[Federal Register Volume 75, Number 86 (Wednesday, May 5, 2010)]
[Notices]
[Pages 24575-24577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-10302]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-963]


Certain Potassium Phosphate Salts from the People's Republic of 
China: Preliminary Affirmative Determination of Critical Circumstances 
in the Countervailing Duty Investigation

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

SUMMARY: The Department of Commerce (``the Department'') has 
preliminarily determined that critical circumstances exist with respect 
to imports of certain potassium phosphate salts (``phosphate salts'' or 
``subject merchandise'') from the People's Republic of China (``PRC'').

DATES: Effective Date: May 5, 2010

FOR FURTHER INFORMATION CONTACT: Andrew Huston or Gene Calvert, AD/CVD 
Operations, Office 6, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
4261 and (202) 482-3586, respectively.

SUPPLEMENTARY INFORMATION:

Background

    This investigation was initiated on October 14, 2009. See Certain 
Sodium and Potassium Phosphate Salts From the People's Republic of 
China: Initiation of Countervailing Duty Investigation, 74 FR 54778 
(October 23, 2009). The products covered by this investigation and the 
title of this investigation were modified from ``Certain Sodium and 
Potassium Phosphate Salts from the People's Republic of China'' to 
``Certain Potassium Phosphate Salts from the People's Republic of 
China'' as a result of the U.S. International Trade Commission's 
(``ITC'') preliminary determination of no material injury or threat of 
material injury with regard to imports of sodium tripolyphosphate from 
the PRC. See Certain Potassium Phosphate Salts from the People's 
Republic of China: Preliminary Affirmative Countervailing Duty 
Determination and Alignment of Final Countervailing Duty Determination 
with Final Antidumping Duty Determination, 75 FR 10466 (March 8, 2010) 
(Preliminary Determination), at the section ``Case History.'' As 
mandatory company respondents in this investigation, the Department 
selected Lianyungang Mupro Import Export Co., Ltd. (``Mupro''); 
Mianyang Aostar Phosphate Chemical Industry Co., Ltd.

[[Page 24576]]

(``Aostar''); and Shifang Anda Chemicals Co., Ltd. (``Anda'') 
(collectively, ``the mandatory company respondents''). On December 4, 
2009, the Department issued countervailing duty (``CVD'') investigation 
questionnaires to the Government of the People's Republic of China 
(``GOC'') and to the mandatory company respondents. Neither the GOC nor 
the three mandatory company respondents submitted any responses to the 
Department's questionnaires. As such, our preliminary determination was 
based on the application of adverse facts available (``AFA'') in 
accordance with sections 776(a) and (b) of the Tariff Act of 1930, as 
amended (``the Act''). See Preliminary Determination.
    On April 6, 2010, ICL Performance Products LP and Prayon, Inc. 
(collectively, ``Petitioners''), alleged that critical circumstances 
exist with respect to imports of certain potassium phosphate salts from 
the PRC. See Petitioners' April 6, 2010 submission (``Allegation of 
Critical Circumstances''). In accordance with 19 CFR 351.206(c)(2)(ii), 
when a critical circumstances allegation is filed later than 20 days 
before the scheduled date of the preliminary determination (as was done 
in this case), the Department must issue its preliminary determination 
of critical circumstances not later than 30 days after the petitioner 
submits the allegation.

Period of Investigation

    The period covered by this investigation (i.e., ``the POI'') is 
calendar year 2008 (January 1, 2008 through December 31, 2008).

Scope of the Investigation

    The phosphate salts covered by this investigation include anhydrous 
Monopotassium Phosphate (MKP), anhydrous Dipotassium Phosphate (DKP) 
and Tetrapotassium Pyrophosphate (TKPP), whether anhydrous or in 
solution (collectively ``phosphate salts'').
    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, Harmonized Tariff Schedule of the United States 
(``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 products covered by this investigation include anhydrous MKP and 
DKP without regard to the physical form, whether crushed, granule, 
powder or fines. Also covered are all forms of 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.

