[Federal Register Volume 72, Number 233 (Wednesday, December 5, 2007)]
[Notices]
[Pages 68568-68571]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-23573]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[C-570-926]
Sodium Nitrite from the People's Republic of China: Initiation of
Countervailing Duty Investigation
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: (December 5, 2007.
FOR FURTHER INFORMATION CONTACT: Sean Carey or Gene Calvert, AD/CVD
Operations, Office 6, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-3964 and (202) 482-3586, respectively.
SUPPLEMENTARY INFORMATION:
Initiation of Investigation:
The Petition
On November 8, 2007, the Department of Commerce (the Department)
received a petition filed in proper form by General Chemical LLC
(petitioner). On November 14 and November 15, 2007, the Department
issued requests for additional information and clarification of certain
areas of the petition involving general issues and the countervailable
subsidy allegations, respectively. Based on the Department's request,
petitioner filed additional information concerning the petition on
November 19 and November 20, 2007.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as
amended (the Act), petitioner alleges that manufacturers, producers, or
exporters of sodium nitrite in the People's Republic of China (the PRC)
received 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 petitioner filed this petition on behalf
of the domestic industry because it is an interested party as defined
in section 771(9)(C) of the Act, and petitioner has demonstrated
sufficient industry support with respect to the countervailing duty
investigation that it
[[Page 68569]]
is requesting the Department to initiate (see, infra, ``Determination
of Industry Support for the Petition'').
Period of Investigation
The anticipated period of investigation (POI) is calendar year
2006. See 19 CFR 351.204(b)(2).
Scope of Investigation
The merchandise covered by this investigation is sodium nitrite in
any form, at any purity level. In addition, the sodium nitrite covered
by this investigation may or may not contain an anti-caking agent.
Examples of names commonly used to reference sodium nitrite are nitrous
acid, sodium salt, anti-rust, diazotizing salts, erinitrit, and
filmerine. The chemical composition of sodium nitrite is NaNO2 and it
is generally classified under subheading 2834.10.1000 of the Harmonized
Tariff Schedule of the United States (HTSUS). The American Chemical
Society Chemical Abstract Service (CAS) has assigned the name ``sodium
nitrite'' to sodium nitrite. The CAS registry number is 7632-00-0. For
purposes of the scope of this investigation, the narrative description
is dispositive, not the tariff heading, CAS registry number or CAS
name, which are provided for convenience and customs purposes.
Comments on Scope of Investigation
During our review of the petition, we discussed the scope with
petitioner to ensure that it is an accurate reflection of the
merchandise 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, N.W., Washington,
D.C. 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
determination.
Consultations
Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department
invited representatives of the Government of the People's Republic of
China (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 November 26, 2007. See the
Memorandum to the File, entitled, ``Consultations with Officials from
the Government of the People's Republic of China on the Countervailing
Duty Petition: Sodium Nitrite from the People's Republic of China''
(November 26, 2007), a public document on file in the CRU.
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 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, which normally will be the scope as defined in the
petition).
With regard to the domestic like product, petitioner does not offer
a definition of domestic like product distinct from the scope of the
investigation. Based on our analysis of the information submitted on
the record, we have determined that sodium nitrite constitutes a single
domestic like product and we have analyzed industry support in terms of
that domestic like product. For a discussion of the domestic like
product analysis in this case, see the Countervailing Duty
Investigation Initiation Checklist: Sodium Nitrite from the People's
Republic of China (PRC) (Initiation Checklist), Industry Support at
Attachment II, 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 Petitioner has established industry support. To
establish industry support, the Petitioner demonstrated that it was the
sole producer of the domestic like product in 2006. Therefore, 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. In addition, the
domestic producers have met the statutory criterion 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 criterion 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
[[Page 68570]]
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 petitioner has filed the petition on behalf of
the domestic industry because it is an interested party as defined in
sections 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 to initiate. See 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 subsidized imports of the
subject merchandise. The petitioner contends that the industry's
injured condition is illustrated by reduced market share, lost sales,
reduced production capacity and capacity utilization rate, reduced
shipments, underselling and price depressing and suppressing effects,
lost revenue, reduced employment, decline in financial performance, and
an increase in import penetration. 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 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
petitioner supporting the allegations. The Department has examined the
countervailing duty petition on sodium nitrite 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 sodium nitrite in the PRC
receive countervailable subsidies. For a discussion of evidence
supporting our initiation determination, see Initiation Checklist.
