[Federal Register Volume 74, Number 233 (Monday, December 7, 2009)]
[Notices]
[Pages 64045-64048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-28779]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-944]


Certain Oil Country Tubular Goods From the People's Republic of 
China: Final Affirmative Countervailing Duty Determination, Final 
Negative Critical Circumstances Determination

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

SUMMARY: The Department of Commerce (the ``Department'') has determined 
that countervailable subsidies are being provided to producers and 
exporters of certain oil country tubular goods from the People's 
Republic of China (``PRC''). For information on the estimated 
countervailing duty rates, please see the ``Suspension of Liquidation'' 
section, below.

DATES: Effective Date: December 7, 2009.

FOR FURTHER INFORMATION CONTACT: David Neubacher, Shane Subler, Magd 
Zalok, Maryanne Burke, and Henry Almond, AD/CVD Operations, Office 1, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-5823, (202) 482-0189, (202) 
482-4162, (202) 482-5604, and (202) 482-0049, respectively.

[[Page 64046]]

Petitioner

    Petitioners in this investigation are Maverick Tube Corporation, 
United States Steel Corporation, TMK IPSCO, V&M Star LP, Wheatland Tube 
Corporation, Evraz Rocky Mountain Steel, and United Steel, Paper and 
Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service 
Workers International Union, AFL-CIO-CLC (``United Steelworkers'') 
(collectively, ``Petitioners'').

Period of Investigation

    The period for which we are measuring subsidies, or period of 
investigation, is January 1, 2008, through December 31, 2008.

