[Federal Register Volume 76, Number 195 (Friday, October 7, 2011)]
[Notices]
[Pages 62364-62373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-26013]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-942]


Certain Kitchen Appliance Shelving and Racks From the People's 
Republic of China: Preliminary Results of the Countervailing Duty 
Administrative Review

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

SUMMARY: The Department of Commerce (``the Department'') is conducting 
an administrative review of the countervailable duty order on certain 
kitchen appliance shelving and racks (``Kitchen Racks'') from the 
People's Republic of China (``PRC''). The period of review (``POR'') is 
January 7, 2009, through December 31, 2009 (see further explanation in 
the ``Period of Review'' section of this notice). This review covers 
multiple exporters/producers, two of which are being individually 
reviewed as mandatory respondents. We preliminarily find that the 
mandatory respondents, Guangdong Wireking Housewares & Hardware Co., 
Ltd. (``Wireking'') and New King Shan (Zhu Hai) Co., Ltd. (``NKS''), 
received countervailable subsidies during the POR. Their countervailing 
duty (``CVD'') rates have been used to calculate the rate applied to 
the other firms subject to this review. If these preliminary results 
are adopted in our final results of review, we will instruct U.S. 
Customs and Border Protection (``CBP'') to assess countervailing duties 
as detailed in the ``Preliminary Results of Review'' section of this 
notice. Interested parties are invited to comment on these preliminary 
results.

DATES: Effective Date: October 7, 2011.

FOR FURTHER INFORMATION CONTACT: Alexander Montoro or Jennifer Meek, 
Office of 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) 482-0238 and (202) 482-2778, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On July 27, 2009, the Department published a CVD order on Kitchen 
Racks from the PRC. See Certain Kitchen Appliance Shelving and Racks 
From the People's Republic of China: Countervailing Duty Order, 74 FR 
46973 (September 14, 2009) (``CVD Order''). On September 1, 2010, we 
published a notice of ``Opportunity to Request Administrative Review'' 
for this CVD order. See Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 75 FR 53635, 53636 (September 1, 2010). On 
September 30, 2010, Nashville Wire Products Inc. and SSW Holding 
Company, Inc. (collectively ``Petitioners'') requested a review of ten 
companies. On October 28, 2010, we initiated a review of five of the 
companies: Wireking; NKS; Leader Metal Industry Co., Ltd. (aka Marmon 
Retail Services Asia) (``Leader Metal''); Hangzhou Dunli Import and 
Export Co., Ltd./Hangzhou Dunli Industry Co., Ltd. (``Dunli''); and 
Jiangsu Weixi Group Co. (``Jiangsu Weixi''). See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews, 75 FR 
66349, 66351 (October 28, 2010), as corrected by Initiation of 
Antidumping and Countervailing Duty Administrative Reviews; Correction, 
75 FR 69054 (November 10, 2010) (``Initiation Correction'').\1\ On 
November 29, 2010, after receiving further information from 
Petitioners, we initiated reviews of two additional companies requested 
by Petitioners: Asia Pacific CIS (Wuxi) Co., Ltd. (``Asia Pacific 
CIS'') and Hengtong Hardware Manufacturing (Huizhou) Co., Ltd. 
(``Hengtong''). See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, 75 FR 73036, 73038 (November 29, 2010).
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    \1\ The Department notes that only the POR for the antidumping 
duty administrative review was included in the November 10, 2010 
notice. See Initiation Correction, 75 FR at 69059. All notices 
concerning the administrative review of the countervailing duty 
order apply to the POR referenced in the initiation notices and this 
notice, generally January 7, 2009, through December 31, 2009 (see 
``Period of Review'' section below for further discussion).
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    In order to select mandatory respondents for this review, we issued 
questionnaires on December 3, 2010, to the seven companies covered by 
the review, requesting information about the quantity and value 
(``Q&V'') of subject merchandise exports made to the United States 
during the POR (``Q&V questionnaires''). As in the underlying 
investigation, we did not rely on CBP data for respondent selection 
because the Harmonized Tariff Schedule of the United States (``HTSUS'') 
categories that include subject merchandise are broad and contain 
products other than the subject merchandise. See Memorandum to Susan H. 
Kuhbach from Joseph Shuler, regarding ``Selection of Respondents for 
the Countervailing Duty Administrative Review of Certain Kitchen 
Appliance Shelving and Racks from the People's Republic of China''

[[Page 62365]]

(January 25, 2011) (``Respondent Selection Memorandum''). We received 
responses from five companies. We confirmed the delivery of the Q&V 
questionnaires to the two producers/exporters that did not respond, 
Asia Pacific CIS and Jiangsu Weixi. See Memorandum to the File from 
Joseph Shuler, regarding ``Delivery Confirmation of Quantity and Value 
Questionnaires'' (January 10, 2011) (``Delivery Confirmation Memo'').
    On January 25, 2011, we selected Wireking and NKS as mandatory 
respondents. See Respondent Selection Memorandum.
    On January 28, 2011, we issued CVD questionnaires to the Government 
of the PRC (``GOC''), Wireking, and NKS. On February 14, 2011, we 
issued a correction to the CVD questionnaire to Wireking and NKS. We 
received responses to our questionnaires from NKS on March 14, 2011 
(``NQR'') and from the GOC and Wireking on March 22, 2011 (``GQR'' and 
``WQR,'' respectively).
    On June 15, 2011, we issued supplemental CVD questionnaires to the 
GOC, Wireking, and NKS. We received a partial response from NKS on 
June, 29, 2011 (``NSQR1a'') and a response to the remaining portion of 
the supplemental CVD questionnaire on July 15, 2011. On July 13, 2011 
we received a response from Wireking (``WSQR1''), and on July 14, 2011, 
we received a response from the GOC (``GSQR1'').
    On April 8, 2011, Petitioners requested that the Department expand 
its CVD administrative review to include one additional (new) subsidy 
program. We initiated on this program on June 28, 2011. See Memorandum 
to Susan Kuhbach from Jennifer Meek and Patricia Tran, regarding 
``Countervailing Duty Administrative Review of Certain Kitchen 
Appliance Shelving and Racks from the People's Republic of China: 
Initiation of New Subsidy Allegation'' (June 28, 2011). On July 1, 
2011, we issued a questionnaire regarding the new subsidy allegation 
(``NSA'') to the GOC, Wireking, and NKS. On July 15, 2011, we received 
responses from the GOC and Wireking regarding the NSA questionnaire, 
and on July 18, 2011, we received a response to the NSA questionnaire 
from NKS (``NNSAQR'').
    On August 12, 2011, we issued second supplemental questionnaires to 
the GOC, Wireking, and NKS. On August 19, 2011, we received a response 
from the GOC and NKS (``GSQR2'' and ``NSQR2,'' respectively). We 
received Wireking's response on August 26, 2011 (``WSQR2''). On August 
26, 2011, we issued a third supplemental questionnaire to the GOC. We 
received a response from the GOC on September 2, 2011. On September 19, 
2011, we issued a third supplemental questionnaire to NKS. We received 
a response from NKS on September 23, 2011.
    On May 13, 2011, we extended the deadline for the preliminary 
results until September 30, 2011. See Certain Kitchen Shelving and 
Racks From the People's Republic of China: Extension of Time Limit for 
Preliminary Results of Countervailing Duty Administrative Review, 76 FR 
27990 (May 13, 2011).

