[Federal Register Volume 77, Number 149 (Thursday, August 2, 2012)]
[Notices]
[Pages 46034-46044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-18929]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-981]


Utility Scale Wind Towers From the People's Republic of China: 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination

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

DATES: Effective Date: August 2, 2012
SUMMARY: The Department of Commerce (the ``Department'') preliminarily 
determines that utility scale wind towers (``wind towers'') from the 
People's Republic of China (``PRC'') are being, or are likely to be, 
sold in the United States at less than fair value (``LTFV''), as 
provided in section 733 of the Tariff Act of 1930, as amended (``the 
Act''). The preliminary dumping margins are shown in the ``Preliminary 
Determination'' section of this notice.

FOR FURTHER INFORMATION CONTACT: Lilit Astvatsatrian, Shawn Higgins, 
Thomas Martin, or Trisha Tran, AD/CVD Operations, Office 4, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230; telephone: (202) 482-6412, (202) 482-0679, (202) 482-3936, or 
(202) 482-4852, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On December 29, 2011, the Department received a petition, filed by 
the Wind Tower Trade Coalition (``Petitioner'') in proper form, 
concerning imports of wind towers from the PRC.\1\ In January 2012, the 
Department requested information regarding, and clarification of, 
certain areas of the petition. Petitioner filed timely responses to 
these requests. The Department initiated an antidumping duty (``AD'') 
investigation of wind towers from the PRC on January 24, 2012.\2\
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    \1\ See Petition for the Imposition of Antidumping and 
Countervailing Duties: Utility Scale Wind Towers from the People's 
Republic of China and The Socialist Republic of Vietnam (December 
29, 2011) (``petition'').
    \2\ See Utility Scale Wind Towers From the People's Republic of 
China and the Socialist Republic of Vietnam: Initiation of 
Antidumping Duty Investigations, 77 FR 3440 (January 24, 2012) 
(``Initiation Notice'').
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    In the petition, Petitioner requested that the Department consider 
expanding the period of investigation (``POI'') to include more than 
two fiscal quarters (i.e., the period normally covered in an 
investigation involving a non-market economy (``NME'') country), 
because a POI of normal duration may not capture a large number of wind 
tower sales. Accordingly, in the Initiation Notice, the Department 
stated that it would give further consideration to the duration of the 
POI.\3\
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    \3\ Id., 77 FR at 3441.
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    In the Initiation Notice, the Department stated that it intended to 
issue its quantity and value (``Q&V'') questionnaire to the exporters/
producers named in the petition and to select respondents based on data 
provided in the responses to the Q&V questionnaire.\4\ On January 19, 
2012, the Department requested Q&V information from 48 companies 
identified in the petition as potential exporters of wind towers from 
the PRC.\5\ The Department received timely responses to its Q&V 
questionnaire from seven companies. The Department concluded from its 
review of these responses that the six-month POI data ensure a 
sufficient number of sales for its analysis.\6\ Accordingly, the 
Department, pursuant to 19 CFR 351.204(b)(1), determined to follow its 
normal practice of using the six-month POI.\7\ After further examining 
the responses to the Q&V questionnaire, the Department selected as 
mandatory respondents the two companies reporting the largest quantity 
of wind tower sales to the United States during the POI (i.e., Chengxi 
Shipyard Co., Ltd. (``CXS'') and Titan Wind Energy (Suzhou) Co., Ltd. 
(``Titan'')).\8\
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    \4\ Id., 77 FR at 3445.
    \5\ The Department requested this information on the day after 
the Initiation Notice was signed.
    \6\ See Memorandum from Abdelali Elouaradia, Director, AD/CVD 
Operations, Office 4, to Christian Marsh, Deputy Assistant Secretary 
for Antidumping and Countervailing Duty Operations, ``Respondent 
Selection in the Antidumping Duty Investigation of Utility Scale 
Wind Towers from the People's Republic of China'' (March 7, 2012) 
(``Respondent Selection Memorandum'') at 5.
    \7\ Id.
    \8\ Id. at 4-6; section 777A(c)(2) of the Act.
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    On March 8, 2012, the Department issued the AD questionnaire to 
both CXS and Titan. In April and May 2012, CXS and Titan submitted 
timely responses to the Department's AD questionnaire and Petitioner 
submitted comments regarding those responses. From April through July 
2012, the Department issued supplemental questionnaires to CXS and 
Titan. From May through July 2012, CXS and Titan submitted timely 
responses to the Department's supplemental questionnaires and 
Petitioner submitted comments regarding several of those responses.
    In the Initiation Notice, the Department notified parties that they 
had an opportunity to comment on the scope of the investigation as well 
as the appropriate physical characteristics of wind towers to be 
reported in response to the Department's AD questionnaire. In February 
2012, CS Wind China Co., Ltd. and CS Wind Corporation (collectively, 
``CS Wind'') and Petitioner submitted comments to the Department 
regarding the scope and the physical characteristics of merchandise 
under consideration to be used for reporting purposes.
    On February 13, 2012, CS Wind requested to be treated as a 
voluntary respondent in this investigation.\9\ CS Wind, however, 
withdrew its request for treatment as a voluntary respondent on April 
30, 2012.\10\
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    \9\ See Letter from CS Wind to the Secretary of Commerce, 
``Request To Be Voluntary Respondent in the Antidumping Duty 
Investigation on Utility Scale Wind Towers from the People's 
Republic of China'' (February 13, 2012).
    \10\ See Letter from CS Wind to the Secretary of Commerce, ``CS 
Wind China's Withdrawal of Request for Treatment as a Voluntary 
Respondent in the Antidumping Duty Investigation of Utility Scale 
Wind Towers from the People's Republic of China'' (April 30, 2012).