Case History

    The following events have occurred since the announcement of the 
preliminary determination published in the Federal Register on 
September 15, 2009. See Certain Oil Country Tubular Goods From the 
People's Republic of China: Preliminary Affirmative Countervailing Duty 
Determination, Preliminary Negative Critical Circumstances 
Determination, 74 FR 47210 (September 15, 2009) (``Preliminary 
Determination'').
    On September 16, 2009, the Department issued a letter to Jiangsu 
Changbao Steel Tube Co., Ltd. (``Changbao Steel''), Tianjin Pipe 
(Group) Co. (``TPCO''), Wuxi Seamless Oil Pipe Co., Ltd. (``WSP''), 
Zhejiang Jianli Enterprise Co., Ltd. (``Jianli''), and the Government 
of China (``GOC'') setting September 21, 2009 as the deadline for 
responses to questions in the June 4, 2009 original questionnaire and 
subsequent supplemental questionnaires. We received submissions from 
the above-mentioned mandatory respondents and the GOC on September 21, 
2009. The Department also issued supplemental questionnaires to TPCO on 
September 23, 2009. We received a response from TPCO on September 29, 
2009.
    On September 28, 2009, Changbao Steel submitted ministerial error 
allegations in regard to the Preliminary Determination. On October 21, 
2009, we issued our finding that none of the ministerial errors alleged 
by the parties constituted a significant ministerial error, as defined 
by 19 CFR 351.224(f) and 19 CFR 351.224(g) to 19 CFR 351, and did not 
amend the Preliminary Determination.
    On September 18, 2009, the Department determined that petitioners 
had provided sufficient support to investigate certain new subsidy 
allegations, dated July 30, 2009. See Memorandum to Susan H. Kuhbach, 
Office Director, AD/CVD Operations, Office 1, entitled ``New Subsidy 
Allegations'' (September 18, 2009). On October 21, 2009, the Department 
postponed its investigation of those newly alleged subsidies until the 
first administrative review (should this investigation result in a 
countervailing duty order). See Memorandum to Susan H. Kuhbach, Office 
Director, AD/CVD Operations, Office 1, entitled ``Status of New 
Subsidies'' (October 21, 2009).
    From October 12, 2009 to October 16, 2009, we conducted 
verification of the questionnaire responses submitted by GOC, Changbao 
Steel, TPCO, WSP, and Jianli. See Memorandum from Shane Subler and 
David Neubacher, International Trade Compliance Analysts, to Susan H. 
Kuhbach, Office Director, AD/CVD Operations, Office 1, entitled 
``Verification Report of the Jiangsu Province State Administration of 
Industry and Commerce and Tianjin Municipality State Administration of 
Industry and Commerce'' (October 29, 2009); Memorandum from David 
Neubacher, Magd Zalok, and Maryanne Burke, International Trade 
Compliance Analysts, to Susan H. Kuhbach, Office Director, AD/CVD 
Operations, Office 1, entitled ``Jiangsu Changbao Steel Tube Co., Ltd. 
and Jiangsu Changbao Precision Steel Tube Co., Ltd. Verification 
Report'' (October 29, 2009); Memorandum from Shane Subler and David 
Layton, International Trade Compliance Analysts, to Susan H. Kuhbach, 
Office Director, AD/CVD Operations, Office 1, entitled ``Verification 
Report: Tianjin Pipe (Group) Corporation (``TPCO Group''), Tianjin Pipe 
Iron Manufacturing Co., Ltd. (``TPCO Iron''), Tianguan Yuantong Pipe 
Product Co., Ltd. (``Yuantong''), Tianjin Pipe International Economic 
and Trading Co., Ltd. (``TPCO International''), and TPCO Charging 
Development Co., Ltd. (``Charging'') (collectively, ``TPCO'')'' 
(October 29, 2009) (``TPCO Verification Report'') ; Memorandum from 
Maryanne Burke, Magd Zalok, and David Neubacher, International Trade 
Compliance Analysts, to Susan H. Kuhbach, Office Director, AD/CVD 
Operations, Office 1, entitled ``Wuxi Seamless Oil Pipe Co., Ltd., 
Jiangsu Fanli Steel Pipe Co., Ltd., and Mengfeng Special Steel Co., 
Ltd. Verification Report'' (October 29, 2009) (``WSP Verification 
Report''); and Memorandum from Scott Holland and Henry Almond, 
International Trade Compliance Analysts, to Susan H. Kuhbach, Office 
Director, AD/CVD Operations, Office 1, entitled ``Verification Report: 
Jianli Group'' (October 28, 2009).
    We received case briefs from the GOC, Changbao, TPCO, WSP, Jianli 
and Petitioners (separately filed by Maverick Tube Corporation, United 
States Steel Corporation, and TMK IPSCO, V&M Star LP, Wheatland Tube 
Corporation, Evraz Rocky Mountain Steel, and United Steelworkers) on 
November 9, 2009. The same parties submitted rebuttal briefs on 
November 16, 2009.
    The Department placed information on the record of this 
investigation on November 12, 2009 regarding electricity rates. The GOC 
filed comments on this information on November 16, 2009 and the United 
States Steel Corporation filed rebuttal comments on November 17, 2009.
    TPCO, Maverick Tube Corporation, and United States Steel 
Corporation requested a hearing. The same parties later withdrew their 
requests. Therefore, no hearing was held.

Scope of the Investigation

    The scope of this investigation consists of OCTG, which are hollow 
steel products of circular cross-section, including oil well casing and 
tubing, of iron (other than cast iron) or steel (both carbon and 
alloy), whether seamless or welded, regardless of end finish (e.g., 
whether or not plain end, threaded, or threaded and coupled) whether or 
not conforming to American Petroleum Institute (``API'') or non-API 
specifications, whether finished (including limited service OCTG 
products) or unfinished (including green tubes and limited service OCTG 
products), whether or not thread protectors are attached. The scope of 
the investigation also covers OCTG coupling stock. Excluded from the 
scope of the investigation are: Casing or tubing containing 10.5 
percent or more by weight of chromium; drill pipe; unattached 
couplings; and unattached thread protectors.
    The merchandise subject to this investigation is currently 
classified in the Harmonized Tariff Schedule of the United States 
(``HTSUS'') under item numbers: 7304.29.10.10, 7304.29.10.20, 
7304.29.10.30, 7304.29.10.40, 7304.29.10.50, 7304.29.10.60, 
7304.29.10.80, 7304.29.20.10, 7304.29.20.20, 7304.29.20.30, 
7304.29.20.40, 7304.29.20.50, 7304.29.20.60, 7304.29.20.80, 
7304.29.31.10, 7304.29.31.20, 7304.29.31.30, 7304.29.31.40, 
7304.29.31.50, 7304.29.31.60, 7304.29.31.80, 7304.29.41.10, 
7304.29.41.20, 7304.29.41.30, 7304.29.41.40, 7304.29.41.50, 
7304.29.41.60, 7304.29.41.80,

