[Federal Register Volume 73, Number 122 (Tuesday, June 24, 2008)]
[Notices]
[Pages 35639-35642]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-14256]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-917]


Laminated Woven Sacks From the People's Republic of China: Final 
Affirmative Countervailing Duty Determination and Final Affirmative 
Determination, in Part, of Critical Circumstances

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) has reached a 
final determination that countervailable subsidies are being provided 
to producers/exporters of laminated woven sacks (LWS) from the People's 
Republic of China (PRC). For information on the estimated subsidy 
rates, see the ``Final Determination'' section of this notice.

EFFECTIVE DATE: June 24, 2008.

FOR FURTHER INFORMATION CONTACT: Sean Carey, Gene Calvert, or Paul 
Matino, AD/CVD Operations, Office 6, Import Administration, 
International Trade Administration, U.S. Department of Commerce, Room 
7866, 14th Street and Constitution Avenue, NW, Washington, DC 20230; 
telephone: (202) 482-3964, (202) 482-3586, or (202) 482-4146, 
respectively.

SUPPLEMENTARY INFORMATION:

Case History

    The following events have occurred since the publication of the 
preliminary determination in the Federal Register on December 3, 2007. 
See Laminated Woven Sacks From the People's Republic of China: 
Preliminary Affirmative Countervailing Duty Determination; Preliminary 
Affirmative Determination of Critical Circumstances, In Part; and 
Alignment of Final Countervailing Duty Determination with Final 
Antidumping Duty Determination, 72 FR 67893 (December 3, 2007) 
(Preliminary Determination). On December 13, 2007, the Department 
issued supplemental questionnaires to Zibo Aifudi Plastic Packaging 
Co., Ltd. (Aifudi) and Shandong Shouguang Jianyuanchun Co., Ltd. and 
its cross-owned affiliate Shandong Longxing Plastic Products Co., Ltd. 
(SSJ/SLP).\1\ We issued a supplemental questionnaire to the Government 
of the People's Republic of China (GOC) on December 14, 2007. We 
received responses to these questionnaires from SSJ/SLP on January 2, 
2008, and from the GOC and Aifudi on January 3, 2008. We issued an

[[Page 35640]]

additional supplemental questionnaire to SSJ/SLP on January 11, 2008, 
and received a response on January 17, 2008. On December 27, 2007, the 
Department received requests for a hearing from 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, 
petitioners), and from the GOC.
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    \1\ SSJ was one of the four mandatory company respondents 
selected by the Department. See Memorandum to Stephen J. Claeys, 
Deputy Assistant Secretary for Import Administration, ``Respondent 
Selection'' (July 31, 2007). This memorandum is on file in the 
Central Records Unit (CRU), Room 1117 of the main Commerce building. 
Subsequently, we determined that SSJ was cross-owned with SLP (see 
Preliminary Determination, 72 FR at 67900) (December 3, 2007), and 
for purposes of this final determination, we are referring to these 
mandatory respondents as SSJ/SLP. The other three mandatory company 
respondents are: Han Shing Chemical Co., Ltd. (Han Shing Chemical), 
Ningbo Yong Feng Packaging Co., Ltd. (Ningbo), Shangdong Qilu 
Plastic Fabric Group, Ltd. (Qilu). On October 24, 2007, the 
Department accepted Aifudi as a voluntary respondent for the 
investigation pursuant to 19 CFR 351.204(d)(2). See Memorandum to 
Stephen J. Claeys, Deputy Assistant Secretary for Import 
Administration, ``Voluntary Respondent Selection'' (October 24, 
2007). This memorandum is on file in the Department's CRU.
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    Parties submitted timely comments on the Department's analysis of 
land-use rights as requested in the Preliminary Determination. 
Subsequent to the Preliminary Determination, parties also submitted 
factual information, comments, or clarifying information at several 
points prior to this final determination based on deadlines for 
submissions of factual information and/or arguments established by the 
Department or in accordance with 19 CFR 351.301(a)(1).
    On January 22, 2008, the Department decided not to verify SSJ/SLP. 
See Letter to SSJ/SLP, Countervailing Duty Investigation: Laminated 
Woven Sacks from the People's Republic of China (January 22, 2008) (on 
file in the Department's CRU). From January 16 through January 25, 
2008, we conducted verification of the questionnaire responses 
submitted by the GOC, including the national, provincial, and local 
governments, and Aifudi. The Department issued verification reports on 
February 28, 2008 and March, 4, 2008. See Memoranda to the File, 
Countervailing Duty Investigation: Laminated Woven Sacks (LWS) from the 
People's Republic of China: Verification of the Questionnaire Responses 
Submitted by the Government of the People's Republic of China (GOC) - 
Central Government; Countervailing Duty Investigation: Laminated Woven 
Sacks (LWS) from the People's Republic of China: Verification of the 
Questionnaire Responses Submitted by the Government of the People' 
Republic Of China (GOC) - Provincial and Local Government; and 
Countervailing Duty Investigation: Laminated Woven Sacks (LWS) from the 
People's Republic of China: Verification of the Questionnaire Responses 
Submitted by Zibo Aifudi Plastic Packaging Co., Ltd.
    On April 22, 2008, we issued our post-preliminary determination 
regarding the new subsidy allegations, which we had decided to 
investigate on November 2, 2007. See Memorandum to David M. Spooner, 
Assistant Secretary for Import Administration, Countervailing Duty 
Investigation of Laminated Woven Sacks from the People's Republic of 
China; Post-Preliminary Analysis of New Subsidy Allegations (April 22, 
2008) (Post-Preliminary Analysis), on file in the Department's CRU.
    We received case briefs from the GOC, Aifudi, and petitioners on 
May 2, 2008. The same parties submitted rebuttal briefs on May 7, 2008. 
On May 8, 2008, the GOC's case brief was returned because the 
Department determined that it contained untimely new factual 
information, as well as timely filed new factual information related to 
the Department's Post-Preliminary Analysis. The GOC resubmitted its 
case brief on May 12, 2008 without the untimely filed new factual 
information. On May 8, 2008 we informed all parties that they had an 
opportunity to rebut the new factual information submitted by the GOC 
pertaining to the Department's Post-Preliminary Analysis. On May 12, 
2008, petitioners submitted factual information to rebut information 
provided by the GOC. We held a public hearing for this investigation on 
May 14, 2008.

