[Federal Register Volume 74, Number 204 (Friday, October 23, 2009)]
[Notices]
[Pages 54778-54781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-25571]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-963]


Certain Sodium and Potassium Phosphate Salts From the People's 
Republic of China: Initiation of Countervailing Duty Investigation

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

DATES: Effective Date: October 23, 2009.

FOR FURTHER INFORMATION CONTACT: Yasmin Nair or Joseph Shuler, AD/CVD 
Operations, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-3813 and (202) 482-1293, 
respectively.

SUPPLEMENTARY INFORMATION: 

The Petition

    On September 24, 2009, the Department of Commerce (``Department'') 
received a petition filed in proper form by ICL Performance Products LP 
and Prayon, Inc. (collectively, ``Petitioners''), domestic producers of 
certain sodium and potassium phosphate salts.\1\ In response to the 
Department's requests, Petitioners provided timely information 
supplementing the Petition on October 1, 2009.
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    \1\ See Petition for the Imposition of Antidumping and 
Countervailing Duties Pursuant to Sections 701 and 731 of the Tariff 
Act of 1930, as Amended: Certain Sodium and Potassium Phosphate 
Salts from the People's Republic of China, dated September 24, 2009 
(``Petition'').
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    In accordance with section 702(b)(1) of the Tariff Act of 1930, as 
amended (``the Act''), Petitioners allege that manufacturers, 
producers, or exporters of sodium and potassium phosphate salts in the 
People's Republic of China (``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 Petitioners filed the Petition on behalf 
of the domestic industry because they are interested parties as defined 
in section 771(9)(C) and (D) of the Act, and Petitioners have 
demonstrated sufficient industry support with respect to the 
countervailing duty (``CVD'') investigation (see ``Determination of 
Industry Support for the Petition'' section below).

[[Page 54779]]

Period of Investigation

    The period of investigation is January 1, 2008, through December 
31, 2008.

Scope of Investigation

    The phosphate salts covered by this investigation include Sodium 
Tripolyphosphate (``STPP''), whether anhydrous or in solution, 
anhydrous Monopotassium Phosphate (``MKP''), anhydrous Dipotassium 
Phosphate (``DKP'') and Tetrapotassium Pyrophosphate (``TKPP''), 
whether anhydrous or in solution (collectively ``phosphate salts'').
    STPP, also known as Sodium triphosphate, Tripoly or Pentasodium 
triposphate, is a sodium polyphosphate with the formula 
Na5O10P3. The American Chemical 
Society, Chemical Abstract Service (``CAS'') registry number for STPP 
is 7758-29-4. STPP is typically 25% phosphorus, 31% sodium and and 57% 
diphosphorus pentoxide (P2O5). STPP is classified 
under heading 2835.31.0000, HTSUS.
    TKPP, also known as normal potassium pyrophosphate, Diphosphoric 
acid or Tetrapotassium salt, is a potassium salt with the formula 
K4P2O7. The CAS registry number for 
TKPP is 7320-34-5. TKPP is typically 18.7% phosphorus and 47.3% 
potassium. It is generally greater than or equal to 43.0% 
P2O5 content. TKPP is classified under heading 
2835.39.1000, HTSUS.
    MKP, also known as Potassium dihydrogen phosphate, KDP, or 
Monobasic potassium phosphate, is a potassium salt with the formula 
KH2PO4. The CAS registry number for MKP is 7778-
77-0. MKP is typically 22.7% phosphorus, 28.7% potassium and 52% 
P2O5. MKP is classified under heading 
2835.24.0000, HTSUS.
    DKP, also known as Dipotassium salt, Dipotassium hydrogen 
orthophosphate or Potassium phosphate, dibasic, has a chemical formula 
of K2HPO4. The CAS registry number for DKP is 
7758-11-4. DKP is typically 17.8% phosphorus, 44.8% potassium and 40% 
P2O5 content. DKP is classified under heading 
2835.24.0000, HTSUS.
    The products covered by this investigation include the foregoing 
phosphate salts in all grades, whether food grade or technical grade. 
The product covered by this investigation includes anhydrous MKP and 
DKP without regard to the physical form, whether crushed, granule, 
powder or fines. Also covered are all forms of STPP and TKPP, whether 
crushed, granule, powder, fines or solution.
    For purposes of the investigation, the narrative description is 
dispositive, not the tariff heading, American Chemical Society, CAS 
registry number or CAS name, or the specific percentage chemical 
composition identified above.

Comments on Scope of Investigation

    During our review of the Petition, we discussed the scope with 
Petitioners 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 Department's 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 by November 3, 2009, twenty 
calendar days from the signature date of this notice. Comments should 
be addressed to Import Administration's APO/Dockets Unit, 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, on September 25, 
2009, the Department invited representatives of the Government of the 
PRC for consultations with respect to the CVD petition. The Government 
of the PRC did not request such consultations. On October 13, 2009, the 
GOC requested that the Department extend the deadline for 
consultations. The Department responded that it could not extend this 
deadline for pre-initiation consultations, but would consult with the 
GOC in the course of this proceeding if initiated, as required by 
Article 13.2 of the Subsidies and Countervailing Measures Agreement.