Scope of the Order

    The scope of the order consists of shelving and racks for 
refrigerators, freezers, combined refrigerator-freezers, other 
refrigerating or freezing equipment, cooking stoves, ranges, and ovens. 
Certain kitchen appliance shelving and racks are defined as shelving, 
baskets, racks (with or without extension slides, which are carbon or 
stainless steel hardware devices that are connected to shelving, 
baskets, or racks to enable sliding), side racks (which are welded wire 
support structures for oven racks that attach to the interior walls of 
an oven cavity that does not include support ribs as a design feature), 
and sub-frames (which are welded wire support structures that interface 
with formed support ribs inside an oven cavity to support oven rack 
assemblies utilizing extension slides) with the following dimensions:
     Shelving and racks with dimensions ranging from 3 inches 
by 5 inches by 0.10 inch to 28 inches by 34 inches by 6 inches; or
     Baskets with dimensions ranging from 2 inches by 4 inches 
by 3 inches to 28 inches by 34 inches by 16 inches; or
     Side racks from 6 inches by 8 inches by 0.10 inch to 16 
inches by 30 inches by 4 inches; or
     Sub-frames from 6 inches by 10 inches by 0.10 inch to 28 
inches by 34 inches by 6 inches.
    The subject merchandise is comprised of carbon or stainless steel 
wire ranging in thickness from 0.050 inch to 0.500 inch and may include 
sheet metal of either carbon or stainless steel ranging in thickness 
from 0.020 inch to 0.20 inch. The subject merchandise may be coated or 
uncoated and may be formed and/or welded. Excluded from the scope of 
the order is shelving in which the support surface is glass.
    The merchandise subject to the order is currently classifiable in 
the HTSUS statistical reporting numbers 8418.99.80.50, 7321.90.50.00, 
7321.90.60.40, 7321.90.60.90, 8418.99.80.60, 8419.90.95.20, 
8516.90.80.00, and 8516.90.80.10. Although the HTSUS subheadings are 
provided for convenience and customs purposes, the written description 
of the scope of the order is dispositive.

Period of Review

    We are conducting our analysis in this review on an annual basis, 
i.e., for the entire calendar year 2009. However, the duties calculated 
will be applied as follows: for refrigeration shelving duties will be 
applied to entries from January 7, 2009 through May 6, 2009, and 
September 9, 2009, through December 31, 2009; for oven racks duties 
will apply to entries from September 9, 2009, through December 31, 
2009.\2\
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    \2\ Entries of certain refrigeration shelving occurring during 
the period May 7, 2009, through September 8, 2009, were not 
suspended for CVD purposes due to the termination of provisional 
measures. Entries of certain oven racks occurring before September 
9, 2009, were liquidated at the time of the CVD order because the 
International Trade Commission (``ITC'') found threat of material 
injury on certain oven racks. See CVD Order, 74 FR at 46974-75.
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Use of Facts Otherwise Available and Adverse Inferences

    Sections 776(a)(1) and (2) of the Tariff Act of 1930, as amended 
(``the Act''), provide that the Department shall apply ``facts 
otherwise available'' if necessary information is not on the record or 
if 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.
    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.

1. Non-Cooperative Companies

    As explained in the ``Background'' section above, two companies in 
this review, Asia Pacific CIS and Jiangsu Weixi, did not provide a 
response to the Department's Q&V questionnaire issued during the 
respondent selection process. We confirmed the delivery of the Q&V 
questionnaires to these companies. See Delivery Confirmation Memo. 
Accordingly, we determine that these non-cooperating companies withheld 
requested information and significantly impeded this proceeding. 
Specifically, by not responding to requests for

[[Page 62366]]

information concerning the Q&V of their sales, the companies impeded 
the Department's ability to select the most appropriate respondents in 
this review. Thus, we are basing the CVD rate for these non-cooperating 
companies on facts otherwise available, pursuant to sections 
776(a)(2)(A) and (C) of the Act.
    We further preliminarily determine that an adverse inference is 
warranted, pursuant to section 776(b) of the Act. By failing to submit 
responses to the Department's Q&V questionnaire, these companies did 
not cooperate to the best of their ability in this review. Accordingly, 
we preliminarily find that an adverse inference is warranted to ensure 
that the non-cooperating companies will not obtain a more favorable 
result than had they fully complied with our request for information.
    In deciding which facts to use as adverse facts available 
(``AFA''), section 776(b) of the Act and 19 CFR 351.308(c)(1) and (2) 
authorize the Department to rely on information derived from: (1) The 
petition; (2) a final determination in the investigation; (3) any 
previous review or determination; or (4) any other information placed 
on the record. The Department's practice when selecting an adverse rate 
from among the possible sources of information is to ensure that the 
rate is sufficiently adverse ``as to effectuate the statutory purposes 
of the adverse facts available rule to induce respondents to provide 
the Department with complete and accurate information in a timely 
manner.'' See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value: Static Random Access Memory Semiconductors From 
Taiwan, 63 FR 8909, 8932 (February 23, 1998). The Department's practice 
also ensures ``that the party does not obtain a more favorable result 
by failing to cooperate than if it had cooperated fully.'' See 
Statement of Administrative Action (``SAA'') accompanying the Uruguay 
Round Agreements Act, H.R. Rep. No. 103-316, Vol. I, at 870 (1994), 
reprinted at 1994 U.S.C.C.A.N. 4040, 4199.
    In applying AFA for these non-cooperative companies, we are guided 
by the Department's approach in recent CVD investigations and reviews. 
See, e.g., Aluminum Extrusions From the People's Republic of China: 
Final Affirmative Countervailing Duty Determination, 76 FR 18521 (April 
4, 2011) (``Aluminum Extrusions from the PRC''), and accompanying 
Issues and Decision Memorandum (``Aluminum Extrusions from the PRC 
Decision Memorandum'') at ``Application of Adverse Inferences: Non-
Cooperative Companies'' section;\3\ Circular Welded Austenitic 
Stainless Pressure Pipe from the People's Republic of China: Final 
Affirmative Countervailing Duty Determination, 74 FR 4936 (January 28, 
2009), and accompanying Issues and Decision Memorandum at ``Application 
of Facts Available and Use of Adverse Inferences'' section; and Certain 
Hot-Rolled Carbon Steel Flat Products from India: Final Results and 
Partial Rescission of Countervailing Duty Administrative Review, 74 FR 
20923 (May 6, 2009), and accompanying Issues and Decision Memorandum at 
``SGOC Industrial Policy 2004-2009'' section. Under this practice, the 
Department computes the total AFA rate for non-cooperating companies 
generally using program-specific rates calculated for the cooperating 
respondents in the instant review or prior reviews of instant case, or 
calculated in prior CVD cases involving the country under review (in 
the instant case, the PRC).
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    \3\ In the underlying investigation, the Department excluded 
from its AFA calculation for non-cooperative Q&V companies sub-
national programs alleged after respondent selection. See Certain 
Kitchen Shelving and Racks from the People's Republic of China: 
Final Affirmative Countervailing Duty Determination, 74 FR 37012 
(July 27, 2009), and accompanying Issues and Decision Memorandum 
(``Kitchen Racks Decision Memorandum'') at 5. Consistent with 
Aluminum Extrusions from the PRC, we determine it appropriate to now 
include newly alleged and self-reported programs in the AFA 
calculation for non-cooperative respondents, including non-
cooperative Q&V companies. See Aluminum Extrusions from the PRC 
Decision Memorandum at Comment 8. We find that this approach 
prevents non-cooperative respondents from successfully avoiding 
being associated with newly alleged subsidy programs and subsidies 
discovered during the course of the investigation or review.
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    In these preliminary results, for the income tax rate reduction or 
exemption programs, we are applying an adverse inference that the non-
cooperating companies paid no income taxes during 2009. For programs 
other than those involving income tax rate reduction or exemption 
programs, we have first sought to apply, where available, the highest, 
above de minimis subsidy rate calculated for an identical program from 
any segment of this proceeding. Absent such a rate, we have applied, 
where available, the highest, above de minimis subsidy rate calculated 
for a similar program from any segment of this proceeding. Absent an 
above de minimis subsidy rate calculated for the same or similar 
program in this proceeding, we have applied the highest non-de minimis 
rate calculated for the same or similar program (based on treatment of 
the benefit) in another PRC CVD proceeding. Absent an above de minimis 
subsidy rate calculated for the same or similar program in any PRC CVD 
proceeding, we applied the highest calculated subsidy rate for any 
program otherwise listed from any prior PRC CVD cases, so long as the 
non-cooperating companies conceivably could have used the program for 
which the rate was calculated. See Aluminum Extrusions from the PRC 
Decision Memorandum at ``Application of Adverse Inferences: Non-
Cooperative Companies'' section; see also Lightweight Thermal Paper 
From the People's Republic of China: Final Affirmative Countervailing 
Duty Determination, 73 FR 57323 (October 2, 2008), and accompanying 
Issues and Decision Memorandum at ``Selection of the Adverse Facts 
Available Rate'' section. On this basis, we preliminarily determine the 
AFA subsidy rate for Asia Pacific CIS and Jiangsu Weixi to be 239.33 
percent ad valorem.
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation or review, it shall, to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at its disposal. Secondary information is ``information 
derived from the petition that gave rise to the investigation or 
review, the final determination concerning the subject merchandise, or 
any previous review under section 751 concerning the subject 
merchandise.'' See SAA at 870. The Department considers information to 
be corroborated if it has probative value. Id. To corroborate secondary 
information, the Department will, to the extent practicable, examine 
the reliability and relevance of the information to be used. The SAA 
emphasizes, however, that the Department need not prove that the 
selected facts available are the best alternative information. Id. at 
869.
    With regard to the reliability aspect of corroboration, we note 
that the rates were calculated in this review or in recent final CVD 
determinations. Further, the calculated rates were based upon 
information about the same or similar programs. Moreover, no 
information has been presented that calls into question the reliability 
of these calculated rates that we are applying as AFA. Finally, unlike 
other types of information, such as publicly available data on the 
national inflation rate of a given country or national average interest 
rates, there typically are no independent sources for data on company-
specific benefits resulting from countervailable subsidy programs.
    With respect to the relevance aspect of corroborating the rates 
selected, the Department will consider information