Period of Investigation

    The period of investigation (POI) for which we are measuring 
subsidies is calendar year 2006.

Scope of the Investigation

    In the Preliminary Determination, we stated that we had received 
scope comments from petitioners, and that such comments would be 
addressed in the preliminary determination of the companion antidumping 
investigation. See Preliminary Determination, 72 FR at 67894. Based on 
those comments, the Department determined to amend the scope of the 
investigation and afforded interested parties the opportunity to 
comment on those changes. See Laminated Woven Sacks From the People's 
Republic of China: Preliminary Determination of Sales at Less Than Fair 
Value, Partial Affirmative Determination of Critical Circumstances, and 
Postponement of Final Determination, 73 FR 5801 (January 31, 2008). No 
parties provided comments, and as such, we are making no changes to the 
scope as set forth in the preliminary determination in the companion 
antidumping investigation. See id.
    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, regardless of the width of the strip; with or 
without an extrusion coating of polypropylene and/or polyethylene on 
one or both sides of the fabric; 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;\2\ 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 (including sheets, lay-flat tubing, and 
sleeves); with or without handles; with or without special closing 
features; not exceeding one kilogram in weight. Laminated woven sacks 
are typically used for retail packaging of consumer goods such as pet 
foods and bird seed.
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    \2\ ``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 polyethylene 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 (including sheets, lay-flat tubing, and sleeves), laminated 
woven sacks may be classifiable under other HTSUS subheadings including 
3917.39.0050, 3921.90.1100, 3921.90.1500, and 5903.90.2500.
    If the polypropylene strips and/or polyethylene strips making up 
the fabric measure more than 5 millimeters in width, laminated woven 
sacks may be classifiable under other HTSUS subheadings including 
4601.99.0500, 4601.99.9000, and 4602.90.000. Although HTSUS subheadings 
are provided for convenience and customs purposes, the written 
description of the scope of this investigation is dispositive.

Injury Test

    Because the PRC 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 International Trade Commission (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 
such imports materially retard the

[[Page 35641]]

establishment of an industry in the United States. On August 14, 2007, 
the ITC published its preliminary determination that there is a 
reasonable indication that an industry in the United States is 
materially retarded by reason of imports from the PRC of Laminated 
Woven Sacks. See Laminated Woven Sacks from China, USITC Pub. 3942, 
Inv. Nos. 701-TA-450 and 731- TA- 1122 (Preliminary) (August 2007).

