[Federal Register Volume 76, Number 18 (Thursday, January 27, 2011)]
[Notices]
[Pages 4866-4867]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-1793]
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DEPARTMENT OF COMMERCE
International Trade Administration
Proposed Methodology for Implementation of Section 772(c)(2)(B)
of the Tariff Act of 1930, as Amended, In Certain Non-Market Economy
Antidumping Proceedings; Request for Comment
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (the ``Department'') seeks public
comment on its proposed methodological change to reduce the export
price or constructed export price in certain non-market economy
(``NME'') antidumping proceedings by the amount of an export tax, duty,
or other charge, pursuant to section 772(c)(2)(B) of the Tariff Act of
1930, as amended.
DATES: To be assured of consideration, comments must be received no
later than February 28, 2011.
FOR FURTHER INFORMATION CONTACT: Albert Hsu, Senior Economist, Office
of Policy, Import Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW., Washington, DC 20230; telephone:
(202) 482-4491.
SUPPLEMENTARY INFORMATION:
Background
Pursuant to section 772(c)(2)(B) of the Tariff Act of 1930, as
amended (the ``Act''), the Department is instructed to reduce the
export price or constructed export price used in the dumping margin
calculation by ``the amount, if included in such price, of any export
tax, duty, or other charge imposed by the exporting country on the
exportation of the subject merchandise to the United States, other than
an export tax, duty, or other charge described in section 771(6)(C) {of
the Act{time} .'' However, the Department's administrative practice has
been that it cannot apply section 772(c)(2)(B) in NME antidumping
proceedings because pervasive government intervention in NMEs precluded
proper valuation of taxes paid by NME respondents to NME governments.
This practice originated in the less-than-fair-value investigations of
pure magnesium and magnesium alloy from the Russian Federation, which
the Department then considered to be an NME. See Pure Magnesium and
Alloy Magnesium from the Russian Federation, 60 FR 16440 (Mar. 30,
1995) (final determination of sales at less than fair value) (``Russian
Magnesium'') (Comment 10). In those investigations, the Department
determined not to reduce the NME respondents' U.S. prices based upon an
export tax paid to the NME government, the Russian Federation. Id.
The Russian Magnesium petitioners subsequently challenged this
determination before the Court of International Trade (``CIT''), and
the CIT granted the Department's request for a voluntary remand to
further explain its reasoning. See Magnesium Corp. of America v. United
States, 20 CIT 1092, 1113-14 (1996) (``Mag. Corp. I''). In its remand
results, the Department explained its ``uniform approach'' to transfers
between NME governments and NME companies. The Department stated, in
relevant part:
The {NME{time} is governed by a presumption of widespread
intervention and influence in the economic activities of
enterprises. An export tax charged for one purpose may be offset by
government transfers provided for another purpose. * * *
To make a deduction for export taxes imposed by a NME government
would unreasonably isolate one part of the web of transactions
between government and producer. The Department's uniform approach
to intra-NME transfers can be seen in its policy regarding transfers
(or ``subsidies'') paid by a NME government to a NME producer. The
Department--with the approval of the Court of Appeals--has declined
to find such transfers to be subsidies given the nature of a
{NME{time} . Such an economy is riddled with distortions, with the
government influencing prices and cost structures, regulating
investment, wages and private ownership, and allocating credit.
Attempts to isolate individual government interventions in this
setting--whether they be transfers from the government or from
exporters to the government--make no sense.
See Remand Redetermination: Magnesium Corp. of America, et al. v.
United States, at 6-8, dated Oct. 28, 1996 (``Remand Redetermination'')
(available at: http://ia.ita.doc.gov/tlei/index.html).
The CIT upheld the Department's remand results. See Magnesium Corp.
of America v. United States, 20 CIT 1464, 1466 (1996) (``Mag. Corp.
II''). The U.S. Court of Appeals for the Federal Circuit then affirmed
the CIT's decision, stating that it agreed with the reasoning put
forward in the Department's Remand Redetermination. See Magnesium Corp.
of America, 166 F.3d 1364, 1370-71 (Fed. Cir. 1999) (``Mag. Corp.
III'').
However, since Mag. Corp. III, the Department has changed its
practice with respect to application of the countervailing duty
(``CVD'') law to subsidized merchandise from China and Vietnam, which
the Department continues to designate as NMEs. As explained in the
countervailing duty investigations of Coated Free Sheet
[[Page 4867]]
Paper from China and Polyethylene Retail Carrier Bags from Vietnam, the
present-day Chinese and Vietnamese economies are sufficiently
dissimilar from Soviet-style economies that the Department can
determine whether the Chinese or Vietnamese government have bestowed an
identifiable and measurable benefit upon a producer, and whether the
benefit is specific, including certain measures related to taxation.