We are including in our investigation the following programs
alleged in the petition to have provided countervailable subsidies to
producers and exporters of the subject merchandise:
GOC Loan Program
1. Loans and Interest Subsidies Related to the Northeast Revitalization
Program
GOC Grant Programs
2. The State Key Technology Renovation Project Fund
3. Grants to Loss-Making State-Owned Enterprises
GOC Provision of Goods or Services for Less than Adequate Remuneration
4. Provision of Electricity to State-Owned Enterprises (SOEs) for Less
than Adequate Remuneration
5. Provision of Land to SOEs for Less than Adequate Remuneration
GOC Income Tax Programs
6. Income Tax Exemption for Export-Oriented FIEs
7. Preferential Tax Policies for Foreign Invested Enterprises (FIEs)
(Two Free, Three Half Program)
8. Reduced Income Tax Rates for FIEs Based on Location
9. Corporate Income Tax Refund Program for Reinvestment of FIE Profits
in Export-Oriented Enterprises
10. Reduced Income Tax Rate for New or High Technology Enterprises
11. Preferential Tax Policies for Research and Development by FIEs
12. Income Tax Credits on Purchases of Domestically Produced Equipment
by Domestically Owned Companies
13. Income Tax Credits on Purchases of Domestically Produced Equipment
by FIEs
14. Reduced Income Tax Rate for FIEs Under the West Revitalization
Program
15. Income Tax Reduction or Exemption for Export-Oriented or High
Technology Enterprises under the West Revitalization Program
16. Preferential Tax Policies Under the West Revitalization Program
GOC Indirect Tax Programs and Import Tariff Programs
17. VAT Rebate for FIE Purchases of Domestically Produced Equipment
18. VAT and Tariff Exemptions for FIEs and Certain Domestic Enterprises
Using Imported Equipment in Encouraged Industries
Provincial Loan Program
19. Reduced Interest Rate Loans Provided by Liaoning Province
Provincial Grant Programs
20. Provincial Export Interest Subsidies (Guangdong and Zhejiang
Provinces)
21. Guangdong Province Funds for Outward Expansion of Industries
Provincial and Local Provision of Goods for Less than Adequate
Remuneration
22. Provision of Land for Less than Adequate Remuneration (Jiangsu and
Zhejiang Provinces, and Chongqing Municipality)
23. Provision of Electricity for Less than Adequate Remuneration
(Jiangsu and Zhejiang Provinces)
24. Provision of Water for Less than Adequate Remuneration (Zhejiang
Province)
Provincial and Local Income Tax Programs
25. Income Tax Exemption and Reduction Programs (Provinces of Jiangsu,
Zhejiang, Guangdong, and Shandong; Municipalities of Beijing, Tianjin,
Shanghai, and Chongqing)For further information explaining why the
Department is investigating these programs, see the 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:
GOC Loan Program
1. Government Policy Lending Program
Petitioner alleges that under the GOC's National Tenth Five-year
Plan as well as the Tenth and Eleventh Five-year plans of the Chemical
Industry, sodium nitrite producers may benefit from the provision of
loans by state-owned commercial banks as part of the GOC's policy to
encourage and to advance the chemical industry. In support of its
allegation, Petitioner provided translated copies of the ``Tenth Five-
year Plan for National Economic and Social Development,'' and the
``Tenth Five-year Plan of the Chemical Industry and Its Development,''
and a short, translated excerpt of the ``Eleventh Five-year Plan of the
Chemical Industry and Its Development.'' Our review of these documents
did not indicate that financing or loans were available pursuant to the
GOC's Chemical Policy.
[[Page 68571]]
Accordingly, we find that petitioner has not provided sufficient
information to warrant initiation of an investigation of this program.
GOC Provision of Goods for Less than Adequate Remuneration
2. Provision of Natural Gas and Water to State-Owned Enterprises (SOEs)
for Less than Adequate Remuneration
Petitioner alleges that the GOC provides natural gas and water to
SOEs and special industrial sectors at subsidized prices. Petitioner
further alleges that end-user prices for natural gas and for water are
set by the National Development and Reform Commission, and rarely
reflect the true market price of these commodities. For purposes of
this initiation, we find that petitioner has not sufficiently alleged
the elements necessary for a less than adequate remuneration subsidy,
as identified in 19 CFR 351.511. Petitioner has not provided sufficient
information demonstrating that the GOC has provided natural gas and
water for less than adequate remuneration and that this program is
specific. Accordingly, we find that petitioner has not provided
sufficient information to warrant initiation of an investigation of
these programs.
GOC Indirect Tax Program and Import Tariff Program
3. VAT Exemptions on Exports
Petitioner alleges that the GOC enterprises are exempted from
paying import tariffs and VAT payments on imported equipment provided
that these goods are not for resale. Petitioner notes that in certain
cases, a full 17-percent VAT exemption will apply upon export.
Petitioner states that the program, by definition, is conditioned upon
export performance, and therefore, is an export subsidy. Petitioner
further alleges that this is a prohibited export subsidy if the
exemption or reduction of indirect taxes on the exported product
exceeds the indirect taxes levied on the inputs into the exported
product. We find that 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 are not initiating an investigation of this program.
Application of the Countervailing Duty Law to the PRC
The Department has treated the PRC as a non-market economy (NME)
country in all past antidumping 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 e.g., 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 2001-2001 Administrative Review, 68
FR 70488, 70488-89 (December 18, 2003).
In the final affirmative countervailing duty determination on
coated free sheet paper from the PRC, the Department determined that
the current nature of the PRC economy does not create obstacles to
applying the necessary criteria in the countervailing duty law. See
Coated Free Sheet Paper from the People's Republic of China: Final
Affirmative Countervailing Duty Determination, 72 FR 60645 (October 25,
2007), and the accompanying Issues and Decision Memorandum, at Comment
1. Therefore, because petitioner has provided sufficient allegations
and support of its allegations to meet the statutory criteria for
initiating a countervailing duty investigation of sodium nitrite from
the PRC, initiation of a countervailing duty investigation is warranted
in this case.
Respondent Selection
For this investigation, the Department expects to select
respondents based on U.S. Customs and Border Protection (CBP) data for
U.S. imports during the POI. We intend to 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 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, as
provided under 19 CFR 351.203(c)(2).
ITC Notification
We have notified the ITC of our initiation, as required by section
702(d) of the Act.
Preliminary Determination by the ITC
The ITC will preliminarily determine, within 25 days after the date
on which it receives notice of this initiation, whether there is a
reasonable indication that imports of subsidized sodium nitrite from
the PRC are materially injuring, or threatening 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: November 28, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-23573 Filed 12-4-07; 8:45 am]
BILLING CODE 3510-DS-S