Allegation of Critical Circumstances

    In their Allegation of Critical Circumstances, Petitioners contend 
that there have been massive imports over a relatively short period of 
certain potassium phosphate salts from the PRC since the filing of the 
petition. Petitioners have provided import statistics released by the 
U.S. International Trade Commission (``ITC'') and shipment information 
for the merchandise under investigation. See Allegation of Critical 
Circumstances, at 6-7. Petitioners argue that these data demonstrate 
that imports of subject merchandise from the PRC have increased more 
than the fifteen percent required to be considered ``massive'' under 19 
CFR 351.206(h)(2).
    In addition, Petitioners allege that the phosphate salts industry 
in the PRC has benefitted from subsidies that are inconsistent with the 
World Trade Organization's Agreement on Subsidies and Countervailing 
Measures (``Subsidies Agreement''). See Allegation of Critical 
Circumstances at 2-3.\1\
---------------------------------------------------------------------------

    \1\ Specifically, Petitioners cite export subsidies and import 
substitution subsidies which the Department preliminarily determined 
to be countervailable in the instant investigation, such as Income 
Tax Exemption Programs for Export Oriented Industries; Income Tax 
Credit on Purchases of Domestically Produced Equipment; Value Added 
Tax Refund for FIEs Purchasing Domestically Produced Equipment; and 
Discount Loans for Export Oriented Industries. See Preliminary 
Determination, 75 FR at 10469.
---------------------------------------------------------------------------

    In accordance with 19 CFR 351.206(c)(2)(ii), because the 
petitioners submitted a critical circumstances allegation later than 20 
days before the scheduled date of the preliminary determination, the 
Department must issue a preliminary critical circumstances 
determination within 30 days after the petitioner submits the 
allegation. See, e.g., Change in Policy Regarding Timing of Issuance of 
Critical Circumstances Determinations, 63 FR 55364 (October 15, 1998). 
Critical Circumstances Analysis
    Section 703(e)(1) of the Act provides that the Department will 
preliminarily determine that critical circumstances exist if there is a 
reasonable basis to believe or suspect that: (A) The alleged 
countervailable subsidy is inconsistent with the Subsidies Agreement, 
and (B) there have been massive imports of the subject merchandise over 
a relatively short period.
    In determining whether an alleged countervailable subsidy is 
inconsistent with the Subsidies Agreement, the Department limits its 
critical circumstances findings to those subsidies contingent upon 
export performance or use of domestic over imported goods (i.e., those 
prohibited under Article 3 of the Subsidies Agreement). See, e.g., 
Final Affirmative Countervailing Duty Determination and Final Negative 
Critical Circumstances Determination Carbon and Certain Alloy Steel 
Wire Rod from Germany, 67 FR 55808, 55809 (August 30, 2002).
    Section 351.206(h)(1) of the Department's regulations provides 
that, in determining whether imports of the subject merchandise have 
been ``massive,'' the Department normally will examine: (i) The volume 
and value of the imports; (ii) seasonal trends; and (iii) the share of 
domestic consumption accounted for by the imports. In addition, the 
Department will not consider imports to be massive unless imports 
during the ``relatively short period'' (``comparison period'') have 
increased by at least fifteen percent compared to imports during an 
``immediately preceding period of comparable duration'' (``base 
period''). See 19 CFR 351.206(h)(2).
    Section 351.206(i) of the Department's regulations defines 
``relatively short period'' as normally being the period beginning on 
the date the proceeding commences (i.e., the date the petition is 
filed) and ending at least three months later. However, if the 
Department finds that importers, exporters, or producers had reason to 
believe, at some time prior to the beginning of the proceeding, that a 
proceeding was likely, then the Department may consider a period of

[[Page 24577]]

not less than three months from that earlier time. See 19 CFR 
351.206(i).

Application of Facts Available to the Critical Circumstances Analysis 
for the Mandatory Company Respondents

    Sections 776(a)(1) and (2) of the Act provide that the Department 
shall apply ``facts otherwise available'' if, inter alia, necessary 
information is not on the record or an interested party or any other 
person: (A) Withholds information that has been requested; (B) fails to 
provide information within the deadlines established, or in the form 
and manner requested by the Department, subject to subsections (c)(1) 
and (e) of section 782 of the Act; (C) significantly impedes a 
proceeding; or (D) provides information that cannot be verified as 
provided by section 782(i) of the Act. In the instant case, as 
referenced above, the GOC did not respond to the Department's November 
10, 2009 CVD investigation questionnaire, and the three mandatory 
respondent companies, Mupro, Aostar, and Anda, did not respond to the 
Department's December 4, 2009 CVD investigation questionnaire. Because 
the GOC and the mandatory company respondents have decided to not 
participate in this investigation, we have made this preliminary 
determination with respect to critical circumstances on facts otherwise 
available, pursuant to section 776(a)(2)(C) of the Act.
    Section 776(b) of the Act further provides that the Department may 
use an adverse inference in applying the facts otherwise available when 
a party has failed to cooperate by not acting to the best of its 
ability to comply with a request for information. Section 776(b) of the 
Act also authorizes the Department to use as adverse facts available 
information derived from the petition, the final determination, a 
previous administrative review, or other information placed on the 
record. Because the GOC and the mandatory company respondents chose not 
to respond to the Department's CVD investigation questionnaire, we have 
determined that the GOC and the mandatory company respondents did not 
cooperate to the best of their ability in this investigation and that, 
in selecting from among the facts available, with respect to critical 
circumstances, an adverse inference is warranted, pursuant to section 
776(b) of the Act. As such, we are making an adverse inference that 
Mupro, Aostar, and Anda each benefitted from import substitution and 
export subsidies, which are inconsistent with the Subsidies Agreement, 
and that these companies have had ``massive imports'' over a 
``relatively short period.'' Given the nature of these allegations, and 
the lack of cooperation from the GOC and the mandatory company 
respondents, we preliminarily determine that critical circumstances 
exist for Mupro, Aostar, and Anda, pursuant to sections 703(e) and 
776(a) and (b) of the Act, and 19 CFR 351.206(c)(2)(ii).

