[Federal Register Volume 73, Number 131 (Tuesday, July 8, 2008)]
[Notices]
[Pages 38981-38984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-15479]


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DEPARTMENT OF COMMERCE

International Trade Administration

C-570-926


Sodium Nitrite From the People's Republic of China: Final 
Affirmative Countervailing Duty Determination

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 sodium nitrite from the People's Republic of 
China (PRC). On April 11, 2008, we issued the Preliminary 
Determination, see Sodium Nitrite From the People's Republic of China: 
Preliminary Affirmative Countervailing Duty Determination, 73 FR 19816 
(April 11, 2008) (Preliminary Determination). Because neither the 
Government of the People's Republic of China (GOC) nor the two 
mandatory company respondents participated in this investigation, the 
Department relied on facts available and applied adverse inferences in 
reaching the Preliminary Determination. The Department assigned a 
countervailable subsidy rate to each program under investigation using 
rates calculated in Coated Free Sheet Paper from the People's Republic 
of China: Final Affirmative Countervailing Duty Determination, 72 FR 
60645 (October 25, 2007) and accompanying Issues and Decision 
Memorandum (CFS from the PRC). We invited interested parties to comment 
on the Preliminary Determination. No interested party submitted 
comments regarding the Preliminary Determination.
    Since the publication of the Preliminary Determination, the 
Department has reached affirmative final countervailing duty 
determinations in several investigations of products from the PRC. We 
have used the rates calculated in these intervening final 
determinations to revise the countervailable subsidy rates for certain 
programs. For information on the countervailable subsidy rates, see the 
``Final Determination'' section of this notice.

EFFECTIVE DATE: July 8, 2008.

FOR FURTHER INFORMATION CONTACT: 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-
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 April 11, 2008. On 
April 14, 2008, petitioner (General Chemical LLC) submitted a letter, 
in accordance with section 705(a)(1) of the Tariff Act of 1930, as 
amended (the Act), requesting alignment of the final countervailing 
duty determination with the final determination in the companion 
antidumping duty investigation of sodium nitrite from the PRC. On April 
28, 2008, the Department aligned the final countervailing duty 
determination with the final determination in the companion antidumping 
duty investigation of sodium nitrite from the PRC. See Sodium Nitrite 
from the People's Republic of China: Alignment of Final Countervailing 
Duty Determination with Final Antidumping Duty Determination, 73 FR 
22920 (April 28, 2008).

Period of Investigation

    The period of investigation (POI) for which we are measuring 
subsidies is calendar year 2006. See 19 CFR 351.204(b)(2).

Scope of the 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.

[[Page 38982]]

Injury Test

    Because the PRC is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, the International Trade 
Commission (ITC) is required to determine pursuant to section 701(a)(2) 
of the Act whether imports of the subject merchandise from the PRC 
materially injure, or threaten material injury to, a United States 
industry. On January 14, 2008, 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 allegedly 
subsidized imports from the PRC of subject merchandise. See Sodium 
Nitrite from China and Germany: Investigation Nos. 701-TA-453 and 731-
TA-1136-1137 (Preliminary), 73 FR 2278, (January 14, 2008).