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[[Page 46035]]

    On February 13, 2012, the U.S. International Trade Commission 
(``ITC'') preliminarily determined that there is a reasonable 
indication that an industry in the United States is threatened with 
material injury by reason of imports of wind towers from the PRC.\11\
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    \11\ See Utility Scale Wind Towers From China and Vietnam, 77 FR 
9700 (February 17, 2012).
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    In the Initiation Notice, the Department notified parties that in 
order to obtain separate rate status in this investigation, exporters 
must file timely separate rate applications and timely responses to the 
Q&V questionnaire.\12\ In March 2012, the Department received, and 
accepted, separate rate applications from four companies. From April 
2012 through June 2012, the Department issued supplemental 
questionnaires to, and received responses from, the companies applying 
for a separate rate.
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    \12\ See Initiation Notice, 77 FR at 3445.
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    On March 16, 2012, the Department identified potential surrogate 
countries for use in this investigation and invited interested parties 
to comment on primary surrogate country and surrogate value 
selection.\13\ In April and May 2012, interested parties submitted 
comments on the appropriate primary surrogate country and surrogate 
values.
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    \13\ See Letter from Robert Bolling, Program Manager, Office 4, 
AD/CVD Operations, to All Interested Parties, ``Antidumping 
Investigation of Utility Scale Wind Towers from the People's 
Republic of China: Request for Surrogate Country and Surrogate Value 
Comments and Information'' (March 16, 2012).
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    On May 3, 2012, Petitioner made a timely request, pursuant to 
section 733(c)(1)(A) of the Act and 19 CFR 351.205(b)(2) and (e), for a 
50-day postponement of the preliminary determination.\14\ On May 17, 
2012, the Department fully extended the deadline for issuing the 
preliminary determination.\15\
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    \14\ See Letter from Petitioner to the Secretary of Commerce, 
``Certain Utility Scale Wind Towers from the People's Republic of 
China: Request to Fully Extend Preliminary Determination'' (May 3, 
2012).
    \15\ See Utility Scale Wind Towers From the People's Republic of 
China and the Socialist Republic of Vietnam: Postponement of 
Preliminary Determinations of Antidumping Duty Investigations, 77 FR 
29315 (May 17, 2012).
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    In June 2012, Petitioner filed comments for the Department to 
consider in its preliminary determination.\16\ No other party submitted 
comments regarding the preliminary determination.
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    \16\ See Letter from Petitioner to the Secretary of Commerce, 
``Utility Scale Wind Towers from the People's Republic of China: 
Petitioner's Pre-Preliminary Comments'' (June 29, 2012).
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Period of Investigation

    The POI is April 1, 2011 through September 30, 2011. This period 
corresponds to the two most recent fiscal quarters prior to the month 
in which the petition was filed (i.e., December 2011).\17\
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    \17\ See 19 CFR 351.204(b)(1).
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Scope of the Investigation