[[Page 64047]]

7304.29.50.15, 7304.29.50.30, 7304.29.50.45, 7304.29.50.60, 
7304.29.50.75, 7304.29.61.15, 7304.29.61.30, 7304.29.61.45, 
7304.29.61.60, 7304.29.61.75, 7305.20.20.00, 7305.20.40.00, 
7305.20.60.00, 7305.20.80.00, 7306.29.10.30, 7306.29.10.90, 
7306.29.20.00, 7306.29.31.00, 7306.29.41.00, 7306.29.60.10, 
7306.29.60.50, 7306.29.81.10, and 7306.29.81.50.
    The OCTG coupling stock covered by the investigation may also enter 
under the following HTSUS item numbers: 7304.39.00.24, 7304.39.00.28, 
7304.39.00.32, 7304.39.00.36, 7304.39.00.40, 7304.39.00.44, 
7304.39.00.48, 7304.39.00.52, 7304.39.00.56, 7304.39.00.62, 
7304.39.00.68, 7304.39.00.72, 7304.39.00.76, 7304.39.00.80, 
7304.59.60.00,, 7304.59.80.15, 7304.59.80.20, 7304.59.80.25, 
7304.59.80.30, 7304.59.80.35, 7304.59.80.40, 7304.59.80.45, 
7304.59.80.50, 7304.59.80.55, 7304.59.80.60, 7304.59.80.65, 
7304.59.80.70, and 7304.59.80.80.
    The HTSUS subheadings are provided for convenience and customs 
purposes only, 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 ITC must determine whether imports of the subject 
merchandise from the PRC materially injure, or threaten material injury 
to a U.S. industry. On June 10, 2009, the U.S. International Trade 
Commission (``ITC'') issued its affirmative preliminary determination 
that there is a reasonable indication that an industry in the United 
States is materially injured by reason of allegedly subsidized imports 
of certain oil country tubular goods from the PRC. See Certain Oil 
Country Tubular Goods from China; Determinations, 74 FR 27559 (June 10, 
2009) and Certain Oil Country Tubular Goods from China: Investigation 
Nos. 701-TA-463 and 731-TA-1159 (Preliminary) (June 2009).

Critical Circumstances

    In the Preliminary Determination, the Department concluded that 
critical circumstances did not exist with respect to imports of OCTG 
from the PRC, in accordance with 703(e)(1) of the Act, because, there 
have not been massive imports of the subject merchandise over a 
relatively short period.
    We have not received any information since the Preliminary 
Determination that would lead us to change our preliminary finding. 
Therefore, in accordance with 705(a)(2) of the Act, we continue to find 
that critical circumstances do not exist with respect to imports of 
subject merchandise from the PRC.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the Memorandum from John M. 
Andersen, Acting Deputy Assistant Secretary for Antidumping and 
Countervailing Duty Operations, to Ronald K. Lorentzen, Acting 
Assistant Secretary for Import Administration, entitled ``Issues and 
Decision Memorandum for the Final Determination in the Countervailing 
Duty Investigation of Certain Oil Country Tubular Goods from the 
People's Republic of China'' (November 23, 2009) (hereafter ``Decision 
Memorandum''), which is hereby adopted by this notice. Attached to this 
notice as an Appendix is a list of the issues that parties have raised 
and to which we have responded in the Decision Memorandum. Parties can 
find a complete discussion of all issues raised in this investigation 
and the corresponding recommendations in this public memorandum, which 
is on file in the Central Records Unit, room 1117 in the main building 
of the Commerce Department. In addition, a complete version of the 
Decision Memorandum can be accessed directly on the Internet at http://ia.ita.doc.gov/frn/. The paper copy and electronic version of the 
Decision Memorandum are identical in content.