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 U.S. 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 subtitle.'' Although the reference point from which the 
domestic like product analysis begins is usually ``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), Petitioners submit that there is one class or kind of 
merchandise, but four domestic like products.
    The four like products, when considered together, correspond to the 
product scope description. Based on our analysis of the information 
submitted on the record, we have determined that STPP, MKP, DKP, and 
TKPP constitute four domestic like products and we have analyzed 
industry support in terms

[[Page 54780]]

of those domestic like products. For a discussion of the domestic like 
product analysis in this case, see ``Countervailing Duty Investigation 
Initiation Checklist: Certain Sodium and Potassium Phosphate Salts from 
the People's Republic of China (``Initiation Checklist''), at 
Attachment II, Analysis of Industry Support for the Petitions Covering 
Certain Sodium and Potassium Phosphate Salts from the People's Republic 
of China, on file in the Central Records Unit (``CRU''), Room 1117 of 
the main Department of Commerce building.
    With regard to section 702(c)(4)(A) of the Act, in determining 
whether Petitioners have standing (i.e., the domestic workers and 
producers supporting the Petition account for (1) at least 25 percent 
of the total production of the domestic like product and (2) 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), we considered the industry support data contained in the 
Petition with reference to the domestic like products. To establish 
industry support, Petitioners provided their own production volume of 
the domestic like products for calendar year 2008, and compared that to 
total production volume of the domestic like products for the industry. 
We have relied upon data Petitioners provided for purposes of measuring 
industry support. For further discussion, see Initiation Checklist at 
Attachment II.
    The Department's review of the data provided in the Petition, 
supplemental submissions, and other information readily available to 
the Department indicates that Petitioners have established industry 
support for each of the four like products. First, the Petition 
establishes support from domestic producers (or workers) accounting for 
more than 50 percent of the total production of the domestic like 
products 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 and Initiation Checklist at Attachment 
II. Second, the domestic producers (or workers) have met the statutory 
criteria for industry support under section 702(c)(4)(A)(i) of the Act 
because the domestic producers (or workers) who support the Petition 
account for at least 25 percent of the total production of the relevant 
domestic like product. See Initiation Checklist at Attachment II. 
Finally, the domestic producers (or workers) have met the statutory 
criteria for industry support under section 702(c)(4)(A)(ii) of the Act 
because the domestic producers (or workers) who support the Petition 
account for more than 50 percent of the production of the relevant 
domestic like product produced by that portion of the industry 
expressing support for, or opposition to, the 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 Initiation Checklist at Attachment II.
    The Department finds that Petitioners filed the Petition on behalf 
of the domestic industry because they are interested parties as defined 
in sections 771(9)(C) of the Act and have demonstrated sufficient 
industry support with respect to the countervailing duty investigation 
that they are requesting the Department 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

    Petitioners allege that imports of certain sodium and potassium 
phosphate salts from the PRC are benefitting from countervailable 
subsidies and that such imports are causing, or threaten to cause, 
material injury to the domestic industry producing certain sodium and 
potassium phosphate salts. In addition, Petitioners allege that 
subsidized imports exceed the negligibility threshold provided for 
under section 771(24)(A) of the Act.
    Petitioners contend that the industries' injured condition is 
illustrated by reduced market share, underselling and price depressing 
and suppressing effects, lost sales and revenue, reduced production, 
reduced capacity and capacity utilization, reduced shipments, reduced 
employment, and an overall decline in financial performance. We have 
assessed the allegations and supporting evidence regarding material 
injury, threat of 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 (Analysis of Injury Allegations 
and Evidence of Material Injury and Causation).

Initiation of Countervailing Duty Investigation

    Section 702(b) of the Act requires the Department to initiate a CVD 
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 CVD petition on sodium and 
potassium phosphate salts 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 CVD investigation 
to determine whether manufacturers, producers, or exporters of sodium 
and potassium phosphate salts 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 in the PRC:

A. Income Tax Programs

    1. ``Two Free, Three Half'' Tax Exemption for Foreign Invested 
Enterprises (``FIEs'').
    2. Income Tax Subsidies for FIEs Based on Geographic Location.
    3. Income Tax Exemption Programs For Export-Oriented FIEs.
    4. Local Income Tax Exemption or Reduction Program for 
``Productive'' FIEs.
    5. Preferential Tax Subsidies for Research and Development by FIEs.
    6. Reduced Income Tax Rate for High- and New-Technology 
Enterprises.
    7. Income Tax Credit on Purchases of Domestically Produced 
Equipment.
    8. Reduction in or Exemption from the Fixed Assets Investment 
Orientation Regulatory Tax.