    The merchandise covered by this investigation is certain wind 
towers, whether or not tapered, and sections thereof. Certain wind 
towers are designed to support the nacelle and rotor blades in a wind 
turbine with a minimum rated electrical power generation capacity in 
excess of 100 kilowatts (``kW'') and with a minimum height of 50 meters 
measured from the base of the tower to the bottom of the nacelle (i.e., 
where the top of the tower and nacelle are joined) when fully 
assembled.
    A wind tower section consists of, at a minimum, multiple steel 
plates rolled into cylindrical or conical shapes and welded together 
(or otherwise attached) to form a steel shell, regardless of coating, 
end-finish, painting, treatment, or method of manufacture, and with or 
without flanges, doors, or internal or external components (e.g., 
flooring/decking, ladders, lifts, electrical buss boxes, electrical 
cabling, conduit, cable harness for nacelle generator, interior 
lighting, tool and storage lockers) attached to the wind tower section. 
Several wind tower sections are normally required to form a completed 
wind tower.
    Wind towers and sections thereof are included within the scope 
whether or not they are joined with non-subject merchandise, such as 
nacelles or rotor blades, and whether or not they have internal or 
external components attached to the subject merchandise.
    Specifically excluded from the scope are nacelles and rotor blades, 
regardless of whether they are attached to the wind tower. Also 
excluded are any internal or external components which are not attached 
to the wind towers or sections thereof.
    Merchandise covered by this investigation is currently classified 
in the Harmonized Tariff System of the United States (``HTSUS'') under 
subheadings 7308.20.0020 \18\ or 8502.31.0000.\19\ Prior to 2011, 
merchandise covered by this investigation was classified in the HTSUS 
under subheading 7308.20.0000 and may continue to be to some degree. 
While the HTSUS subheadings are provided for convenience and customs 
purposes, the written description of the scope of the investigation is 
dispositive.
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    \18\ Wind towers are classified under HTSUS 7308.20.0020 when 
imported as a tower or tower section(s) alone.
    \19\ Wind towers may also be classified under HTSUS 8502.31.0000 
when imported as part of a wind turbine (i.e., accompanying nacelles 
and/or rotor blades).
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Scope Comments

    In accordance with the preamble to the Department's regulations, 
the Department set aside a period of time for parties to raise issues 
regarding product coverage, and encouraged all parties to submit 
comments within 20 calendar days of publication of the Initiation 
Notice.\20\
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    \20\ See Antidumping Duties; Countervailing Duties, 62 FR 27296, 
27323 (May 19, 1997); Initiation Notice, 77 FR at 3441.
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    On February 7, 2012, the Department received timely comments on the 
scope of the investigation from Petitioner.\21\ Specifically, 
Petitioner requested that the scope cover all future generations of 
utility scale wind towers, regardless of the type of the future tower 
(e.g., lattice mast, space frame tower, etc.), that are designed to 
support turbine generators with a capacity in excess of 100 kW.\22\ 
Petitioner argued that, in a previous case, the Department included 
scope language that covered future generations of semiconductors.\23\ 
Petitioner also stated that wind tower generating capacities have been 
consistently increasing, generator efficiencies have been improving, 
and turbine heights have been rising to altitudes with much stronger 
winds.\24\ Petitioner contends, in fact, that the next generation of 
wind towers will be over 100 meters in height and capable of supporting 
generators with capacities of 7.0 megawatts and larger.\25\ 
Accordingly, Petitioner proposed including language in the scope 
stating that ``{f{time} uture utility scale wind tower configurations 
that meet the minimum height requirement and are designed to support 
wind turbine electrical generators greater than 100 kW are also 
included within the scope.'' \26\
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    \21\ See Letter from Petitioner to the Secretary of Commerce, 
``Certain Utility Scale Wind Towers from the People's Republic of 
China and the Socialist Republic of Vietnam: Scope Comments'' 
(February 7, 2012) (``Scope Comments''). No other parties provided 
comments.
    \22\ Id. at 2.
    \23\ Id. at 2-3; Initiation of Antidumping Duty Investigation: 
Dynamic Random Access Memory Semiconductors of One Megabit and Above 
From the Republic of Korea, 57 FR 21231 (May 19, 1992) 
(``Semiconductors'').
    \24\ See Scope Comments at 3.
    \25\ Id.
    \26\ Id. at 2.
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    Section 731 of the Act requires the Department to define the scope 
of merchandise subject to investigation in

