[Federal Register Volume 76, Number 80 (Tuesday, April 26, 2011)]
[Notices]
[Pages 23302-23305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10078]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-974]


Certain Steel Wheels From the People's Republic of China: 
Initiation of Countervailing Duty Investigation

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

DATES: Effective Date: April 26, 2011.

FOR FURTHER INFORMATION CONTACT: Kristen Johnson or Eric B. Greynolds, 
AD/CVD Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
4793 and (202) 482-6071, respectively.

SUPPLEMENTARY INFORMATION: 

The Petition

    On March 30, 2011, the Department of Commerce (the Department) 
received a countervailing duty (CVD) petition concerning imports of 
certain steel wheels (steel wheels) from the People's Republic of China 
(the PRC) filed in proper form by Accuride Corporation (Accuride) and 
Hayes Lemmerz International, Inc. (collectively, Petitioners).\1\
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    \1\ See Petition for the Imposition of Countervailing Duties 
(Petition), filed on March 30, 2011. A public version of the 
Petition and all other public documents and public versions are 
available on the public file in the Central Records Unit (CRU), Room 
7046 of the main Department of Commerce building.
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    On April 6, 2011, the Department issued supplemental questions to 
Petitioners regarding certain issues in the Petition.\2\ Petitioners 
responded to the questions with supplemental responses on April 11, 
2011.\3\ On April 12, 2011, the Department requested additional 
information on certain issues.\4\ On April 14, 2011, Petitioners 
provided a response to the Department's requests.\5\ On April 14, 2011, 
the Department requested further clarification with respect to the 
Petition, which Petitioners submitted on April 15, 2011.\6\ On April 
18, 2011, the Department further clarified the scope of the Petition 
with Petitioners.\7\
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    \2\ See April 6, 2011, Petition for the Imposition of 
Countervailing Duties on Steel Wheels from the People's Republic of 
China: Supplemental Questions, and April 6, 2011, Petition for the 
Imposition of Antidumping Duties on Steel Wheels from the People's 
Republic of China: Supplemental Questions.
    \3\ See Supplement to the AD/CVD Petitions dated April 11, 2011 
(First Supplement to the AD/CVD Petitions).
    \4\ See April 12, 2011, Memorandum to the File, regarding 
``Phone Conference with and Request for Further Information from 
Petitioners.''
    \5\ See Supplement to the AD/CVD Petitions dated April 14, 2011 
(Second Supplement to the AD/CVD Petitions).
    \6\ See Supplement to the AD/CVD Petitions dated April 15, 2011 
(Third Supplement to the AD/CVD Petitions).
    \7\ See April 18, 2011, Memorandum to the File, regarding 
``Petitions for the Imposition of Antidumping and Countervailing 
Duties on Steel Wheels from the People's Republic of China--
Clarification of Scope Language.''
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    In accordance with section 702(b)(1) of the Tariff Act of 1930, as 
amended (the Act), Petitioners allege that producers/exporters of steel 
wheels from the PRC received countervailable subsidies within the 
meaning of sections 701 and 771(5) of the Act, and that imports from 
these producers/exporters materially injure, and threaten further 
material injury to, an industry in the United States.
    The Department finds that Petitioners filed the Petition on behalf 
of the domestic industry because Petitioners are interested parties, as 
defined in section 771(9)(C) of the Act, and they have demonstrated 
sufficient industry support with respect to the investigation that they 
are requesting the Department to initiate (see ``Determination of 
Industry Support for the Petition'' below). The Department also notes 
that, pursuant to section 702(b)(1) of the Act, the Petition is 
accompanied by information reasonably available to Petitioners 
supporting their allegations.

Period of Investigation

    The proposed period of investigation is January 1, 2010, through 
December 31, 2010.

Scope of Investigation

    The products covered by this investigation are steel wheels from 
the PRC. For a full description of the scope of the investigation, see 
``Scope of the Investigation,'' in Appendix I of this notice.

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 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 interested 
parties to submit such comments by Monday, May 9, 2011, 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 
determination.

Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, on March 30, 2011, 
the Department invited representatives of the Government of the PRC 
(the GOC) for consultations with respect to the CVD petition. On April 
14, 2011, the Department held consultations with representatives of the 
GOC via a conference call. See Memorandum on Consultations with 
Officials from the Government of the People's Republic of China on the 
Countervailing Duty Petitions regarding Steel Wheels and Galvanized 
Steel Wire (April 15, 2011).

