[Federal Register Volume 75, Number 186 (Monday, September 27, 2010)]
[Notices]
[Pages 59209-59212]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24182]


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DEPARTMENT Of COMMERCE

International Trade Administration

[C-560-824]


Certain Coated Paper Suitable for High-Quality Print Graphics 
Using Sheet-Fed Presses from Indonesia: Final Affirmative 
Countervailing Duty Determination

AGENCY: Import Administration, International Trade Administration, 
Department of Commerc.
SUMMARY: The Department of Commerce (the Department) has determined 
that countervailable subsidies are being provided to producers and 
exporters of certain coated paper suitable for high-quality print 
graphics using sheet-fed presses (coated paper) from Indonesia. For 
information on the estimated countervailing duty rates, please see the 
``Suspension of Liquidation'' section, below.

EFFECTIVE DATE: September 27, 2010.

FOR FURTHER INFORMATION CONTACT: Gene Calvert or Nicholas Czajkowski, 
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-
3586 and (202) 482-1395, respectively.

SUPPLEMENTARY INFORMATION:

Case History

    The following events have occurred since the announcement of the 
preliminary determination, which was published in the Federal Register 
on March 9, 2010. See Certain Coated Paper from Indonesia: Preliminary 
Affirmative Countervailing Duty Determination and Alignment of Final 
Countervailing Duty Determination with Final Antidumping Duty 
Determination, 75 FR 10761 (March 9, 2010) (Preliminary Determination).
    The Department issued additional supplemental questionnaires to the 
Government of Indonesia (GOI), and to cross-owned company respondents 
PT Pabrik Kertas Tjiwi Kimia Tbk., PT Indah Kiat Pulp and Paper Tbk., 
and PT Pindo Deli Pulp and Paper Mills (collectively, APP/SMG) 
regarding the programs under investigation. Parties submitted timely 
responses to these supplemental questionnaires on May 11 and May 26 
(the GOI and APP/SMG) and June 25 (the GOI only). On April 7 and April 
8, APP/SMG and Appleton Coated LLC, NewPage Corporation, S.D. Warren 
Company d/b/a Sappi Fine Paper North America, and the United Steel, 
Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial 
and Service Workers International Union (collectively, Petitioners), 
respectively, submitted timely requests for a hearing pursuant to 19 
CFR 351.310(c), which they both subsequently withdrew on August 6, 
2010.
    The Department conducted verification of the questionnaire 
responses submitted by the GOI and APP/SMG from June 28, 2010 through 
July 8, 2010. The Department issued the final business-proprietary 
version of the verification reports on August 6, 2010. We received case 
briefs from the GOI and APP/SMG, jointly, and from Petitioners on 
August 16. We received

[[Page 59210]]

rebuttal briefs from these parties on August 23.

Scope of the Investigation

    The merchandise under investigation includes certain coated paper 
and paperboard\1\ in sheets suitable for high quality print graphics 
using sheet-fed presses; coated on one or both sides with kaolin (China 
or other clay), calcium carbonate, titanium dioxide, and/or other 
inorganic substances; with or without a binder; having a GE brightness 
level of 80 or higher;\2\ weighing not more than 340 grams per square 
meter; whether gloss grade, satin grade, matte grade, dull grade, or 
any other grade of finish; whether or not surface-colored, surface-
decorated, printed (except as described below), embossed, or 
perforated; and irrespective of dimensions (Certain Coated Paper).
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    \1\ `` `Paperboard' refers to Certain Coated Paper that is 
heavier, thicker and more rigid than coated paper which otherwise 
meets the product description. In the context of Certain Coated 
Paper, paperboard typically is referred to as `cover,' to 
distinguish it from `text.'''
    \2\ One of the key measurements of any grade of paper is 
brightness. Generally speaking, the brighter the paper the better 
the contrast between the paper and the ink. Brightness is measured 
using a GE Reflectance Scale, which measures the reflection of light 
off of a grade of paper. One is the lowest reflection, or what would 
be given to a totally black grade, and 100 is the brightest measured 
grade.
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    Certain Coated Paper includes (a) coated free sheet paper and 
paperboard that meets this scope definition; (b) coated groundwood 
paper and paperboard produced from bleached chemi-thermo-mechanical 
pulp (BCTMP) that meets this scope definition; and (c) any other coated 
paper and paperboard that meets this scope definition.
    Certain Coated Paper is typically (but not exclusively) used for 
printing multi-colored graphics for catalogues, books, magazines, 
envelopes, labels and wraps, greeting cards, and other commercial 
printing applications requiring high quality print graphics.
    Specifically excluded from the scope are imports of paper and 
paperboard printed with final content printed text or graphics.
    As of 2009, imports of the subject merchandise are provided for 
under the following categories of the Harmonized Tariff Schedule of the 
United States (HTSUS): 4810.14.11, 4810.14.1900, 4810.14.2010, 
4810.14.2090, 4810.14.5000, 4810.14.6000, 4810.14.70, 4810.19.1100, 
4810.19.1900, 4810.19.2010, 4810.19.2090, 4810.22.1000, 4810.22.50, 
4810.22.6000, 4810.22.70, 4810.29.1000, 4810.29.5000, 4810.29.6000, 
4810.29.70, 4810.32, 4810.39 and 4810.92. While HTSUS subheadings are 
provided for convenience and customs purposes, the written description 
of the scope of the investigation is dispositive.