[[Page 46036]]

each AD investigation. If the Department initiates an investigation 
based upon a petition, it will continue to review the scope of the 
merchandise described in the petition to determine the scope of the 
final order.\27\
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    \27\ See Antidumping Duties; Countervailing Duties, 62 FR at 
27323.
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    Generally, the Department prefers to define product coverage by the 
physical characteristics of the merchandise subject to 
investigation.\28\ In this proceeding, a wind tower section subject to 
this investigation ``consists of, at a minimum, multiple steel plates 
rolled into cylindrical or conical shapes and welded together (or 
otherwise attached) to form a steel shell* * *.'' Consequently, to 
revise the scope language as proposed by Petitioner would expand 
product coverage beyond the physical characteristics of merchandise 
currently subject to this investigation by including all products 
meeting the minimum height and power generating capacity defined in the 
scope, regardless of physical characteristics. Moreover, in 
Semiconductors, the Department did not cover future generations of 
semiconductors as claimed by Petitioner but, rather, covered future 
packaging and assembling of dynamic random access semiconductors. What 
distinguishes the instant investigation from Semiconductors is that, 
while the Department never contemplated future generations of 
semiconductors, Petitioner's admitted intention in the instant 
investigation is to ``cover all future generations of utility scale 
wind towers regardless of the type of future tower.'' \29\ This would 
result in an open-ended scope, potentially covering products whose 
physical characteristics differ significantly from the physical 
characteristics of the merchandise subject to this investigation. 
Therefore, for this preliminary determination, the Department has not 
adopted the revised scope language proposed by Petitioner.
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    \28\ See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value and Affirmative Final Determination of Critical 
Circumstances: Circular Welded Carbon Quality Steel Pipe from the 
People's Republic of China, 73 FR 31970 (June 5, 2008), and 
accompanying Issues and Decision Memorandum at Comment 1.
    \29\ See Scope Comments at 2.
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Non-Market Economy Country

    The PRC has been treated as an NME in every proceeding conducted by 
the Department.\30\ In accordance with section 771(18)(C)(i) of the 
Act, any determination that a foreign country is an NME shall remain in 
effect until revoked by the administering authority. The Department has 
not revoked the PRC's status as an NME. Therefore, the Department has 
treated the PRC as an NME in this preliminary determination and, 
accordingly, applied the NME methodology.
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    \30\ See, e.g., Certain Kitchen Appliance Shelving and Racks 
From the People's Republic of China: Preliminary Determination of 
Sales at Less Than Fair Value and Postponement of Final 
Determination, 74 FR 9591, 9593 (March 5, 2009), unchanged in 
Certain Kitchen Appliance Shelving and Racks From the People's 
Republic of China: Final Determination of Sales at Less Than Fair 
Value, 74 FR 36656 (July 24, 2009).
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Surrogate Country

    Section 773(c)(1) of the Act directs the Department to base normal 
value (``NV''), in most cases, on the NME producer's factors of 
production (``FOP'') valued in a surrogate market-economy (``ME'') 
country or countries considered appropriate by the Department. The 
Department will value FOPs, in accordance with section 773(c)(4) of the 
Act, by using ``to the extent possible, the prices or costs of factors 
of production in one or more market economy countries that are--(A) at 
a level of economic development comparable to that of the nonmarket 
economy country, and (B) significant producers of comparable 
merchandise.'' Further, pursuant to 19 CFR 351.408(c)(2), the 
Department will normally value FOPs in a single surrogate country.

A. Economic Comparability

    The Department identified Colombia, Indonesia, Peru, the 
Philippines, South Africa, Thailand, and Ukraine as countries equally 
comparable to the PRC in terms of economic development.\31\ Consistent 
with its practice, as reflected in the Policy Bulletin 04.1, the 
Department found that Colombia, Indonesia, Peru, the Philippines, South 
Africa, Thailand, and Ukraine are countries that are at a level of 
economic development comparable to that of the PRC and, therefore, 
satisfy the first criterion of section 773(c)(4) of the Act.\32\
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    \31\ See Memorandum from Carole Showers, Director, Office of 
Policy, Import Administration, to Robert Bolling, Program Manager, 
Office 4, Import Administration, ``Request for a List of Surrogate 
Countries for an Antidumping Duty Investigation of Utility Scale 
Wind Towers, from the People's Republic of China'' (January 27, 
2012).
    \32\ See Department Policy Bulletin No. 04.1: Non-Market Economy 
Surrogate Country Selection Process (March 1, 2004) (``Policy 
Bulletin 04.1''); Memorandum from Trisha Tran, International Trade 
Compliance Analyst, AD/CVD Operations, Office 4, to Abdelali 
Elouaradia, Director, AD/CVD Operations, Office 4, ``Antidumping 
Duty Investigation of Utility Scale Wind Towers from the People's 
Republic of China: Selection of a Surrogate Country'' (July 26, 
2012) (``Surrogate Country Memorandum'') at 5.
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B. Significant Producer of Comparable Merchandise