Application of Facts Available and Use of Adverse Inferences

    Section 776 of the Act, governs the use of facts available and 
adverse facts available. Section 776(a) provides that if an interested 
party or any other person (1) withholds information that has been 
requested by the Department; (2) fails to provide such information by 
deadlines or in the form and manner requested; (3) significantly 
impedes a proceeding; or (4) provides such information but the 
information cannot be verified, the Department shall use the facts 
otherwise available in reaching its determination. The statute requires 
that certain conditions be met before the Department may resort to 
facts available. Where the Department determines that a response to a 
request for information does not comply with the request, section 
782(d) of the Act provides that the Department will so inform the party 
submitting the response and will, to the extent practicable, provide 
that party an opportunity to remedy or to explain the deficiency.
    If the party fails to remedy the deficiency within the applicable 
timelines, the Department may, subject to section 782(e) of the Act, 
disregard all or part of the original and subsequent responses, as 
appropriate. Section 782(e) of the Act states that the Department shall 
not decline to consider information deemed ``deficient'' under section 
782(d) of the Act if: (1) the information is submitted by the 
established deadline; (2) the information can be verified; (3) the 
information is not so incomplete that it cannot serve as a reliable 
basis for reaching the applicable determination; (4) the interested 
party has demonstrated that it acted to the best of its ability; and 
(5) the information can be used without undue difficulties.
    Section 776(b) of the Act provides that the Department may use an 
inference adverse to the interests of a party that has failed to 
cooperate by not acting to the best of its ability to comply with the 
Department's requests for information. See Statement of Administrative 
Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 
103-316, Vol. 1, 889-90 (1994) (SAA) at 870.
    In the Preliminary Determination, the Department based the CVD 
rates for the two mandatory company respondents, Shanxi Jiaocheng 
Hongxing Chemical Co., Ltd. (Shanxi Jiaocheng) and Tianjin Soda Plant, 
together with its subsidiary company, Tianjin Port Free Trade Zone Pan 
Bohai International Trading Co., Ltd. (Tianjin Soda Plant) on facts 
otherwise available, pursuant to section 776(a)(2)(C) of the Act 
because they did not respond to the Department's countervailing duty 
questionnaire. Furthermore, in selecting from the facts available, the 
Department determined that an adverse inference was warranted, pursuant 
to section 776(b) of the Act because Shanxi Jiaocheng and Tianjin Soda 
Plant did not respond to the Department's questionnaire and therefore 
did not cooperate to the best of their abilities in the investigation. 
Preliminary Determination at 19817-18.
    Neither the GOC nor Shanxi Jiaocheng or Tianjin Soda Plant have 
provided any information or argument that would warrant a 
reconsideration of the Department's Preliminary Determination that the 
reliance on facts available and the application of adverse inferences 
is warranted. Therefore, for purposes of this final determination we 
are relying on facts available and applying adverse inferences in 
accordance with section 776(b) of the Act.

Selection of the Adverse Facts Available Rate

    In deciding which facts to use as adverse facts available, section 
776(b) of the Act and 19 CFR 351.308(c)(1) authorize the Department to 
rely on information derived from (1) the petition, (2) a final 
determination in the investigation, (3) any previous review or 
determination, or (4) any other information placed on the record. The 
Department has no information on the record of this proceeding from 
which to select appropriate AFA rates for any of the subject programs, 
and because this is an investigation, we have no previous segments of 
the proceeding from which to draw potential AFA rates. In such cases, 
it is the Department's practice to select, as adverse facts available, 
the highest calculated rate in any segment of the proceeding. See, 
e.g., Certain In-shell Roasted Pistachios from the Islamic Republic of 
Iran: Final Results of Countervailing Duty Administrative Review 
(Pistachios from Iran), 71 FR 66165 (November 13, 2006) and 
accompanying Issues and Decision Memorandum at Comment 1. The 
Department's practice when selecting an adverse rate from among the 
possible sources of information is to ensure that the margin is 
sufficiently adverse ``as to effectuate the statutory purposes of the 
adverse facts available rule to induce respondents to provide the 
Department with complete and accurate information in a timely manner.'' 
See Notice of Final Determination of Sales at Less than Fair Value: 
Static Random Access Memory Semiconductors from Taiwan, 63 FR 8909, 
8932 (February 23, 1998). The Department's practice also ensures ``that 
the party does not obtain a more favorable result by failing to 
cooperate than if it had cooperated fully.'' See SAA at 870. In 
choosing the appropriate balance between providing a respondent with an 
incentive to respond accurately and imposing a rate that is reasonably 
related to the respondent's prior commercial activity, selecting the 
highest prior rate ``reflects a common sense inference that the highest 
prior margin is the most probative evidence of current margins, 
because, if it were not so, the importer, knowing of the rule, would 
have produced current information showing the margin to be less.'' See 
Rhone Poulenc, Inc. v. United States, 899 F. 2d 1185, 1190 (Fed. Cir. 
1990).
    As stated in the Preliminary Determination, the Department 
determined that Shanxi Jiaocheng and Tianjin Soda Plant each failed to 
act to the best of its ability in this investigation; thus, for each 
program examined, the Department made the adverse inference that each 
company benefitted from the program, consistent with our practice. See, 
e.g., Certain Cold-Rolled Carbon Steel Flat Products from the Republic 
of Korea; Final Affirmative Countervailing Duty Determination, 67 FR 
62102 (October 3, 2002). In addition, we stated in the Preliminary 
Determination that our practice is to rely upon the highest calculated 
program rate for the same program or for a similar type of program.\1\ 
See e.g., Circular Welded