Critical Circumstances Analyses for All Other Producers/Exporters

    To determine whether all other PRC producers/exporters of the 
subject merchandise under investigation have benefitted from 
countervailable subsidies that are inconsistent with the Subsidies 
Agreement, we are basing our finding on the decision applied to Mupro, 
Aostar, and Anda, and, therefore, find that all other producers/
exporters have benefitted from import substitution and export 
subsidies. See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value and Affirmative Final Determination of Critical 
Circumstances: Glycine from Japan, 72 FR 67271, 67274 (November 28, 
2007) (Glycine from Japan). In the Preliminary Determination, the 
subsidies determined to be countervailable included subsidy programs 
that are inconsistent with the Subsidies Agreement, such as export 
subsidy programs (e.g., Income Tax Exemption Programs for Export 
Oriented Industries and Discount Loans for Export Oriented Industries), 
and import substitution subsidy programs (e.g., Income Tax Credit on 
Purchases of Domestically Produced Equipment and Refund for FIEs 
Purchasing Domestically Produced Equipment). See Preliminary 
Determination, 75 FR at 10469.
    To determine whether there are ``massive imports'' over a 
``relatively short period,'' for all other producers/exporters, we have 
relied on U.S. import statistics. In their Allegation of Critical 
Circumstances, Petitioners have provided ITC monthly import statistics 
for the merchandise under investigation for the period June 2009 
through January 2010. Consistent with Glycine from Japan, we are using 
the ITC monthly import statistics to determine whether there are 
``massive imports'' with respect to all other producers/exporters. 
Based on our analyses of these import data, we preliminarily find that 
imports of subject merchandise from the PRC did increase by more than 
fifteen percent during the ``relatively short period'' (i.e., between 
June 2009 through September 2009, and October 2009 through January 
2010). Therefore, we preliminarily determine that the requirements of 
section 703(e)(1)(B) of the Act have been satisfied, and that critical 
circumstances exist for all other PRC producers/exporters of subject 
merchandise.

Conclusion

    Given the analysis above, we preliminarily determine that critical 
circumstances exist for imports of certain potassium phosphate salts 
from the PRC, pursuant to section 703(e)(1) of the Act. We will make 
our final determination concerning critical circumstances for imports 
of certain potassium salts from the PRC when we make our final 
countervailing duty determination, currently scheduled for no later 
than May 24, 2010.

Suspension of Liquidation

    In accordance with section 703(e)(2)(A) of the Act, we are 
directing CBP to suspend liquidation of any unliquidated entries of 
subject merchandise from the PRC entered, or withdrawn from warehouse 
for consumption, on or after December 8, 2009, which is 90 days prior 
to the date of publication of the Preliminary Determination in the 
Federal Register.

International Trade Commission Notification

    In accordance with section 703(f) of the Act, we will notify the 
ITC of this preliminary determination.

Public Comment

    Because this preliminary determination is being made subsequent to 
the deadline for public comment as set forth in the Preliminary 
Determination, we will accept written comments limited to this 
preliminary determination of critical circumstances if they are 
submitted to the Assistant Secretary for Import Administration no later 
than five days after the publication of this notice in accordance with 
the filing requirements set forth in 19 CFR 351.303.
    This preliminary determination is issued and published pursuant to 
sections 703(f) and 777(i) of the Act.

    Dated: April 29, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-10302 Filed 5-4-10; 8:45 am]
BILLING CODE 3510-DS-P