[[Page 62367]]

reasonably at its disposal in considering the relevance of information 
used to calculate a countervailable subsidy benefit. Where 
circumstances indicate that the information is not appropriate as AFA, 
the Department will not use it. See Fresh Cut Flowers From Mexico; 
Final Results of Antidumping Duty Administrative Review, 61 FR 6812, 
6814 (February 22, 1996).
    In the absence of record evidence concerning these programs due to 
the non-cooperative Q&V companies' decision not to participate in the 
review, we have reviewed the information concerning PRC subsidy 
programs in this and other cases. For those programs for which the 
Department has found a program-type match, we find that, because these 
are the same or similar programs, they are relevant to the programs of 
this case. For the programs for which there is no program-type match, 
we have selected the highest calculated subsidy rate for any PRC 
program from which the non-cooperative Q&V companies could receive a 
benefit to use as AFA. The relevance of these rates is that they are 
actual calculated CVD rates for a PRC program from which the non-
cooperative Q&V companies could actually receive a benefit. Further, 
these rates were calculated for periods close to the POR in the instant 
case. Moreover, the failure of these companies to respond to requests 
for information has ``resulted in an egregious lack of evidence on the 
record to suggest an alternative rate.'' Shanghai Taoen Int'l Trading 
Co., Ltd. v. United States, 360 F. Supp. 2d 1339, 1348 (Ct. Int'l Trade 
2005). Due to the lack of participation by the non-cooperative Q&V 
companies and the resulting lack of record information concerning their 
use of programs under review, the Department has corroborated the rates 
it selected to the extent practicable.
    For a detailed discussion of the AFA rates selected for each 
program under review, see Memorandum to the File from Jennifer Meek and 
Alexander Montoro, regarding ``Application of Adverse Facts Available 
Rates for Preliminary Results'' (September 30, 2011).

2. GOC--Wire Rod

    The Department sought information from the GOC about the producers 
of the wire rod purchased by Wireking and NKS. In particular, for any 
of the wire rod producers that are not majority-owned by the GOC, the 
GOC was asked, inter alia, to trace back the ownership to the ultimate 
individual or state owners. See the Department's January 28, 2011 
questionnaire at Section II/Appendix 3. The GOC provided information 
indicating that several wire rod producers were owned in whole or in 
part by other companies, but failed to provide the ownership of those 
other companies. For one wire rod producer, the GOC failed to provide 
any ownership information.
    We preliminarily determine that the GOC has withheld necessary 
information that was requested of it and, thus, that the Department may 
rely on ``facts available'' in making our preliminary determination. 
See sections 776(a)(1) and (a)(2)(A) of the Act. Moreover, we 
preliminarily determine that the GOC has failed to cooperate by not 
acting to the best of its ability to comply with our request for 
information. Consequently, an adverse inference is warranted in the 
application of facts available. See section 776(b) of the Act. We are 
applying the adverse inference that the producers of wire rod used by 
Wireking and NKS are government authorities that provided a financial 
contribution as described under section 771(5)(D)(iv) of the Act.

Subsidies Valuation Information

Allocation Period

    The average useful life period in this proceeding, as described in 
19 CFR 351.524(d)(2), is 12 years according to the U.S. Internal 
Revenue Service's 1977 Class Life Asset Depreciation Range System, as 
revised. See U.S. Internal Revenue Service Publication 946 (2008), How 
to Depreciate Property, at Table B-2: Table of Class Lives and Recovery 
Periods. No party in this proceeding has disputed this allocation 
period.

Attribution of Subsidies

    The Department's regulations at 19 CFR 351.525(b)(6)(i) state that 
the Department will normally attribute a subsidy to the products 
produced by the corporation that received the subsidy. However, 19 CFR 
351.525(b)(6)(ii)-(v) directs that the Department will attribute 
subsidies received by certain other companies to the combined sales of 
the recipient and other companies if: (1) Cross-ownership exists 
between the companies; and (2) the cross-owned companies produce the 
subject merchandise, are a holding or parent company of the subject 
company, produce an input that is primarily dedicated to the production 
of the downstream product, or transfer a subsidy to a cross-owned 
company.
    According to 19 CFR 351.525(b)(6)(vi), cross-ownership exists 
between two or more corporations where one corporation can use or 
direct the individual assets of the other corporation(s) in essentially 
the same ways it can use its own assets. This section of the 
Department's regulations states that this standard will normally be met 
where there is a majority voting ownership interest between two 
corporations or through common ownership of two (or more) corporations. 
The Preamble to the Department's regulations further clarifies the 
Department's cross-ownership standard. According to the Preamble, 
relationships captured by the cross-ownership definition include those 
where

the interests of two corporations have merged to such a degree that 
one corporation can use or direct the individual assets (or subsidy 
benefits) of the other corporation in essentially the same way it 
can use its own assets (or subsidy benefits) * * * Cross-ownership 
does not require one corporation to own 100 percent of the other 
corporation. Normally, cross-ownership will exist where there is a 
majority voting ownership interest between two corporations or 
through common ownership of two (or more) corporations. In certain 
circumstances, a large minority voting interest (for example, 40 
percent) or a ``golden share'' may also result in cross-ownership.