See ``Whether the Analytical Elements of the Georgetown Steel Opinion
are Applicable to China's Present-Day Economy,'' dated Mar. 29, 2007
(available at: http://ia.ita.doc.gov/download/prc-cfsp/CFS%20China.
Georgetown%20applicability.pdf); Polyethylene Retail Carrier Bags from
the Socialist Republic of Vietnam, 74 FR 45811, 45813-14 (Sept. 4,
2009) (prelim. affirmative CVD determination), unchanged in final
determination, 75 FR 16428 (Apr. 1, 2010) (final affirmative CVD
determination), and accompanying Issues and Decision Memo. at III
(Applicability of the CVD Law to Vietnam).
Pursuant to its determination that subsidies from certain NME
governments to NME companies can be identified and measured, upon
further reflection, the Department has reconsidered its administrative
practice that taxes paid by NME companies to these NME governments
cannot be identified and measured. Specifically, the Department
proposes to change the administrative practice set forth in Russian
Magnesium, as upheld in the Mag. Corp. cases, with respect to China and
Vietnam. Accordingly, pursuant to section 772(c)(2)(B), the Department
proposes to reduce the export price and constructed export price used
in NME dumping margin calculations based upon export taxes and similar
charges, including value added taxes (``VAT'') applied to export sales,
imposed by the Chinese and Vietnamese governments in future less-than-
fair-value investigations and administrative reviews of antidumping
duty orders. This methodology may later be applied to other NMEs,
pursuant to a determination that the NME at issue is dissimilar from
Soviet-style economies.
Therefore, as detailed below, the Department is proposing the
following methodology to implement section 772(c)(2)(B) in future
antidumping duty investigations and administrative reviews involving
merchandise from China and Vietnam.
Proposed Methodology
The Department would determine whether, as a matter of law,
regulation, or other official action, the NME government has imposed
``an export tax, duty, or other charge'' upon the subject merchandise
during the period of investigation or the period of review (e.g.,
export tax or VAT that is not fully refunded upon exportation). The
Department anticipates that parties would place upon the record copies
of laws, regulations, other official documents, or similar publicly
available information that is demonstrative of government action in
this regard. The Department would also consider evidence as to whether
the particular respondent(s) was, in some manner, exempted from the
requirement to pay the export tax, duty, or other charge. The
Department anticipates that such evidence would include official
documentation of the respondent's exemption.
Provided that the NME government imposed an export tax, duty, or
other charge on subject merchandise as contemplated by section
772(c)(2)(B), and the respondent was not exempted from it, the
Department would reduce the respondents' export price and constructed
export price accordingly. The Department anticipates that, in most
instances, the export tax, VAT, duty, or other charge will be assessed
as a percentage of the price. In such cases, the Department would
adjust the export price or constructed export price downward by the
same percentage. In instances where the tax or charge is a flat fee or
similar charge denominated in NME currency, the Department would
determine the ratio of the flat fee to the respondent's export price or
constructed export price as denominated in its domestic currency, and
would then adjust the export price or constructed export price downward
by the same ratio.
Submission of Comments: As specified above, to be assured of
consideration, comments must be received no later than February 28,
2011. All comments must be submitted through the Federal eRulemaking
Portal at http://www.regulations.gov, Docket No. ITA-2010-0008, unless
the commenter does not have access to the Internet. Commenters that do
not have access to the Internet may submit the original and two copies
of each set of comments by mail or hand delivery/courier. All comments
should be addressed to the Secretary of Commerce, Attn: Albert Hsu,
Senior Economist, Office of Policy, Room 1870, Department of Commerce,
14th Street and Constitution Ave., NW., Washington, DC 20230.
The Department will consider all comments received before the close
of the comment period. The Department will not accept comments
accompanied by a request that part or all of the material be treated
confidentially because of its business proprietary nature or for any
other reason. All comments responding to this notice will be a matter
of public record and will be available for inspection at Import
Administration's Central Records Unit (Room 7046 of the Herbert C.
Hoover Building) and on the Department's Web site at http://www.trade.gov/ia/.
Any questions concerning file formatting, document conversion,
access on the Internet, or other electronic filing issues should be
addressed to Andrew Lee Beller, Import Administration Webmaster, at
(202) 482-0866, e-mail address: [email protected].
Dated: January 21, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-1793 Filed 1-26-11; 8:45 am]
BILLING CODE 3510-DS-P