[[Page 38983]]

Carbon Quality Steel Pipe from the People's Republic of China: Final 
Affirmative Countervailing Duty Determination and Final Affirmative 
Determination of Critical Circumstances, 73 FR 31966 (June 5, 2008) and 
accompanying Issues and Decision Memorandum at 2 (CWP from the PRC); 
CFS from the PRC at Comment 24; Laminated Woven Sacks from the People's 
Republic of China: Final Affirmative Countervailing Duty Determination 
and Final Affirmative Determination, in Part, of Critical 
Circumstances, 73 FR 35639 (June 24, 2008) and accompanying Issues and 
Decision Memorandum at 6-8 (LWS from the PRC); see also Light-Walled 
Rectangular Pipe and Tube From People's Republic of China: Final 
Affirmative Countervailing Duty Investigation Determination, 73 FR 
35642 (June 24, 2008) and accompanying Issues and Decision Memorandum 
at 2 (LWRP from the PRC). We have selected the adverse facts available 
rate to apply to each program, for purposes of this final 
determination, consistent with this practice.
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    \1\ The Department's first preference is to use the highest 
calculated rate for the same program (i.e. identical program). If 
there is no identical program, then the Department will use the 
highest calculated rate for a similar program (e.g. tax program to 
tax program, loan program to loan program).
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    Information from the petition indicates that during the POI, the 
standard income tax for corporations in China was 30 percent and there 
is an additional local income tax at the rate of three percent. See the 
November 8, 2007 letter to the Secretary of Commerce, at Exhibit IV-12. 
To determine the program rate for the 16 alleged income tax programs 
under which companies receive either a reduction or exemption of income 
tax, we have applied an adverse inference that Shanxi Jiaocheng and 
Tianjin Soda Plant paid no income taxes during the POI. Therefore, the 
highest possible combined countervailable subsidy for the 16 national, 
provincial, and local income tax programs subject to this investigation 
total 33 percent. Thus, we are applying a countervailable rate of 33 
percent on an overall basis for the 16 income tax programs (i.e., the 
16 income tax programs combined provided a countervailable subsidy of 
33 percent). This 33 percent AFA rate does not apply to income tax 
credit or income tax refund programs.
    For the remaining programs subject to this investigation (including 
income tax credit and income tax refund programs), we are applying, 
where applicable, the highest countervailable subsidy rate that was 
calculated in a prior final countervailing duty determination for a 
product from the PRC for the same or similar type of program (i.e., 
subsidy programs regarding tax refunds or credits, value-added tax 
(VAT), and government-provided grants and loans). See CFS from the PRC 
at Comment 24 and LWS from the PRC at 6-8. Absent a subsidy rate for 
the same or similar type of program, we are applying the highest 
countervailable subsidy rate for any program otherwise listed in any 
prior final countervailing duty determination involving the PRC.\2\ See 
id.
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    \2\ In applying the highest calculated countervailable subsidy 
rate for any program otherwise listed, we are disregarding the 
calculated rates for the programs ``Hot-Rolled Steel For Less Than 
Adequate Remuneration'' (CWP from the PRC), and ``Government 
Provision of Inputs for Less Than Adequate Remuneration'' (LWS from 
the PR C), because the industry under investigation in this 
proceeding cannot use the products for which these rates were 
calculated.  See Sodium Nitrite From the Federal Republic of Germany 
And The People's Republic of China: Petition For The Imposition of 
Antidumping And Countervailing Duties, (November 8, 2007) Volume I 
at 32-33. See also Sodium Nitrite from China and Germany: 
Investigation Nos. 701-TA-453 and 731-TA-1136-1137 (Preliminary), 
ITC Publication 3979, January 2008 at 8. The Department's decision 
to not use, as AFA, these program rates is based on the particular 
facts of this investigation and this particular set of facts may not 
be applicable or identifiable in another proceeding.
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    For a discussion of the application of the AFA rates for each 
program determined to be countervailable, see Memorandum to the File, 
Sodium Nitrite from the PRC; Calculation of Countervailable Subsidy 
Rates for the Final Determination, dated concurrently with this notice 
(Sodium Nitrite Calculation Memorandum). Attached to this memorandum 
are copies of CFS from the PRC, LWS from the PRC, CWP from the PRC, and 
LWRP from the PRC, which contain the public information concerning 
subsidy programs, including the subsidy rates, upon which we are 
relying as adverse facts available. See Sodium Nitrite Calculation 
Memorandum.
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation or review, it shall, to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at its disposal. To corroborate secondary information, 
the Department will, to the extent practicable, examine the reliability 
and relevance of the information to be used. The SAA emphasizes, 
however, that the Department need not prove that the selected facts 
available are the best alternative information. See SAA at 869.
    With regard to the reliability aspect of corroboration, we note 
that these rates were calculated in prior final countervailing duty 
determinations. No information has been presented that calls into 
question the reliability of these calculated rates that we are applying 
as AFA. Unlike other types of information, such as publicly available 
data on the national inflation rate of a given country or national 
average interest rates, there typically are no independent sources for 
data on company-specific benefits resulting from countervailable 
subsidy programs.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal in 
considering the relevance of information used to calculate a 
countervailable subsidy benefit. Where circumstances indicate that the 
information is not appropriate as adverse facts available, the 
Department will not use it. See, e.g., Fresh Cut Flowers from Mexico; 
Final Results of Antidumping Duty Administrative Review, 61 FR 6812 
(February 22, 1996). In the absence of record evidence concerning these 
programs due to respondents' decision not to participate in the 
investigation, the Department has reviewed the information concerning 
China subsidy programs in this and other cases. For those programs for 
which the Department has found a program-type match, we find that 
programs of the same type are relevant to the programs of this case. 
For the programs for which there is no program-type match, the 
Department has selected the highest calculated subsidy for any China 
program from which the respondents could conceivably receive a benefit 
to use as AFA. The rate is therefore relevant to the respondents in 
that it is an actual calculated CVD rate for a China program from which 
the respondents could receive a benefit. No evidence had been presented 
or obtained which contradicts the reliability or relevance of the 
secondary information which was information from a prior China CVD 
investigation. See Preliminary Determination at 19819. Due to the lack 
of participation by the respondents and the resulting lack of record 
information concerning these programs, the Department has corroborated 
the rates it selected to the extent practicable.