Use of Adverse Facts Available

    For purposes of this final determination, we have continued to rely 
on facts available and to draw an adverse inference, in accordance with 
sections 776(a) and (b) of the Act, to determine that the GOC's 
dominance of the market in the PRC for steel round billets results in 
significant distortion in that market. Consequently, we are not relying 
on domestic prices in the PRC in determining whether a benefit was 
conferred through the GOC's provision of steel round billets to the 
mandatory respondents. Similarly, we have continued to apply AFA to 
determine that all of the steel round billets were provided by 
government authorities.
    In a departure from the Preliminary Determination, the Department 
now finds that the use of ``facts otherwise available'' is warranted 
with regard to the GOC's provision of electricity to the mandatory 
respondents. The Department requested information regarding electricity 
in its August 11, 2009 supplemental questionnaire. This information was 
not provided in the GOC's August 26, 2009, supplemental questionnaire 
response or its September 21, 2009, response. By not responding to our 
questionnaire, the GOC has failed to act to the best of its ability. 
Accordingly, we find that an adverse inference is warranted, pursuant 
to section 776(b) of the Act. Specifically, we find that the GOC's 
provision of electricity constitutes a financial contribution within 
the meaning of section 771(5)(D) of the Act and is specific within the 
meaning of section 771(5A)(D)(iv) of the Act. We have also relied on an 
adverse inference in selecting a benchmark for determining the 
existence and amount of the benefit.
    The Department also now finds that the use of ``facts otherwise 
available'' is warranted with regard to certain loans provided to TPCO 
and WSP under the ``Policy Loans'' program. In the Department's June 4, 
2009, original questionnaire at page III-6, we requested respondents to 
``report all loans to your company from State-owned commercial banks or 
Government of the People's Republic of China (GOC) policy banks that 
were outstanding during the POI.'' The same request was again made of 
WSP, in our August 7, 2009, supplemental questionnaire. At 
verification, both companies notified the Department that certain loans 
were not reported. See WSP Verification report at 2 and TPCO 
Verification Report at 17. By failing to report these loans, these 
companies failed to act to the best of their ability. Accordingly, we 
find that an adverse inference is warranted, pursuant to section 776(b) 
of the Act in regard to these unreported loans. As adverse facts 
available, we are assigning the highest rate calculated for a loan 
subsidy program in a PRC countervailing duty proceeding to the 
unreported loans. This rate will be weight-averaged with the calculated 
rate of reported loans found countervailable under the ``Policy Loans'' 
program.
    For a full discussion of these issues, please see the Decision 
Memorandum, at ``Use of Facts Otherwise Available and Adverse Facts 
Available.''

Suspension of Liquidation

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have 
calculated individual rates for each producer/exporter of the subject 
merchandise individually investigated. Section 705(c)(5)(A)(i) of the 
Act states that for companies not investigated, we

[[Page 64048]]

will determine an ``all others'' rate equal to the weighted-average 
countervailable subsidy rates established for exporters and producers 
individually investigated, excluding any zero and de minimis 
countervailable subsidy rates, and any rates determined entirely under 
section 776 of the Act.

------------------------------------------------------------------------
                                                                   Net
                     Exporter/manufacturer                       subsidy
                                                                   rate
------------------------------------------------------------------------
Jiangsu Changbao Steel Tube Co. and Jiangsu Changbao Precision     11.98
 Steel Tube Co., Ltd.
Tianjin Pipe (Group) Co., Tianjin Pipe Iron Manufacturing Co.,     10.36
 Ltd., Tianguan Yuantong Pipe Product Co., Ltd., Tianjin Pipe
 International Economic and Trading Co., Ltd., and TPCO
 Charging Development Co., Ltd.
Wuxi Seamless Pipe Co., Ltd., Jiangsu Fanli Steel Pipe Co,         14.61
 Ltd., Tuoketuo County Mengfeng Special Steel Co., Ltd.
Zhejiang Jianli Enterprise Co., Ltd., Zhejiang Jianli Steel        15.78
 Steel Tube Co., Ltd., Zhuji Jiansheng Machinery Co., Ltd., and
 Zhejiang Jianli Industry Group Co., Ltd.
All Others.....................................................    13.20
------------------------------------------------------------------------