See Countervailing Duties; Final Rule, 63 FR 65348, 65401 (November 25, 
1998).

    Thus, the Department's regulations make clear that the agency must 
look at the facts presented in each case in determining whether cross-
ownership exists.
    The U.S. Court of International Trade (``CIT'') has upheld the 
Department's authority to attribute subsidies based on whether a 
company could use or direct the subsidy benefits of another company in 
essentially the same way it could use its own subsidy benefits. See 
Fabrique de Fer de Charleroi, SA v. United States, 166 F. Supp. 2d 593, 
600-604 (CIT 2001).
    Wireking stated that it is a wholly foreign-owned company, with its 
parent companies located outside of the PRC. Wireking also responded 
that it has no affiliates that are cross-owned within the meaning of 19 
CFR 351.525(b)(6). See WQR at 4-5. Therefore, we are limiting our 
analysis to Wireking.
    NKS also stated that it is wholly owned by entities located outside 
of the PRC. NKS identified several affiliated companies and reported 
that none of them are located in the PRC. See NQR at 3-5. Therefore, we 
are limiting our analysis to NKS.

[[Page 62368]]

Analysis of Programs

    Based upon our analysis and the responses to our questionnaires, we 
determine the following:

I. Programs Preliminarily Determined To Be Countervailable

A. Two Free, Three Half Program

    Under Article 8 of the FIE Tax Law, a foreign-invested enterprise 
(``FIE'') that is ``productive'' and is scheduled to operate for more 
than ten years may be exempted from income tax in the first two years 
of profitability and pay income taxes at half the standard rate for the 
subsequent three years. See GQR at 23. The GOC claims that the ``Two 
Free, Three Half'' program was terminated effective January 1, 2008, by 
the Enterprise Income Tax Law but companies already enjoying the 
preference were permitted to continue. See GQR at 23-24 and Exhibits 1, 
3 and 4.
    The Department has previously found this program countervailable. 
See CFS Decision Memorandum at 11-12; see also Certain Seamless Carbon 
and Alloy Steel Standard, Line, and Pressure Pipe from the People's 
Republic of China: Final Affirmative Countervailing Duty Determination, 
Final Affirmative Critical Circumstances Determination, 75 FR 57444 
(September 21, 2010), and accompanying Issues and Decision Memorandum 
at 25.
    NKS reported that it used this program during 2009. See NQR at 12.
    We preliminarily determine that the exemption or reduction of the 
income tax paid by productive FIEs under this program confers a 
countervailable subsidy. The exemption/reduction is a financial 
contribution in the form of revenue forgone by the GOC, and it provides 
a benefit to the recipient in the amount of the tax savings. See 
section 771(5)(D)(ii) of the Act and 19 CFR 351.509(a)(1). We also 
preliminarily determine that the exemption/reduction afforded by this 
program is limited as a matter of law to certain enterprises, i.e., 
``productive'' FIEs and, hence, is specific under section 771(5A)(D)(i) 
of the Act.
    To calculate the benefit, we treated the income tax savings 
received by NKS as a recurring benefit, consistent with 19 CFR 
351.524(c)(1). To compute the amount of the tax savings, we compared 
the income tax that NKS would have paid in the absence of the program 
with the income tax that NKS actually paid during 2009.
    We divided the benefits received in 2009 by NKS's 2009 total sales, 
in accordance with 19 CFR 351.525(b)(6)(i). On this basis, we 
preliminarily determine that NKS received a countervailable subsidy of 
1.00 percent ad valorem under this program.

B. Income Tax Reduction for FIEs Based on Geographic Location

    To promote economic development and attract foreign investment, 
``productive'' FIEs located in coastal economic zones, special economic 
zones or economic and technical development zones in the PRC were 
subject to preferential tax rates of 15 percent or 24 percent, 
depending on the zone. See GQR at 5. This program was created on June 
15, 1988, pursuant to the Provisional Rules on Exemption and Reduction 
of Corporate Income Tax and Business Tax of FIEs in Coastal Economic 
Development Zone issued by the Ministry of Finance, and continued under 
Article 7 of the FIE Tax Law on July 1, 1991. See GQR at Exhibit 3.
    As a result of the transition provisions of the new Enterprise 
Income Tax Law, which came into force on January 1, 2008, enterprises 
that were eligible for the reduced rates of 15 percent or 24 percent 
are to be gradually transitioned to the uniform rate of 25 percent over 
a five-year period. See GQR at 6 and Exhibit 2.
    In the underlying investigation, we determined that this program 
conferred a countervailable benefit. See Kitchen Racks Decision 
Memorandum at 11-12. No interested party provided new evidence that 
would lead us to reconsider our earlier finding.  See, e.g., Live Swine 
from Canada; Final Results of Countervailing Duty Administrative 
Reviews, 61 FR 52408, 52420 (October 7, 1996) (``{I{time} t is the 
Department's policy not to re-examine the issue of that program's 
countervailability in subsequent reviews unless new information or 
evidence of changed circumstances is submitted which warrants 
reconsideration.''). Therefore, we continue to find that these tax 
benefits confer a countervailable subsidy.
    NKS reported paying a reduced income tax rate during the POR under 
the program. See NQR at 10-11.
    To calculate the benefit, we treated the income tax savings 
received by NKS as a recurring benefit, consistent with 19 CFR 
351.524(c)(1). To compute the amount of the tax savings, we compared 
the income tax NKS would have paid in the absence of the program (i.e., 
at the 25 percent rate) with the income tax that NKS actually paid 
during the 2009 (i.e., at the reduced rate).
    We divided the benefits received by NKS in 2009 by its 2009 total 
sales, in accordance with 19 CFR 351.525(b)(6)(i). On this basis, we 
preliminarily determine that NKS received a countervailable subsidy of 
0.77 percent ad valorem under this program.

C. Exemption From City Maintenance and Construction Taxes and Education 
Fee Surcharges for FIEs in Guangdong Province

    Pursuant to the Circular on Temporarily Not Collecting City 
Maintenance and Construction Tax and Education Fee Surcharge for FIEs 
and Foreign Enterprises (GUOSHUIFA {1994{time}  No. 38), the local tax 
authorities exempt all FIEs and foreign enterprises from the city 
maintenance and construction tax and the education fee surcharge. See 
GQR at 10 at Exhibit 6 and KASR Decision Memorandum at 7.
    In the underlying investigation, we determined that this program 
conferred a countervailable benefit, where this program was referred to 
as ``Exemption from City Construction Tax and Education Tax for FIEs in 
Guangdong Province.'' See Kitchen Racks Decision Memorandum at 13. No 
interested party provided new evidence that would lead us to reconsider 
our earlier finding. Therefore, we continue to find that these tax 
exemptions confer a countervailable subsidy.
    Both NKS and Wireking stated they have never paid the City 
Maintenance and Construction Taxes or Education Fee Surcharges. See WQR 
at 10 and NKS at 11. These taxes are calculated as a percentage of the 
value added tax (``VAT'') and business and consumption taxes paid by 
enterprises. Wireking reported the amount it would have paid during the 
POR had it been subject to the City Maintenance and Construction Taxes 
or Education Fee Surcharges. See WSQR1 at 5. NKS states it did not pay 
any VAT, business or consumption tax and therefore, would not have paid 
this tax even if had not been exempted under this program. See NKSQR3 
at 1.
    To calculate the benefit, we treated Wireking's tax savings as a 
recurring benefit, consistent with 19 CFR 351.524(c)(1), and divided 
the company's savings received during 2009 by the company's total 2009 
sales. To compute the amount of the city maintenance and construction 
tax savings, we compared what Wireking would have paid in the absence 
of the program (seven percent of the total of VAT, business tax, and 
consumption tax paid during 2009) with what it paid (zero). To 
calculate the amount of the savings from the educational fee surcharge 
exemption, we compared what Wireking would have paid in the absence of 
the program (three percent of

[[Page 62369]]

total of VAT, business tax, and consumption tax paid during 2009) with 
what it paid (zero). Id. On this basis, we preliminarily determine the 
countervailable subsidy to be 0.54 percent ad valorem for Wireking.