Final Determination

    In accordance with section 705(c)(1)(B)(i) of the Act, we have 
assigned a subsidy rate to each of the two producers/exporters of the 
subject merchandise that were selected as mandatory respondent 
companies in this CVD investigation. We determine

[[Page 38984]]

the total net countervailable subsidy rates to be:

------------------------------------------------------------------------
             Producer/Exporter                      Subsidy Rate
------------------------------------------------------------------------
Shanxi Jiaocheng Hongxing Chemical Co.,                          169.01%
 Ltd. (Shanxi Jiaocheng)..................
Tianjin Soda Plant Tianjin Port Free Trade                       169.01%
 Zone Pan Bohai International Trading Co.,
 Ltd. (Tianjin Soda Plant)................
All Others................................                       169.01%
------------------------------------------------------------------------

    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 producers individually investigated are 
determined entirely in accordance with 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, the rate established for the two mandatory respondents 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 AFA rate assigned for Shanxi 
Jiaocheng and Tianjin Soda Plant as the all others rate. This method is 
consistent with the Department's past practice. See e.g. Final 
Affirmative Countervailing Duty Determination: Certain Hot-Rolled 
Carbon Steel Flat Products From Argentina, 66 FR 37007, 37008 (July 16, 
2001); see also Final Affirmative Countervailing Duty Determination: 
Prestressed Steel Wire Strand From India, 68 FR 68356, 68357 (December 
8, 2003).

Suspension of Liquidation and Cash Deposit Requirements

    In accordance with sections 705(c)(1)(B) of the Act, we directed 
U.S. Customs and Border Protection (CBP) to suspend liquidation of all 
entries of the subject merchandise from the PRC, which are entered or 
withdrawn from warehouse, for consumption on or after April 11, 2008, 
the date of publication of the Preliminary Determination. In accordance 
with sections 705(c)(1)(B) of the Act, we will instruct CBP to require 
cash deposits at the rates shown above on all entries of the subject 
merchandise from the PRC, entered or withdrawn from warehouse, for 
consumption on or after the date of publication of this final 
determination.
    If the ITC issues a final affirmative injury determination, we will 
issue a countervailing duty order under section 706(a) of the Act. If 
the ITC determines that material injury to, 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.

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 30, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-15479 Filed 7-7-08; 8:45 am]
BILLING CODE 3510-DS-S