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

[[Page 23303]]

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 to poll the industry.
    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 (see 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.\8\ 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 title.'' Thus, the 
reference point from which the domestic like product analysis begins is 
``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).
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    \8\ 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).
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    With regard to the domestic like product, Petitioners do not offer 
a definition of domestic like product distinct from the scope of the 
investigation. Based on our analysis of the information submitted on 
the record, we have determined that steel wheels constitute a single 
domestic like product and we have analyzed industry support in terms of 
that domestic like product.\9\
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    \9\ For a discussion of the domestic like product analysis in 
this case, see Countervailing Duty Investigation Initiation 
Checklist: Certain Steel Wheels from the People's Republic of China 
(Initiation Checklist), at Attachment II, Analysis of Industry 
Support for the Petitions Covering Steel Wheels from the People's 
Republic of China, on file in the CRU.
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    In determining whether Petitioners have standing under section 
702(c)(4)(A) of the Act, we considered the industry support data 
contained in the Petition with reference to the domestic like product 
as defined in the ``Scope of Investigation'' section in Appendix I of 
this notice. To establish industry support, Petitioners provided their 
production of the domestic like product in 2010.\10\ Petitioners 
compared their production to the estimated total production of the 
domestic like product for the entire domestic industry.\11\ To support 
their estimation of industry support, Petitioners provided an affidavit 
from an employee of Accuride, who has 40 years professional experience 
in the steel industry.\12\ We have relied upon data Petitioners 
provided for purposes of measuring industry support.\13\
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    \10\ See Volume I of the Petition at I-3.
    \11\ See id.
    \12\ See Second Supplement to the AD/CVD Petitions, at 1, and 
Exhibit 1.
    \13\ For further discussion, see Initiation Checklist at 
Attachment II.
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    Our 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. First, 
the Petition established support from domestic producers (or workers) 
accounting for more than 50 percent of the total production of the 
domestic like product and, as such, we find that the Department is not 
required to take further action in order to evaluate industry support 
(e.g., polling).\14\ Second, we find that 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 domestic like product.\15\ Finally, we find 
that 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 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.
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    \14\ See section 702(c)(4)(D) of the Act, and Initiation 
Checklist at Attachment II.
    \15\ See Initiation Checklist at Attachment II.
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    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) of the Act and they have demonstrated sufficient 
industry support with respect to the CVD investigation that they are 
requesting the Department initiate.\16\
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    \16\ See id.
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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 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 steel wheels 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 steel wheels. In addition, Petitioners provide data that 
demonstrates that the alleged imports exceed the negligibility 
threshold provided for under section 771(24)(A) of the Act.
    Petitioners contend that the industry's injured condition is 
illustrated by reduced market share, lost sales and revenues, reduced 
production, reduced capacity utilization rate, decreased shipments, 
underselling, reduced employment, reduced hours worked, and reduced 
wages paid, decline in financial performance, and an increase in import 
penetration.\17\ 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.\18\
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    \17\ See Volume I of the Petition, at I-6 to 12, and Exhibits 1-
4 to 1-9.
    \18\ See Initiation Checklist at Attachment III.
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Initiation of Countervailing Duty Investigation

    Section 702(b)(1) 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 Petition on 
steel wheels from the PRC and finds

[[Page 23304]]

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 steel wheels 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. Preferential Loans and Interest Rates

    1. Policy Loans to the Steel Wheels Industry.
    2. Treasury Bond Loans.
    3. Preferential Loans for State-Owned Enterprises (SOEs).

B. Income Tax and Other Direct Tax Benefit Program

    1. Income Tax Credits for Domestically-Owned Companies Purchasing. 
Domestically-Produced Equipment.

C. Subsidies for Foreign Invested Enterprises (FIEs)

    1. Two Free, Three Half Program.
    2. Local Income Tax Exemption and Reduction Programs for Productive 
FIEs.
    3. Preferential Tax Programs for FIEs Recognized as High or New 
Technology Enterprises.
    4. Income Tax Reductions for Export-Oriented FIEs.

D. Indirect Tax and Tariff Exemption Programs

    1. Import Tariff and VAT Exemptions for FIEs and Certain Domestic 
Enterprises. Using Imported Equipment In Encouraged Industries.
    2. Deed Tax Exemption for SOEs Undergoing Mergers or Restructuring.
    3. Export Subsidies Characterized as ``VAT Rebates.''