D. Shunde Famous Brands

    According to the GOC, this program was established in June 2003 and 
was terminated in December 2008. The purpose of this program was to 
increase the popularity and competitiveness of the product brands and, 
to be eligible for awards, an enterprise must have been designated as a 
``Famous Trademark of China,'' ``Chinese Famous Product,'' ``Famous 
Trademark of Guangdong province,'' or ``Guangdong Famous Product.'' See 
GSQR1 at 12-13 and Exhibit 4. The GOC stated that the government 
authority responsible for administering this program was the Shunde 
Economic and Trade Bureau (currently known as Shunde Economic Promotion 
Bureau). Id.; see also GSQR2 at Exhibit 1.
    Wireking was approved for a grant under this program in 2008 and 
received these funds in 2009. See GSQR2 at Exhibit 1 and WQR at 13.
    We preliminarily determine that Wireking received a countervailable 
subsidy during the POR under this program. We find the grant to be a 
direct transfer of funds within the meaning of section 771(5)(D)(i) of 
the Act, providing a benefit in the amount of the grant. See 19 CFR 
351.504(a). Based on information provided on the record, we further 
preliminarily determine that grants under this program are de facto 
specific based on the limited number of users. See section 
771(5A)(D)(iii)(I) of the Act. See also GSQR2 at Exhibit 1.
    To calculate the countervailable subsidy, we used our standard 
methodology for non-recurring grants. See 19 CFR 351.524(b). As 
Wireking was approved for the funds in 2008 and received payment in 
2009, we first applied the ``0.5 percent test,'' pursuant to 19 CFR 
351.524(b)(2) using Wireking's 2008 total sales. The grant amount was 
less than 0.5 percent of Wireking's 2008 total sales. Thus, in 
accordance with 19 CFR 351.524(b)(2), we expensed the entire amount of 
the grant and attributed the benefit to Wireking's total sales in the 
year of receipt (i.e., 2009). On this basis, we preliminarily find a 
countervailable subsidy of 0.10 percent ad valorem for Wireking.

E. International Market Exploration Fund

    The GOC confirmed that the International Market Exploration Fund 
program under which Wireking received assistance in 2009 is the same 
program as the ``International Market Development Fund Grants for Small 
and Medium Sized Enterprises'' program (also known as ``SME Fund'', 
``Medium & Small Size Enterprise International Market Expansion 
Assistance'' program or ``International Exhibition Show Assistance'' 
program) previously investigated by the Department and found 
countervailable; inter alia, in Aluminum Extrusions from the PRC. See 
the Department's August 12, 2011, GOC second supplemental questionnaire 
at Attachment 1 and GSQR2 at 2.
    Wireking reported receiving funds under this program in 2009. See 
WQR at 13.
    We preliminarily determine that Wireking received a countervailable 
subsidy during the POR under this program. We find the grant to be a 
direct transfer of funds within the meaning of section 771(5)(D)(i) of 
the Act, providing a benefit in the amount of the grant. See 19 CFR 
351.504(a). Further, we find the grant to be specific under section 
771(5A)(B) of the Act because receipt of the grant is contingent upon 
export performance.
    To calculate the countervailable subsidy, we used our standard 
methodology for non-recurring grants. See 19 CFR 351.524(b). Treating 
the year of receipt as the year of approval, we applied the ``0.5 
percent test,'' pursuant to 19 CFR 351.524(b)(2). The 2009 grant amount 
was less than 0.5 percent of Wireking's 2009 export sales. Thus, in 
accordance with 19 CFR 351.524(b)(2), we expensed the entire amount of 
the grant to 2009 and attributed the benefit to Wireking's 2009 export 
sales. On this basis, we preliminarily find a countervailable subsidy 
of 0.02 percent ad valorem for Wireking.

F. Foshan Shunde Export Rebate

    Wireking reported that it received a grant but was unable to 
identify the program under which it was given. See WSQR1 at 4. Wireking 
claims the only information it has regarding this grant is what is 
listed on the receipt from a local finance bureau. See WSQR2 at 2-3. 
Wireking also states it has been unable to gather more information from 
the local finance bureau that distributed the funds. Based on the 
information it has, Wireking believes the grant was related to exports. 
We will continue to gather information regarding this program for the 
final results.
    Based on the translated information provided by Wireking regarding 
the receipt of this grant, we preliminarily find that the grant under 
this program conferred a countervailable subsidy. We find the grant to 
be a direct transfer of funds within the meaning of section 
771(5)(D)(i) of the Act, providing a benefit in the amount of the 
grant. See 19 CFR 351.504(a). Further, we find the grant to be specific 
under section 771(5A)(B) of the Act because receipt of the grant is 
contingent upon export performance.
    To calculate the countervailable subsidy, we used our standard 
methodology for non-recurring grants. See 19 CFR 351.524(b). As the 
approval date is unknown, we are treating the year of receipt, 2009, as 
the year of approval as facts available under section 776(a)(1) of the 
Act. We applied the ``0.5 percent test,'' pursuant to 19 CFR 
351.524(b)(2). The grant amount was less than 0.5 percent of Wireking's 
2009 export sales. Thus, in accordance with 19 CFR 351.524(b)(2), we 
expensed the entire amount of the grant to 2009 and attributed the 
benefit to Wireking's 2009 export sales. On this basis, we 
preliminarily determine the countervailable subsidy attributable to 
Wireking to be 0.06 percent ad valorem under this program.

G. Zhuhai Export Trade Grant

    According to the GOC, the Zhuhai Export Trade Grant program was 
established pursuant to ZWJM (2009) No. 28 and came into effect in 
November 2008. The purpose of the program is to maintain the stable 
development of international trade. See GSQR1 at 39-44 and Exhibit 9. 
The GOC stated that the government authorities responsible for 
approving and administering the program are the Zhuhai Foreign Economic 
and Trade Corporation Bureau and the Zhuhai Finance Department. See 
GSQR1 at 39 and Exhibit SGQ-9. To be eligible for assistance under this 
program, a company must be registered in the Department of Industry and 
Commerce of Zhuhai City, must not have committed a significant unlawful 
act or behaved illegally in the last two years, must have exported at 
least USD 1 million in 2008 and 2009, and must have increased its 
exports in 2009 over 2008. See GSQR1 at 43.
    NKS reported that it received a grant under this program during 
2009. See NSQR1a at 3.
    We preliminarily determine that NKS received a countervailable 
subsidy during the POR under this program. We find the grant to be a 
direct transfer of funds within the meaning of section 771(5)(D)(i) of 
the Act, providing a benefit in the amount of the grant. See 19 CFR 
351.504(a). Further, we find the grant to be specific under section

[[Page 62370]]

771(5A)(B) of the Act, because receipt of the grant is contingent upon 
export performance.
    To calculate the countervailable subsidy, we used our standard 
methodology for non-recurring grants. See 19 CFR 351.524(b). As NKS was 
approved for the funds in 2009, we applied the ``0.5 percent test,'' 
pursuant to 19 CFR 351.524(b)(2) using NKS's 2009 total export sales. 
The 2009 grant amount was less than 0.5 percent of NKS's 2009 total 
export sales. Thus, in accordance with 19 CFR 351.524(b)(2), we 
expensed the entire amount of the grant to 2009. In accordance with 19 
CFR 351.525(b)(2), we attributed the benefit to NKS's 2009 total export 
sales. On this basis, we preliminarily find a countervailable subsidy 
of 0.02 percent ad valorem for NKS.