Analysis of Subsidy Programs and Comments Received

    The subsidy programs under investigation and the issues raised by 
interested parties in their case briefs and rebuttal briefs on the 
Preliminary Determination and the Post-Preliminary Analysis, are 
discussed in the Issues and Decision Memorandum for the Final 
Determination in the Countervailing Duty Determination of Laminated 
Woven Sacks from the People's Republic of China (Decision Memorandum). 
A list of the subsidy programs and of the issues that parties have 
raised is attached to this notice as Appendix I. Parties can find a 
complete discussion of all of the subsidy programs and issues raised in 
this investigation and the corresponding recommendations in this public 
memorandum, which is on file in the Department's CRU. A complete 
version of the Decision Memorandum is available at http://www.trade.gov/ia under the heading ``Federal Register Notices.'' The 
paper copy and the electronic version of the Decision Memorandum are 
identical in content.

Application of Facts Available, Including the Application of Adverse 
Inferences

    For purposes of this final determination, we have relied on facts 
available and have used adverse inferences to determine the 
countervailable subsidy rates for the four mandatory company 
respondents: Han Shing Chemical, Ningbo, Qilu, and SSJ/SLP, in 
accordance with sections 776(a) and (b) of the Act. In addition, we are 
also applying facts available with an adverse inference, in part, with 
respect to our determination of the countervailability of two programs: 
Government Policy Lending and Government Provision of Inputs for Less 
Than Adequate Remuneration. A full discussion of our decision to apply 
adverse facts available is presented in the Decision Memorandum in the 
sections ``Application of Facts Available and Use of Adverse 
Inferences'' and in ``Analysis of Comments'' (Comments 3, 4, 5, 13 and 
19).

Critical Circumstances

    Pursuant to section 705(a)(2) of the Act, in order to find critical 
circumstances, the Department must find that there are countervailable 
subsidies that are inconsistent with the World Trade Organization 
Agreement on Subsidies and Countervailing Measures (the Subsidies 
Agreement), and that there have been massive imports over a relatively 
short period (i.e., whether there was a surge in imports). For purposes 
of this final determination, we are making an affirmative determination 
of critical circumstances with respect to all four mandatory 
respondents (Han Shing Chemical, Ningbo, Qilu, and SSJ/SLP). For the 
voluntary respondent, Aifudi, we are making a negative final 
determination of critical circumstances because we verified that it has 
not received any subsidies that are inconsistent with the Subsidies 
Agreement. For ``all others,'' we have made a negative determination of 
critical circumstances in accordance with section 705(a)(2) of the Act. 
For a complete discussion of our critical circumstances determination, 
see the ``Critical Circumstances'' section in the Decision Memorandum.

Final Determination

    In accordance with section 705(c)(1)(B)(i) of the Act, we determine 
the total countervailable subsidy rates to be:

------------------------------------------------------------------------
                                                             Net Subsidy
                     Producer/Exporter                           Rate
------------------------------------------------------------------------
Han Shing Chemical Co., Ltd. (Han Shing Chemical)..........  223.74[perc
                                                                     nt]
Ningbo Yong Feng packaging Co., Ltd. (Ningbo)..............  223.74[perc
                                                                     nt]
Shandong Qilu Plastic Fabric Group, Ltd. (Qilu)............  304.40[perc
                                                                     nt]
Shandong Shouguang Jianyuan Chun Co., Ltd. (SSJ) / Shandong  352.82[perc
 Longxing Plastic Products Company Ltd. (SLP)..............          nt]
Zibo Aifudi Plastic Packaging Co., Ltd. (Aifudi)...........  29.54[percn
                                                                      t]
All Others.................................................  226.85[perc
                                                                     nt]
------------------------------------------------------------------------

    In accordance with section 705(c)(5)(A)(ii) of the Act, we have 
determined that the most reasonable method for determining the all 
others rate is a simple average of the four mandatory respondents' AFA 
rates and the calculated rate for Aifudi. See Decision Memorandum at 
Comment 21 for a more detailed discussion of the all others rate 
determination.
    Suspension of Liquidation
    Because we preliminarily determined that critical circumstances 
existed for entries of LWS produced/exported by Han Shing Chemical and 
Ningbo, we instructed U.S. Customs and Border Protection (CBP), in 
accordance with sections 703(d)(1)(B) and (2) and 703(e)(2)(A) of the 
Act, to suspend liquidation of entries of LWS produced/exported by Han 
Shing Chemical and Ningbo which were entered, or withdrawn from 
warehouse, for consumption on or after December 3, 2007, and to apply 
the suspension of liquidation to any unliquidated entries entered, or 
withdrawn from warehouse, for consumption on or after September 4, 2007 
(90 days before the date of publication of the Preliminary 
Determination). For all other producers/exporters, we ordered CBP to 
suspend liquidation for all entries entered, or withdrawn from 
warehouse, on or after December 3, 2007.
    In accordance with section 703(d) of the Act, we instructed CBP to 
discontinue the suspension of liquidation for countervailing duty 
purposes for subject merchandise entered on or after April 1, 2008, but 
to continue the suspension of liquidation of entries made from Han 
Shing Chemical and Ningbo from September 4, 2007 through April 1, 2008 
and, for all other entries, to continue the suspension of liquidation 
from December 3, 2007 through April 1, 2008. Now that the Department 
has reached a final affirmative determination of critical circumstances 
for Qilu and SSJ/SLP, pursuant to section 705(c)(4)(B) of the Act, we 
will instruct CBP to apply the previously ordered suspension of 
liquidation for Qilu and SSJ/SLP retroactively to any unliquidated 
entries entered, or withdrawn from warehouse, for consumption on or 
after September 4, 2007 (90 days before the date of publication of the 
Preliminary Determination) and on or before April 1, 2008.
    If the ITC issues a final affirmative determination of injury, we 
will issue a countervailing duty order, reinstate suspension of 
liquidation under section 706(a) of the Act for all entries, and 
require a cash deposit of estimated countervailing duties for such 
entries of merchandise at the rates indicated above. If the ITC 
determines that material injury, threat of material injury to, or 
material retardation of, the domestic industry 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.