B. Grant Programs

    1. Subsidies to Loss-Making State-Owned Enterprises (``SOEs'') by 
the Government of China (``GOC'') at the National Level.
    2. Subsidies to Loss-Making SOEs by the GOC at the Provincial 
Level.
    3. Grants Pursuant to the State Key Technology Renovation Project 
Fund.
    4. Grants Pursuant to the ``Famous Brands'' Program.

[[Page 54781]]

C. Tariff and Indirect Tax Exemption Programs

    1. Value Added Tax (``VAT'') Refunds for FIEs Purchasing 
Domestically Produced Equipment.

D. VAT and Tariff Exemptions on Imported Equipment

E. Preferential Lending Policies

    1. Discounted Loans for Export Oriented Industries (``Honorable 
Enterprises'').

F. Government Restraints on Exports of Yellow Phosphorus

For further information explaining why the Department is investigating 
these programs, see Initiation Checklist.
    We are not including in our investigation the following program 
alleged to benefit producers and exporters of the subject merchandise 
in the PRC:

Provision of Electricity for Less Than Adequate Remuneration

    Petitioners allege that the GOC, through the National Development 
and Reform Commission, regulates the power rates for certain 
industries, including the yellow phosphorus industry and that 
differential rates are provided to the yellow phosphorus industry. 
Petitioners have not provided information that supports the allegation 
that differential pricing of electricity is provided to producers of 
the subject merchandise. Consequently, we do not plan on investigating 
this program.

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 period of investigation. We intend to 
release the CBP data under the Administrative Protective Order 
(``APO'') to all parties with access to information protected by APO 
within five days of the announcement of the initiation of this 
investigation. Interested parties may submit comments regarding the CBP 
data and respondent selection within seven calendar days of publication 
of this notice. We intend to make our decision regarding respondent 
selection within 20 days of publication of this Federal Register 
notice.
    Interested parties must submit applications for disclosure under 
APO in accordance with 19 CFR 351.305(b). Instructions for filing such 
applications may be found on the Department's Web site at http://ia.ita.doc.gov/apo.

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 section 351.203(c)(2) 
of the Department's regulations.

ITC Notification

    We have notified the ITC of our initiation, as required by section 
702(d) of the Act and 19 CFR 351.203(c)(1).

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 sodium and potassium 
phosphate salts 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 and 19 CFR 351.203(c)(1).

    Dated: October 14, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.

Attachment I

Scope of the Investigation

    The phosphate salts covered by this investigation include Sodium 
Tripolyphosphate (STPP), whether anhydrous or in solution, anhydrous 
Monopotassium Phosphate (MKP), anhydrous Dipotassium Phosphate (DKP) 
and Tetrapotassium Pyrophosphate (TKPP), whether anhydrous or in 
solution (collectively ``phosphate salts'').
    STPP, also known as Sodium triphosphate, Tripoly or Pentasodium 
triposphate, is a sodium polyphosphate with the formula 
Na5O10P3. The American Chemical 
Society, Chemical Abstract Service (``CAS'') registry number for STPP 
is 7758-29-4. STPP is typically 25% phosphorus, 31% sodium and and 57% 
diphosphorus pentoxide (P2O5). STPP is classified 
under heading 2835.31.0000, HTSUS.
    TKPP, also known as normal potassium pyrophosphate, Diphosphoric 
acid or Tetrapotassium salt, is a potassium salt with the formula 
K4P2O7. The CAS registry number for 
TKPP is 7320-34-5. TKPP is typically 18.7% phosphorus and 47.3% 
potassium. It is generally greater than or equal to 43.0% 
P2O5 content. TKPP is classified under heading 
2835.39.1000, HTSUS.
    MKP, also known as Potassium dihydrogen phosphate, KDP, or 
Monobasic potassium phosphate, is a potassium salt with the formula 
KH2PO4. The CAS registry number for MKP is 7778-
77-0. MKP is typically 22.7% phosphorus, 28.7% potassium and 52% 
P2O5. MKP is classified under heading 
2835.24.0000, HTSUS.
    DKP, also known as Dipotassium salt, Dipotassium hydrogen 
orthophosphate or Potassium phosphate, dibasic, has a chemical formula 
of K2HPO4. The CAS registry number for DKP is 
7758-11-4. DKP is typically 17.8% phosphorus, 44.8% potassium and 40% 
P2O5 content. DKP is classified under heading 
2835.24.0000, HTSUS.
    The products covered by this investigation include the foregoing 
phosphate salts in all grades, whether food grade or technical grade. 
The product covered by this investigation includes anhydrous MKP and 
DKP without regard to the physical form, whether crushed, granule, 
powder or fines. Also covered are all forms of STPP and TKPP, whether 
crushed, granule, powder, fines or solution.
    For purposes of the investigation, the narrative description is 
dispositive, not the tariff heading, American Chemical Society, CAS 
registry number or CAS name, or the specific percentage chemical 
composition identified above.

[FR Doc. E9-25571 Filed 10-22-09; 8:45 am]
BILLING CODE 3510-DS-P