H. Guangdong Supporting Fund

    According the GOC, the Guangdong Supporting Fund program was 
established in 2009 with the purpose of helping enterprises affected by 
the economic crisis and maintaining employment. The GOC stated that the 
government authorities responsible for administering the program are 
the Guangdong Labor and Social Security Department, the Guangdong 
Financial Department and the local tax bureau. See GSQR1 at Exhibit 11. 
The Zhuhai Human Resource and Social Security Bureau is responsible for 
disbursing payments from the fund. See GSQR1 at 45. To be eligible, a 
company should be among the industries affected heavily by the 
financial crisis or the company must be in difficult position. See 
GSQR1 at 47. The GOC provided Yuelaoshefa (2009) No. 6, which defines 
``enterprises in difficulty'' as enterprises in the ``Clothing, 
textile, toys, printing, packing, electronics, house appliance, 
hardware and plastics, and furniture business which have been 
significantly influenced by the international financial crisis * * * 
and have passed the identification of enterprises in difficulty.'' See 
GSQR1 at Exhibit 11.
    NKS reported that it received a benefit during 2009. See NSQR1a at 
3. According to the GOC, NKS received funding from the ``enterprise in 
a difficult position fund.'' See GSQR2 at 3.
    We preliminarily determine that NKS received a countervailable 
subsidy during the POR under this program. We find the grant to be a 
direct transfer of funds within the meaning of section 771(5)(D)(i) of 
the Act, providing a benefit in the amount of the grant. See 19 CFR 
351.504(a). We further determine preliminarily that grants under this 
program are limited to specific industries (i.e., enterprises in 
difficulty such as clothing, textile, toys, printing, packing, 
electronics, house appliance, hardware and plastics, and furniture 
business). Hence, the grants are de jure specific under section 
771(5A)(D)(i) of the Act.
    To calculate the countervailable subsidy, we used our standard 
methodology for non-recurring grants. See 19 CFR 351.524(b). We applied 
the ``0.5 percent test,'' pursuant to 19 CFR 351.524(b)(2) using NKS's 
2009 total sales. The 2009 grant amount was less than 0.5 percent of 
NKS's 2009 total sales. Thus, in accordance with 19 CFR 351.524(b)(2), 
we expensed the entire amount of the grant to 2009 and attributed the 
benefit to NKS's 2009 total sales. On this basis, we preliminarily find 
a countervailable subsidy of 0.06 percent ad valorem for NKS.

I. Provision of Wire Rod for Less Than Adequate Remuneration (``LTAR'')

    In the underlying investigation, we determined that this program 
conferred a countervailable subsidy. See Kitchen Racks Decision 
Memorandum at 14-16. No interested party provided new evidence that 
would lead us to reconsider our earlier findings that the GOC's 
predominant role in the PRC's wire rod market renders domestic prices 
unusable as benchmarks or that the subsidy conferred is specific. See 
Kitchen Racks Decision Memorandum at 15-16. Therefore, our analysis 
focuses on whether the producers of the wire rod used by Wireking and 
NKS during the POR were authorities within the meaning of section 
771(5)(B) of the Act and the extent of the benefit provided.
    As discussed in the ``Use of Facts Otherwise Available and Adverse 
Inferences'' section, above, we preliminarily determine that the wire 
rod producers for whom the GOC did not provide complete ownership 
information are authorities. For one wire rod producer, the ownership 
information submitted by the GOC indicates majority state ownership. In 
tires from the PRC, the Department determined that majority government 
ownership of an input producer is sufficient to qualify it as an 
``authority.'' See Certain New Pneumatic Off-the-Road Tires From the 
People's Republic of China: Final Affirmative Countervailing Duty 
Determination and Final Negative Determination of Critical 
Circumstances, 73 FR 40480 (July 15, 2008) and accompanying Issues and 
Decision Memorandum at 10. Thus, we preliminarily determine this 
supplier is an authority. For the final wire rod producer, which is 
owned by individuals, the GOC has submitted incomplete information. 
Consistent with section 782(d) of the Act, we intend to seek further 
information. See ``Programs for Which More Information is Required'' 
section of this notice, below. For these preliminary results, however, 
as we are still gathering information on this wire rod producer, we are 
not including purchases of wire rod produced by this company in the 
calculation. Based on our findings that certain wire rod producers are 
authorities, we preliminarily determine that the GOC is providing a 
good and, hence, a financial contribution under section 771(5)(D)(iii) 
of the Act.
    To determine whether this financial contribution results in a 
subsidy to the Kitchen Racks producers, we followed 19 CFR 
351.511(a)(2) for identifying an appropriate market-based benchmark for 
measuring the adequacy of the remuneration for the wire rod. As in the 
underlying investigation, we have relied upon tier two benchmarks, 
i.e., world market prices available to purchasers in the PRC, to 
determine the existence and extent of the benefit to Wireking and NKS. 
See Kitchen Racks Decision Memorandum at 8. Petitioners submitted U.S. 
domestic prices for wire rod, but we have not included these in our 
benchmark because they do not represent world market prices available 
to purchasers in the PRC. Instead, we have used the Steel Business 
Briefing export prices for wire from Turkey, Black Sea, and Latin 
America which were submitted by Wireking. See Wireking's Comments on 
Benchmarking, June 15, 2011, and Memorandum to the File, regarding 
``Wire Rod Benchmark Prices'' (September 30, 2011). This is consistent 
with the Department's use of data from industry publications such as 
the Steel Business Briefing in other recent CVD proceedings involving 
the PRC. See, e.g., Wire Decking From the People's Republic of China: 
Final Affirmative Countervailing Duty Determination, 75 FR 32902 (June 
10, 2010), and accompanying Issues and Decision Memorandum at 
``Provision of HRS Steel for LTAR'' section.
    Under 19 CFR 351.511(a)(2)(iv), when measuring the adequacy of 
remuneration under tier one or tier two, the Department will adjust the 
benchmark price to reflect the price that a firm actually paid or would 
pay if it imported the product, including delivery charges and import 
duties. Regarding delivery charges, we have included the freight 
charges that would be incurred to deliver wire rod to the respondents' 
plants. We have also added import duties, as reported by the

[[Page 62371]]

GOC, and VAT applicable to imports of wire rod into the PRC. We have 
compared these prices to the respondents' actual purchase prices, 
including any taxes and delivery charges incurred to deliver the 
product to their plants.
    Comparing the adjusted benchmark prices to the prices paid by the 
respondents for the wire rod they purchased, we preliminarily determine 
that the GOC provided wire rod for LTAR, and that a benefit exists in 
the amount of the difference between the benchmark and what the 
respondents paid. See 19 CFR 351.511(a). We divided the difference 
between the amounts actually paid by Wireking and NKS for wire rod and 
what they would have paid under the benchmark in 2009, by the two 
companies' respective total sales in 2009. On this basis, we 
preliminarily determine the countervailable subsidy to be .82 percent 
and 0.46 percent ad valorem for Wireking and NKS, respectively.