Scope Comments

    Following the Preliminary Determination, on August 3, 2010, the 
Department issued a decision memorandum addressing three scope issues 
in this and the concurrent antidumping and countervailing duty 
investigations on certain coated paper from Indonesia and the People's 
Republic of China: (1) whether to clarify the scope of these 
investigations to exclude multi-ply coated paper and paperboard; (2) 
whether to modify the scope language by striking the phrase ``suitable 
for high-quality print graphics;'' and (3) whether to add three HTSUS 
numbers which may include in-scope merchandise (i.e., HTSUS 4810.32, 
4810.39 and 4810.92). See August 3, 2010, Memorandum to Ronald K. 
Lorentzen, Deputy Assistant Secretary for Import Administration, from 
Susan Kuhbach, Director, Office 1, entitled ``Scope'' (August 3, 2010 
Scope Memorandum). For the reasons explained in the August 3, 2010, 
Scope Memorandum, the Department determined that: (1) multi-ply 
products that otherwise meet the description of the scope of the 
investigations are not excluded from the scope; (2) the ``suitable for 
high-quality print graphics'' language should not be deleted from the 
scope; and (3) the three HTSUS numbers at issue should be added to the 
scope.
    The Department subsequently provided the interested parties an 
opportunity to comment on its post-preliminary scope determination. In 
response, the respondents in these investigations filed a case brief on 
August 20, 2010, and the petitioners filed a rebuttal brief on August 
24, 2010. Based on the Department's analysis of these comments and the 
factual records of these investigations, the Department continues to 
find that multi-ply coated paper and paperboard are not excluded from 
the scope of the investigations, that the ``suitable for high-quality 
print graphics'' language should be maintained, and that the three 
HTSUS numbers listed above should be added to the scope. For a complete 
discussion of the parties' comments and the Department's position, see 
``Issues and Decision Memorandum for the Final Determination in the 
Countervailing Duty Investigation of Certain Coated Paper Suitable for 
High-Quality Print Graphics Using Sheet-Fed Presses from the People's 
Republic of China,'' dated concurrently with this notice and 
incorporated herein by reference.

Injury Test

    Because Indonesia is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Tariff Act of 1930, as amended (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 Indonesia materially injure, or threaten material 
injury to, a United States industry. On November 23, 2009, 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 Indonesia of subject 
merchandise. See Certain Coated Paper Suitable for High-Quality Print 
Graphics Using Sheet-Fed Presses from China and Indonesia, 74 FR 61174 
(November 23, 2009); and Certain Coated Paper Suitable for High-Quality 
Print Graphics Using Sheet-Fed Presses from China and Indonesia 
(Preliminary), USITC Pub. 4108, Inv. Nos. 701-TA-470-471 and 731-TA-
1169-1170 (November 2009).

Period of Investigation

    The period for which we are measuring subsidies, i.e., the period 
of investigation (POI), is January 1, 2008 through December 31, 2008.

Analysis of Comments Received

    All non-scope issues raised in the case and rebuttal briefs 
submitted by the GOI, APP/SMG, and Petitioners are addressed in the 
Memorandum to Ronald K. Lorentzen, Deputy Assistant Secretary for 
Import Administration, ``Issues and Decision Memorandum for Certain 
Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed 
Presses from Indonesia: Final Affirmative Countervailing Duty 
Determination'' (September 20, 2010) (hereafter referred to as the 
``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 this public memorandum in the Department's 
Central Records Unit, located in Room 7046 in the main Commerce 
building. In addition, a complete version of the Decision Memorandum 
can be accessed directly on the Internet at http://ia.ita.doc.gov/ia-highlights-and-news.html or http://ia.ita.doc.gov/frn/. The paper copy 
and

[[Page 59211]]

electronic version of the Decision Memorandum are identical in content.

Application of Adverse Facts Available

    For purposes of this final determination, we relied, in part, on 
adverse facts available (AFA), as provided for in sections 776(a) and 
(b) of the Act, to determine the countervailable subsidy rate for one 
program under investigation. A full discussion of our decision to apply 
AFA is presented in the Decision Memorandum in the section 
``Application of Facts Otherwise Available.''

Suspension of Liquidation

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have 
calculated an individual rate for APP/SMG. Section 705(c)(5)(A)(i) of 
the Act states that for companies not investigated, we 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 based entirely on AFA under section 776 of the 
Act.

