
Extension of the Deadline for Determining the Adequacy of the 
Antidumping Duty Petitions: Lightweight Thermal Paper from Germany, the 
Republic of Korea, and the People's Republic of China; and the 
Countervailing Duty Petition: Lightweight Thermal Paper from the 
People's Republic of China, 72 FR 58639 (October 16, 2007).
    On October 12 and 15, 2007, we issued polling questionnaires to all 
known producers of jumbo rolls and converted slit rolls of lightweight 
thermal paper identified in the petitions, submissions from other 
interested parties, and by the ITC. The questionnaires are on file in 
the CRU in room B-099 of the main Department of Commerce building. We 
requested that each company complete the polling questionnaire, certify 
its response, and fax its response to the Department by the due date. 
For a detailed discussion of the responses received see PRC Initiation 
Checklist at Attachment II.
    Our analysis of the data indicates that the domestic producers of 
lightweight thermal paper who support the petitions

[[Page 62211]]

account for at least 25 percent of the total production of the domestic 
like product and more than 50 percent of the production (by quantity 
and U.S. dollar sales value) of the domestic like product produced by 
that portion of the industry expressing support for, or opposition to, 
the petition. See PRC Initiation Checklist at Attachment II. 
Accordingly, the Department determines that the industry support 
requirements of section 702(c)(4)(A) of the Act have been met. 
Therefore, the Department determines that the petitioner filed the 
petition on behalf of the domestic industry because it is an interested 
party as defined in section 771(9)(C) of the Act and it has 
demonstrated sufficient industry support with respect to the 
countervailing duty investigation that it is requesting the Department 
initiate. See PRC Initiation Checklist at Attachment II.

Injury Test

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

Allegations and Evidence of Material Injury and Causation

    The petitioner alleges that the U.S. industry producing the 
domestic like product is being materially injured, or is threatened 
with material injury, by reason of the individual and cumulated 
subsidized imports of the subject merchandise. The petitioner contends 
that the industry's injured condition is illustrated by reduced market 
share, increased inventories, lost sales, reduced production, reduced 
capacity and capacity utilization rate, reduced shipments, underselling 
and price depression or suppression, lost revenue, and a decline in 
financial performance. We have assessed the allegations and supporting 
evidence regarding 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 PRC 
Initiation Checklist at Attachment III (Injury).

Initiation of Countervailing Duty Investigation

    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 
petitioner(s) supporting the allegations. The Department has examined 
the countervailing duty petition on LWTP from the PRC and finds that it 
complies with the requirements of section 702(b) of the Act. Therefore, 
in accordance with section 702(b) of the Act, we are initiating a 
countervailing duty investigation to determine whether manufacturers, 
producers, or exporters of LWTP in the PRC receive countervailable 
subsidies. For a discussion of evidence supporting our initiation 
determination, see PRC Initiation Checklist.
    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in the PRC:
    Preferential Lending
    1. Government Policy Lending Program
    2. Loans provided pursuant to the Northeast Revitalization Program
    3. Loan guarantees from government-owned and controlled banks
    Income Tax Programs
    4. ``Two Free, Three Half'' program
    5. Income tax exemption program for export-oriented foreign 
investment enterprises (``FIEs'')
    6. Corporate income tax refund program for reinvestment of FIE 
profits in export-oriented enterprises
    7. Local income tax exemption and reduction program for 
``productive'' FIEs
    8. Reduced income tax rates for FIEs based on location
    9. Reduced income tax rate for knowledge or technology intensive 
FIEs
    10. Reduced income tax rate for high or new technology FIEs
    11. Preferential tax policies for research and development at FIEs
    12. Income tax credits on purchases of domestically produced 
equipment by domestically-owned companies
    Indirect Tax Programs and Import Tariff Program
    13. Export payments characterized as VAT rebates
    14. VAT and tariff exemptions on imported equipment
    Grant Programs
    15. State Key Technology Renovation Program Fund
    Provincial Subsidy Programs
    16. Funds for ``outward expansion'' of industries in Guangdong 
Province
    17. Export interest subsidy funds for enterprises located in 
Shenzhen City or Zhejiang Province
    18. Loans and interest subsidies pursuant to the Liaoning 
Province's five-year framework
    Currency Programs
    19. Currency retention
For further information explaining why the Department is investigating 
these programs, see China Initiation Checklist.
    We are not including in our investigation the following programs 
alleged to benefit producers and exporters of the subject merchandise 
in the PRC:
    A. Currency manipulation
    Petitioner alleges that the PRC government's policy of maintaining 
an undervalued RMB is an export subsidy that provides either a direct 
transfer of funds or the provision of a good or service at less than 
adequate remuneration. Petitioner has not sufficiently alleged the 
elements necessary for the imposition of a countervailing duty and did 
not support the allegation with reasonably available information. 
Therefore, we do not plan to investigate the currency manipulation 
program.
    B. Provision Of Goods Or Services For Less Than Adequate 
Remuneration
    1. Electricity and natural gas
    2. Water
    3. Papermaking chemicals
    4. Land

Respondent Selection

    For this investigation, the Department expects to select 
respondents based on U.S. Customs and Border Protection data for U.S. 
imports during the POI. We intend to make our decision regarding 
respondent selection within 20 days of publication of this Federal 
Register notice. The Department invites comments regarding the CBP data 
and respondent selection within seven calendar days of publication of 
this Federal Register notice.

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 Government 
of the PRC. As soon as and 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.

[[Page 62212]]

Preliminary Determination by the ITC

    The ITC will preliminarily determine, within 25 days after the date 
on which it receives notice of the initiation, whether there is a 
reasonable indication that imports of subsidized LWTP from the PRC are 
causing material injury, or threatening to cause material injury, to a 
U.S. industry. See section 703(a)(2) of the Act. A negative ITC 
determination will result in the investigation being terminated; 
otherwise, the investigation will proceed according to statutory and 
regulatory time limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: October 29, 2007.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
[FR Doc. E7-21616 Filed 11-1-07; 8:45 am]
BILLING CODE 3510-DS-S