J. Provision of Electricity for LTAR

    In the underlying investigation, we determined that this program 
conferred a countervailable benefit. See Kitchen Racks Decision 
Memorandum at 5-6 and 13. No interested party provided new evidence 
that would lead us to reconsider our earlier finding that there is a 
financial contribution that is specific. Therefore, our analysis is 
focused on whether a benefit was conferred during the POR.
    Both Wireking and NKS purchased electricity and provided monthly 
usage and payment data. See NQR at 12, NSQR1a at 8, NSQR2 at 3; WQR at 
11, WSQR1 at 6, WSQR2 at 6.
    To determine the existence and amount of any benefit from this 
program, we selected the highest electricity rates that were in effect 
during the POR, consistent with our approach in the investigation. The 
GOC provided electricity rate schedules for 2009, including the new 
rates based on the price adjustment that occurred in November 2009. See 
GQR at 23 and Exhibit GQ8-9. Based on these rate schedules, we have 
constructed benchmark peak, normal, and valley rates for the ``large 
industrial'' user category, including the highest provincial rate for 
the base rate.
    Consistent with our approach in drill pipe from the PRC we first 
calculated the variable electricity costs of NKS and Wireking by 
multiplying the monthly kilowatt hours (``KWH'') consumed at each price 
category (peak, normal, and valley) by the corresponding electricity 
rates they paid. See Drill Pipe From the People's Republic of China; 
Final Affirmative Countervailing Duty Determination, Final Affirmative 
Critical Circumstances Determination, 76 FR 1971 (January 11, 2011), 
and accompanying Issues and Decision Memorandum at ``Provision of 
Electricity for LTAR'' section. Next, we calculated the benchmark 
variable electricity cost by multiplying the monthly KWH consumed at 
each price category (peak, normal, and valley) by the highest 
electricity rate charged for each price category. To calculate the 
benefit for each month, we subtracted the variable electricity charge 
paid by each respondent during the POR from the monthly benchmark 
variable electricity cost.
    To measure whether the respondents received a benefit with regard 
to their transmitter capacity charge (a.k.a., base charge), we first 
multiplied the monthly transmitter capacity charged to the companies by 
the corresponding consumption quantity, where appropriate. Next, we 
calculated the benchmark transmitter capacity cost by multiplying 
companies' consumption quantities by the highest transmitter capacity 
rate reflected in the electricity rate benchmark chart. To calculate 
the benefit, we subtracted the transmitter costs paid by the companies 
during the POR from the benchmark transmitter costs.
    We then calculated the total benefit received during the POR under 
this program by summing the benefits stemming from the respondents' 
variable electricity payments and transmitter capacity payments.
    We divided the benefit by the respondents' total sales in POR. On 
this basis, we preliminarily determine net countervailable subsidy 
rates of 0.62 percent ad valorem for Wireking and 0.58 percent ad 
valorem for NKS.

II. Programs Preliminarily Determined Not To Confer a Measurable 
Benefit During the POR

A. Shunde Patent Application

    According to the GOC, this program was established in January 2001 
and is intended to encourage investors in the Shunde district, and to 
promote the development of the economy and technology. The GOC has 
reported that any enterprise or public institution, government organ, 
public organization, or individual, that resides in this district and 
applies for a domestic patent for an invention, utility model patent, 
or invention authorization, can receive this reward. See GSQR1 at 26.
    Shunde Science and Technology Bureau (currently the Shunde Economic 
Promotion Bureau) administers the program. See id. at 25 and Exhibit 7.
    Wireking applied for and received a grant under this program in 
2009. See WQR at 11.
    Based on our analysis, any potential benefit to Wireking under this 
program is less than 0.005 percent ad valorem. To determine this, we 
divided the amount received by Wireking in 2009 by Wireking's total 
sales in 2009. Where the countervailable subsidy rate for a program is 
less than 0.005 percent, the Department's practice is to not include 
that program in the total CVD rate. See, e.g., CFS Decision Memorandum 
at ``Analysis of Programs, Programs Determined Not To Have Been Used or 
Not To Have Provided Benefits During the POR for GE'' section. Thus, 
without prejudice to the question of whether this program confers a 
countervailable subsidy, and consistent with our practice, we determine 
that any potential benefit under this program is not measurable. See 
CFS Decision Memorandum at 15.
    We examined the following programs and preliminarily determine that 
the producers and/or exporters of the subject merchandise under review 
did not apply for or receive benefits under these programs during the 
POR:

III. Programs Found To Be Not Used or That Provided No Benefit During 
the POR

    1. Income Tax Refund for Reinvestment of Profits in Export-Oriented 
Enterprises.
    2. Income Tax Reduction for Export-Oriented FIEs.
    3. Local Income Tax Exemption or Reduction Program for 
``Productive'' FIEs.
    4. Preferential Tax Subsidies for Research and Development by FIEs.
    5. Income Tax Credits on Purchases of Domestically-Produced 
Equipment by FIEs.
    6. Income Tax Credits for Purchases of Domestically-Produced 
Equipment by Domestically-Owned Companies.
    7. Reduction in or Exemption from Fixed Assets Investment 
Orientation Regulatory Tax.
    8. VAT Rebates for FIEs Purchasing Domestically-Produced Equipment.
    9. Import Tariff and VAT Exemptions for FIEs and Certain Domestic 
Enterprises Using Imported Equipment in Encouraged Industries.
    10. Import Tariff Exemptions for the ``Encouragement of Investment 
by Taiwanese Compatriots''.
    11. Provision of Nickel for LTAR by the GOC.
    12. Government Provision of Water at LTAR to Companies Located in

[[Page 62372]]

Development Zones in Guangdong Province.
    13. Exemption from Land Development Fees for Enterprises Located in 
Industrial Cluster Zones.
    14. Reduction in Farmland Development Fees for Enterprises Located 
in Industrial Zones.
    15. Special Subsidy from the Technology Development Fund to 
Encourage Technology Development.
    16. Exemption from District and Township Level Highway Construction 
Fees for Enterprises Located in Industrial Cluster Zones.
    17. Exemptions from or Reductions in Educational Supplementary Fees 
and Embankment Defense Fees for Enterprises Located in Industrial 
Cluster Zones.
    18. Exemption from Real Estate Tax and Dike Maintaining Fee for 
FIEs in Guangdong Province.
    19. Import Tariff Refunds and Exemptions for FIEs in Guangdong 
Province.
    20. Preferential Loans and Interest Rate Subsidies in Guangdong 
Province.
    21. Direct Grants in Guangdong Province.
    22. Funds for ``Outward Expansion'' of Industries in Guangdong 
Province.
    23. Land-related Subsidies to Companies Located in Specific Regions 
of Guangdong Province.
    24. Import Tariff and VAT Refunds and Exemptions for FIEs in 
Zhejiang.
    25. Grants to Promote Exports from Zhejiang Province.
    26. Land-related Subsidies to Companies Located in Specific Regions 
of Zhejiang.
    27. Special Subsidy from the Technology Development Fund to 
Encourage Technology Innovation.
    28. Subsidies to Encourage Enterprises in Industrial Cluster Zones 
to Hire Post-Doctoral Workers.
    29. Land Purchase Grant Subsidy to Enterprises Located in 
Industrial Cluster Zones and Encouraged Enterprises.
    30. Exemption from Accommodating Facilities Fees for High-Tech and 
Large-Scale FIEs.
    31. Income Tax Deduction for Technology Development Expenses of 
FIEs.
    32. Preferential Land-Use Charges for Newly-Established, Industrial 
Projects in Zhongshan's Industrial Zones.
    33. Reduction of Land Price at the Township Level for Newly-
Established, Industrial Projects in Zhongshan's Industrial Zones.
    34. Reduction in Urban Infrastructure Fee for Industrial 
Enterprises in Industrial Zones.
    35. Income Tax Rebate for ``Superior Industrial Enterprises'' in 
Zhongshan.
    36. Accelerated Depreciation for New Technological Transformation 
Projects ``Superior Industrial Enterprises'' in Zhongshan.
    37. Exemption from the Tax on Investments in Fixed Assets for 
``Superior Industrial Enterprises'' in Zhongshan.