E. Government Provision of Goods and Services for Less Than Adequate 
Remuneration (LTAR)

    1. Provision of Land to SOEs for LTAR.
    2. Provision of Land Use Rights Within Donghai Economic Development 
Zone.\19\
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    \19\ This program was alleged as ``Provision of Land Use Rights 
Within Designated Geographical Areas for Less Than Adequate 
Remuneration'' in the Petition (see page III-22).
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    3. Provision of Hot-Rolled Steel for LTAR.
    4. Provision of Electricity for LTAR.

F. Grant Programs

    1. State Key Technology Renovation Fund.
    2. Export Assistance Grants in Zhejiang Province.\20\
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    \20\ This program was alleged as ``Export Assistance Grants'' in 
the Petition (see page III-25).
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    3. GOC and Sub-Central Government Grants, Loans, and Other 
Incentives for Development of Famous Brands and China World Top Brands.
    For further information explaining why the Department is 
investigating these programs, see Initiation Checklist.
    We are not including in our investigation the following programs 
alleged to benefit producers and exporters of the subject merchandise 
in the PRC:

A. Subsidies to Steel Wheel Producers Located in Economic Development 
Zones

B. Privatization Related Subsidies to Zhengxing Wheel Group Co., Ltd.

    1. Debt Forgiveness.
    2. Non-Arm's Length Privatization.

C. Export Loans From Policy Banks and State-Owned Commercial Banks

D. Currency Manipulation

    For further information explaining why the Department is not 
investigating these programs, see Initiation Checklist.

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 and 19 CFR 
351.202(f), a copy of the public version of the Petition has been 
provided to the representatives of the GOC. Because of the particularly 
large number of producers/exporters identified in the Petition, the 
Department considers the service of the public version of the Petition 
to the foreign producers/exporters satisfied by the delivery of the 
public version to the GOC, consistent with 19 CFR 351.203(c)(2).

ITC Notification

    We have notified the ITC of our initiation, as required by section 
702(d) of the Act.

Preliminary Determination by the ITC

    The ITC will preliminarily determine, within 45 days after the date 
on which the Petition is filed, whether there is a reasonable 
indication that imports of subsidized steel wheels 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.

Notification to Interested Parties

    Interested parties must submit applications for disclosure under 
administrative protective orders in accordance with 19 CFR 351.305. On 
January 22, 2008, the Department published Antidumping and 
Countervailing Duty Proceedings: Documents Submission Procedures; APO 
Procedures 73 FR 3634. Parties wishing to participate in this 
investigation should ensure that they meet the requirements of these 
procedures (e.g., the filing of letters of appearance as discussed at 
19 CFR 351.103(d)).
    Any party submitting factual information in an antidumping duty or 
countervailing duty proceeding must certify to the accuracy and 
completeness of that information. See section 782(b) of the Act. 
Parties are hereby reminded that revised certification requirements are 
in effect for company/government officials as well as their 
representatives in all segments of any antidumping duty or 
countervailing duty proceedings initiated on or after March 14, 2011. 
See Certification of Factual Information to Import Administration 
During Antidumping and Countervailing Duty Proceedings: Interim Final 
Rule, 76 FR 7491 (February 10, 2011) (Interim Final Rule), amending 19 
CFR 351.303(g)(1) and (2). The formats for the revised certifications 
are provided at the end of the Interim Final Rule. The Department 
intends to reject factual submissions in any proceeding segments 
initiated on or after March 14, 2011, if the submitting

[[Page 23305]]

party does not comply with the revised certification requirements.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: April 19, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.

Attachment I

Scope of the Investigation

    The products covered by this investigation are steel wheels with a 
wheel diameter of 18 to 24.5 inches. Rims and discs for such wheels are 
included, whether imported as an assembly or separately. These products 
are used with both tubed and tubeless tires. Steel wheels, whether or 
not attached to tires or axles, are included. However, if the steel 
wheels are imported as an assembly attached to tires or axles, the tire 
or axle is not covered by the scope. The scope includes steel wheels, 
discs, and rims of carbon and/or alloy composition and clad wheels, 
discs, and rims when carbon or alloy steel represents more than fifty 
percent of the product by weight. The scope includes wheels, rims, and 
discs, whether coated or uncoated, regardless of the type of coating.
    Imports of the subject merchandise are provided for under the 
following categories of the Harmonized Tariff Schedule of the United 
States (HTSUS): 8708.70.05.00, 8708.70.25.00, 8708.70.45.30, and 
8708.70.60.30. These HTSUS numbers are provided for convenience and 
customs purposes only; the written description of the scope is 
dispositive.

[FR Doc. 2011-10078 Filed 4-25-11; 8:45 am]
BILLING CODE 3510-DS-P