------------------------------------------------------------------------
                  Producer/Exporter                    Net Subsidy Rate
------------------------------------------------------------------------
PT Pabrik Kertas Tjiwi Kimia, Tbk...................
PT Pindo Deli Pulp and Paper Mills..................
PT Indah Kiat Pulp and Paper, Tbk...................
(i.e., APP/SMG).....................................              17.94%
All Others..........................................              17.94%
------------------------------------------------------------------------

    Although suspension of liquidation was required on the date of 
publication of the Preliminary Determination, we subsequently 
instructed U.S. Customs and Border Protection, pursuant to section 
703(d) of the Act, to discontinue the suspension of liquidation for 
countervailing duty purposes for subject merchandise entered on or 
after July 7, 2010, but to continue the suspension of liquidation of 
entries made on or after March 9, 2010 (the publication date of the 
Preliminary Determination) through July 6, 2010.
    If the ITC issues a final affirmative injury determination, we will 
issue a countervailing duty order and continue with the suspension of 
liquidation under section 706(a) of the Act. We will then require a 
cash deposit of estimated countervailing duties for entries of subject 
merchandise in the amounts indicated above. If the ITC determines that 
material injury, or threat of material injury, 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 that 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 an 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 issued and published pursuant to sections 
705(d) and 777(i) of the Act.

    Dated: Septmber 20, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.

APPENDIX

Issues and Decision Memorandum

I. Summary
II. Background
III. Subsidies Valuation
    A. Period of Investigation
    B. Allocation Period
    C. Discount Rates and Uncreditworthiness
    D. Cross-Ownership
    E. Attribution of Subsidies Sales Denominator
IV. Application of Facts Otherwise Available
    A. APP/SMG Purchased Its Own Debt from the GOI
    B. Corroboration
V. Analysis of Programs
    A. Programs Determined To Be Countervailable
    1. Provision of Standing Timber for Less Than Adequate Remuneration
    2. Government Prohibition of Log Exports
    3. Debt Forgiveness Through the Indonesian Government's Acceptance 
of Financial Instruments with No Market Value
    4. Debt Forgiveness Through APP/SMG's Buyback of Its Own Debt from 
the Indonesian Government
    B. Programs Determined To Have Been Not Used During the Period of 
Investigation
    1. Government Provision of Interest Free Reforestation Loans
    2. Government Forgiveness of Stumpage Obligations
    3. Tax Incentives for Investment in Priority Business Lines and 
Designated Regions
    a. Corporate Income Tax Deduction
    b. Accelerated Depreciation and Amortization
    c. Extension of Loss Carryforward
    d. Reduced Withholding Tax on Dividends
VI. Analysis of Comments
Provision of Standing Timber/Log Export Ban
Comment 1: Whether the Department Should Account for any Volumes of 
Timber Determined to have been Harvested Contrary to Indonesian Law in 
its Benefit Calculations
Comment 2: Whether the Department Should Adjust APP/SMG's Reported 
Harvest Based on its Verification Findings
Comment 3: Whether the Department Should Use the GOI Conversion Factor 
Study for Conversion Ratios
Comment 4: Whether the Department has Assumed the Existence of 
Distortive Effects Due to the Log Export Ban
Log Benchmarks
Comment 5: Whether Export Prices to Indonesia Should be Used as the 
Basis for Benchmark Calculations
Comment 6: Whether Specific Export Transactions Provided by Respondents 
are an Appropriate Starting Point for Calculating a Benchmark
Comment 7: Whether the Sabah Export Data Provides an Appropriate 
Starting Point for Calculating a Benchmark
Comment 8: Whether Other Data on the Record Provides an Appropriate 
Starting Point for Calculating a Benchmark
Comment 9: Whether the AUV from the WTA Should be Used Only as a 
Fallback when More Specific Information is not Available
Comment 10: Whether the Department Should Make an Adjustment to 
Reported Export Quantities from Malaysia in the WTA Data

[[Page 59212]]

Comment 11: Whether Certain HTS numbers Should Be Excluded from WTA 
Statistics
Comment 12: The Department Should Ensure that its Benchmark for the Log 
Export Ban Program Captures the Full Price an Indonesian Firm Would Pay 
for Imported Pulp Logs
Comment 13: Whether the Department Should Use Monthly Malaysian 
Exchange Rates to Convert the Monthly Malaysian Export Statistics used 
as Benchmarks
Comment 14: Whether the Department Should Round the Malaysian Export 
Statistics
Comment 15: Whether the Department Should Use the GOI Study of 
Operating Costs in Indonesia to Adjust the Benchmark for the Provision 
of Standing Timber
Debt Forgiveness
Comment 16: Whether the Department Should Apply AFA Regarding Debt 
Forgiveness through APP/SMG's Buyback of its Own Debt
Comment 17: Whether Commerce's Decision to Cancel the Verification of 
the IBRA Debt Sale Was Improper
Comment 18: Whether the Department Should Apply the Highest Rate 
Calculated for any Other Program as AFA Regarding the APP/SMG Debt 
Buyback Allegation
Comment 19: Whether the Department Should Adjust the Benefit 
Calculation Regarding the APP/SMG Debt Buyback Program
Comment 20: Whether the Department Should Revise the Interest Rate Used 
to Calculate the Discount Rate Used for Calculating APP/SMG's Allocable 
Subsidies
Other
Comment 21: Whether the Department Should Countervail SPA's Outstanding 
DR Fees as an Interest-Free Loan
VII. Recommendation
[FR Doc. 2010-24182 Filed 9-24-10; 8:45 am]
BILLING CODE 3510-DS-S