IV. Programs for Which More Information Is Required

A. Provision of Steel Strip for LTAR

    The GOC has provided certain information requested by the 
Department regarding this newly alleged subsidy. In particular, the GOC 
has identified the producers of steel strip used by Wireking and NKS as 
state-owned and has provided more general information regarding the 
hot-rolled steel industry in the PRC. However, information on the 
record shows that NKS used cold-rolled strip and that Wireking may have 
used cold-rolled strip. See NNSAQR at Exhibit 2, WSQR3 at Exhibit 3, 
and Petitioners' submission regarding benchmarks for the NSA (July 26, 
2011). Wireking did not distinguish its purchases of hot- and cold-
rolled strip. See WSQR3 at Exhibit 3. To date, the GOC has not provided 
information about the cold-rolled steel industry in the PRC or about 
the specificity of any possible subsidy arising from the provision of 
cold-rolled strip for LTAR. Consistent with section 782(d) of the Act, 
we intend to seek further information on these issues. Also, we intend 
to ask Wireking to distinguish its purchases of hot- and cold-rolled 
strip.

 B. Provision of Wire Rod for LTAR

    As discussed above in the ``I.I. Provision of Wire Rod for LTAR'' 
section, the information submitted by the GOC regarding one wire rod 
producer is incomplete. Therefore, we intend to seek further 
information. In particular, we intend to ask the GOC to provide 
complete translations of the information submitted in its most recent 
supplemental response, to confirm and establish the completeness of 
that information, to establish the reliability of the information 
already provided to gather information on whether the owners are 
officials of a village committee or other village-level government 
entity and to seek information regarding the individual owners status 
as Communist Party of China (``CCP'') officials directly from the CCP 
or, alternatively, why the GOC cannot obtain or request this 
information from the CCP.

C. Zhuhai Farmer Training Subsidy

    According the GOC, the Zhuhai Farmer Training Subsidy program was 
established in 2007 to promote the hiring and training of migrant rural 
workers. The GOC identified the municipal or district labor and social 
security department as the administrators of the program. See GSQR1 at 
32 and Exhibit SGQ-8. To receive benefits an enterprise must employ 
more than fifty migrant rural workers from other provinces, have no 
arrears in the payment of wages, must sign employment contracts with 
migrant rural workers for more than one year, and have the necessary 
training place and equipment. See GSQR1 at 32-37.
    The GOC's response requires clarification with regard to the 
information provided on whether this program is administered specific. 
Consistent with section 782(d) of the Act, we intend to seek further 
information on this issue.

Preliminary Results of Review

    In accordance with 19 CFR 351.221(b)(4)(i), we calculated 
individual subsidy rates for the mandatory respondents, Wireking and 
NKS.
    For the non-selected respondents which responded to our requests 
for Q&V information (i.e., Leader Metal, Dunli, and Hengtong), we have 
followed the Department's practice, which is to base the margin on an 
average of the margins calculated for those companies selected for 
individual review, excluding de minimis rates or rates based entirely 
on AFA. See, e.g., Certain Pasta From Italy: Preliminary Results of the 
13th (2008) Countervailing Duty Administrative Review, 75 FR 18806, 
18811 (April 13, 2010), unchanged in Certain Pasta from Italy: Final 
Results of the 13th (2008) Countervailing Duty Administrative Review, 
75 FR 37386 (June 29, 2010). Therefore, we have preliminarily assigned 
to Leader Metal, Hangzhou Dunli, and Hengtong the simple average of the 
rates calculated for Wireking and NKS. We have used a simple average 
rather than a weighted average because weight averaging the rates of 
the mandatory respondents risks disclosure of proprietary information.
    For the non-selected respondents which did not respond to our 
requests for Q&V information (i.e., Jiangsu Weixi and Asia Pacific 
CIS), we are applying an AFA rate, as described above.
    We preliminarily find the net subsidy rate for the producers/
exporters under review to be as follows:

[[Page 62373]]



------------------------------------------------------------------------
                                                       Net subsidy rate
                  Producer/Exporter                        (percent)
------------------------------------------------------------------------
Guangdong Wireking Housewares & Hardware Co., Ltd...                2.16
New King Shan (Zhu Hai) Co., Ltd....................                2.89
Leader Metal Industry Co., Ltd. (aka Marmon Retail                  2.53
 Services Asia).....................................
Hangzhou Dunli Import and Export Co., Ltd/Hangzhou                  2.53
 Dunli Industry Co., Ltd............................
Hengtong Hardware Manufacturing (Huizhou) Co., Ltd..                2.53
Jiangsu Weixi Group Co..............................              239.33
Asia Pacific CIS (Wuxi) Co., Ltd....................              239.33
------------------------------------------------------------------------

Assessment Rates

    If these preliminary results are adopted in our final results of 
this review, the Department intends to issue appropriate assessment 
instructions (as described below) directly to CBP 15 days after 
publication of the final results of this review.

Oven Racks

    For certain oven racks from the PRC entered, or withdrawn from 
warehouse for consumption from September 9, 2009, through December 31, 
2009, the Department will instruct CBP to assess countervailing duties 
at the rates applicable to each company shown above and to liquidate 
such entries. Entries of certain oven racks occurring before September 
9, 2009, were already liquidated at the time of the CVD order due to 
the ITC's finding of threat of material injury on certain oven racks. 
See CVD Order, 74 FR at 46974-75.

Refrigeration Shelving

    For certain refrigeration shelving from the PRC entered, or 
withdrawn from warehouse, for consumption from January 7, 2009, through 
May 6, 2009, and September 9, 2009, through December 31, 2009, the 
Department will instruct CBP to assess countervailing duties at the 
rates applicable to each company shown above and to liquidate such 
entries. Entries of certain refrigeration shelving occurring during the 
period May 7, 2009, through September 8, 2009, were not suspended for 
CVD purposes due to the termination of provisional measures. See CVD 
Order, 74 FR at 46974-75.

Cash Deposit Instructions

    The Department also intends to instruct CBP to collect cash 
deposits of estimated countervailing duties in the amounts shown above. 
For all non-reviewed firms, we will instruct CBP to continue to collect 
cash deposits of estimated countervailing duties at the most recent 
company-specific or all-others rate applicable to the company. These 
rates shall apply to all non-reviewed companies until a review of a 
company assigned these rates is requested. These cash deposit 
requirements, when imposed, shall remain in effect until further 
notice.

Public Comment

    Interested parties may submit written arguments in case briefs 
within 30 days of the date of publication of this notice. Rebuttal 
briefs, limited to issues raised in case briefs, may be filed not later 
than five days after the date of filing the case briefs. Parties who 
submit briefs in this proceeding should provide a summary of the 
arguments not to exceed five pages and a table of statutes, 
regulations, and cases cited. Copies of case briefs and rebuttal briefs 
must be served on interested parties in accordance with 19 CFR 
351.303(f).
    In accordance with 19 CFR 351.310(c), interested parties may 
request a hearing within 30 days after the date of publication of this 
notice. Unless otherwise specified, the hearing, if requested, will be 
held two days after the scheduled date for submission of rebuttal 
briefs.
    Pursuant to section 751(a)(3)(A) of the Act, the Department will 
publish a notice of the final results of this administrative review 
within 120 days from the publication of these preliminary results.
    We are issuing and publishing these results in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: September 30, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-26013 Filed 10-6-11; 8:45 am]
BILLING CODE 3510-DS-P