    As a result of our Preliminary Determination, we instructed U.S. 
Customs and Border Protection (CBP) to suspend liquidation of all 
entries of OCTG from the PRC which were entered or withdrawn from 
warehouse, for consumption on or after September 15, 2009, the date of 
the publication of the Preliminary Determination in the Federal 
Register and to collect countervailing duty deposits or bonds in the 
amount of the preliminary countervailing duty rates.
    In accordance with section 705(c)(1)(C) of the Act, we are 
directing CBP to continue to suspend liquidation of all imports of the 
subject merchandise from the PRC that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. The suspension of liquidation 
instructions will remain in effect until further notice. We are also 
directing CBP to collect countervailing duty deposits or bonds at the 
rates described above.
    We will issue a countervailing duty order if the ITC issues a final 
affirmative injury determination. If the ITC determines that material 
injury, or threat of material injury, does not exist, this proceeding 
will be terminated and all deposits 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 that it will not disclose such information, either publicly or 
under an 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 an administrative protective order (``APO'') of their 
responsibility concerning the destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely 
written notification of the return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and terms of an APO is a violation which is 
subject to sanction.
    This determination is published pursuant to sections 705(d) and 
777(i) of the Act.

    Dated: November 23, 2009.
Carole A. Showers,
Acting Deputy Assistant Secretary for Policy and Negotiations.

APPENDIX

List of Comments and Issues in the Decision Memorandum

General Issues

Comment 1 Application of CVD Law to the PRC
Comment 2 Double Counting/Overlapping Remedies
Comment 3 Cutoff Date for Identifying Subsidies

Steel Rounds for LTAR

Comment 4 Application of AFA in Preliminary Determination
Comment 5 Application of AFA Regarding PRC Market for Steel Rounds
Comment 6 Application of AFA Regarding Respondents' Steel Rounds 
Suppliers
Comment 7 Double-Bracketing of Certain Information
Comment 8 Whether Government ``Authorities'' Provided Steel Rounds 
to Respondents
Comment 9 Treatment of Companies in Which the State Has a Majority 
Interest
Comment 10 Steel Rounds Provided by Trading Companies
Comment 11 Indirect Financial Contribution
Comment 12 Whether the Provision of Steel Rounds is Specific
Comment 13 Benchmark Issues
Comment 14 Adequately Remunerated Transactions

Provision of Land for LTAR

Comment 15 Whether there is a Financial Contribution
Comment 16 Whether to Use an In-country Benchmark
Comment 17 Thai Benchmark Flaws
Comment 18 Whether Land is Specific
Comment 19 Provision of Land in the Tianjin Binhai New Area 
(``TBNA'')

Government Policy Lending

Comment 20 Whether Chinese Banks are Authorities
Comment 21 Whether the Policy Loan Program is Specific

Government Policy Lending Benchmarks

Comment 22 Whether the Department Should Use an In-country Benchmark
Comment 23 Whether the Regression is Statistically Valid
Comment 24 Terms of Loan Rates in the IMF Data
Comment 25 Whether Negative Real Interest Rates Should be Excluded 
from the Regression
Comment 26 Whether Certain Countries' Data Should be Removed From 
the IMF Data
Comment 27 Whether the Long-Term and Discount Rate are Flawed

Other Issues

Comment 28 New Subsidy Allegations
Comment 29 Export Restraints on Steel Rounds
Comment 30 Provision of Electricity for Less Than Adequate 
Remuneration
Comment 31 Critical Circumstances
Comment 32 Export Restraints on Coke
Comment 33 VAT Rebates

Company-specific Issues

Comment 34 Changbao Sales Denominator
Comment 35 Whether the Department Should Investigate Non-Initiated 
Programs for Changbao
Comment 36 Jianli Group Sales
Comment 37 Jianli Group Clerical Errors
Comment 38 Jianli Group Steel Rounds Data
Comment 39 TPCO Group Sales Denominator
Comment 40 TEDA Holding
Comment 41 TPCO Group Clerical Error
Comment 42 TPCO Group Accelerated Depreciation
Comment 43 WSP Steel Rounds Data
Comment 44 WSP Loans

[FR Doc. E9-28779 Filed 12-4-09; 8:45 am]
BILLING CODE 3510-DS-P