[[Page 35642]]

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 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 APO of their responsibility concerning the destruction of 
proprietary information disclosed under APO in accordance with section 
351.305(a)(3) of the Department's regulations. Failure to comply is a 
violation of the APO.
    This determination is issued and published pursuant to sections 
705(d) and 777(i) of the Act.

    Dated: June 16, 2008.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.

Appendix I: Decision Memorandum

I. Summary

II. Background

III. Application of Facts Available and Use of Adverse Inferences

    A. Application of Facts Available, Including the Application of 
Adverse Inferences
    B. Selection of the Adverse Facts Available

IV. Critical Circumstances

V. Subsidies Valuation Information

    A. Attribution of Subsidies and Cross-Ownership
    B. Loan Benchmarks and Discount Rate

VI. Analysis of Programs

    A. Programs Determined to Be Countervailable
    B. Program Determined to Be Not Countervailable
    C. Programs Determined to Be Not Used by Aifudi
    D. Programs Determined to Be Terminated

VII. Analysis of Comments

Comment 1: Application of the Countervailing Duty Law to Non-Market 
Economy Countries
Comment 2: Whether the Department Can Measure Subsidies that have been 
Alleged to Occur Prior to the Department's Determination to Apply CVD 
Law to China
Comment 3: Whether the Department Should Apply Adverse Facts Available 
to All Mandatory Respondents
Comment 4: Whether the Department Can Find that a Program Has Been Used 
and Is Countervailable for Non-Cooperating Respondents
Comment 5: Whether the Calculated Rates for Aifudi Should be Applied as 
Adverse Facts Available to the Mandatory Respondents
Comment 6: Whether the Department Should Apply Partial Adverse Facts 
Available to Aifudi
Comment 7: Whether the Provision of Electricity for Less Than Adequate 
Remuneration Is Countervailable
Comment 8: Whether the GOC Provision of Land Can Be Countervailed
Comment 9: Whether the GOC's Sale of Land-Use Rights is Specific
Comment 10: Whether the Department Should Select Either a First-Tier or 
Third-Tier Benchmark for the Provision of Land-Use Rights for Less Than 
Adequate Remuneration
Comment 11: Whether the Department Can Lawfully Apply an External 
Benchmark for the Provision of Land-Use Rights for Less than Adequate 
Remuneration
Comment 12: Whether the Provision of Petrochemical Inputs for Less Than 
Adequate Remuneration by SOEs is Countervailable
Comment 13: Whether SOEs Distort the Market in the PRC
Comment 14: Alternative Benchmark for the Provision of Petrochemical 
Inputs for Less Than Adequate Remuneration
Comment 15: Whether the Department Can Use Data from the World Trade 
Atlas to Determine a Benchmark for Petrochemical Inputs
Comment 16: Whether the Sale of Petrochemical Inputs is Consistent with 
Market Principles
Comment 17: Whether the Department Should Make an Adjustment for 
Freight in the Benchmark for Petrochemical Inputs
Comment 18: Whether the GOC Provides Government Policy Lending to the 
LWS Industry
Comment 19: Whether the Department May Countervail the Policy Lending 
Program as Adverse Facts Available
Comment 20: The Appropriate Benchmark to Use for the Policy Lending 
Program
Comment 21: The Determination of the All Others Rate

VIII. Recommendation

[FR Doc. E8-14256 Filed 6-23-08; 8:45 am]
BILLING CODE 3510-DS-S