    In order to identify which countries export merchandise comparable 
to the merchandise under consideration, the Department obtained export 
data for the six-digit tariff sub-headings listed in the description of 
the scope of this investigation (i.e., 7308.20 and 8502.31) for each of 
the seven potential surrogate countries.\33\ After reviewing this 
export data, the Department preliminarily determined that (1) Columbia, 
Indonesia, Peru, South Africa, Thailand and Ukraine are significant 
producers of merchandise comparable to the merchandise under 
consideration and (2) the Philippines is not a significant producer of 
merchandise comparable to the merchandise under consideration.\34\
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    \33\ Id. at 5-7.
    \34\ Id. at 7.
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C. Data Availability

    If more than one potential surrogate country satisfies the 
statutory requirements for selection as a surrogate country, the 
Department selects the primary surrogate country based on data 
availability and reliability.\35\ When evaluating surrogate value data, 
the Department considers several factors, including whether the 
surrogate values are publicly available, contemporaneous with the POI, 
representative of a broad market average, tax and duty-exclusive, and 
specific to the inputs being valued.\36\ The record of this 
investigation contains publicly-available South African and Ukrainian 
surrogate value data for FOPs.\37\ Petitioner contends that the 
Department should select South Africa as the primary surrogate country 
because South African surrogate values, including financial statements 
for South African producers of merchandise comparable to wind towers, 
are available for all FOPs.\38\ After reviewing the surrogate value 
data on the record, the Department has found that Ukraine provides the 
most specific information to value each respondent's most significant 
input (i.e., steel plate). Accordingly, the Department can more 
accurately value each company's steel plate FOP by using the more 
specific Ukrainian surrogate value information than by using the single 
basket category

[[Page 46037]]

available for South Africa.\39\ Therefore, the Department has 
preliminarily determined that Ukraine offers the best available 
surrogate value data because (1) it is most specific to the 
respondents' primary input and (2) specificity of the surrogate value 
for the primary input in this proceeding outweighs the Department's 
preference to value all inputs in a single country.\40\
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    \35\ See Policy Bulletin 04.1; Surrogate Country Memorandum at 
7-8.
    \36\ See Policy Bulletin 04.1; Surrogate Country Memorandum at 
7-8.
    \37\ See Surrogate Country Memorandum at 8.
    \38\ See Letter from Petitioner to the Secretary of Commerce, 
``CS Wind's Surrogate Country Comments: Antidumping Duty 
Investigation on Utility Scale Wind Towers from the People's 
Republic of China'' (April 25, 2012).
    \39\ See Surrogate Country Memorandum at 8-9.
    \40\ See Surrogate Country Memorandum at 8-9; High Pressure 
Steel Cylinders From the People's Republic of China: Final 
Determination of Sales at Less Than Fair Value, 77 FR 26739 (May 7, 
2012), and accompanying Issues and Decision Memorandum at Comment 1.
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    For the reasons above, the Department has preliminarily determined, 
pursuant to section 773(c)(4) of the Act, that it is appropriate to use 
Ukraine as the primary surrogate country because Ukraine is (1) at a 
level of economic development comparable to the PRC and (2) a 
significant producer of merchandise comparable to the merchandise under 
consideration.\41\ Moreover, the Department has reliable, POI-
contemporaneous Ukrainian data that are more specific, compared to the 
data on the record from alternative countries, to the respondents' 
FOPs.\42\ Therefore, the Department has calculated NV using Ukrainian 
prices when available and appropriate to value the FOPs of CXS and 
Titan.\43\
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    \41\ See Surrogate Country Memorandum at 9-10.
    \42\ Id. at 8-10.
    \43\ See Memorandum from Lilit Astvatsatrian and Trisha Tran, 
International Trade Compliance Analysts, AD/CVD Operations, Office 
4, to Robert Bolling, Program Manager, AD/CVD Operations, Office 4, 
``Utility Scale Wind Towers from the People's Republic of China: 
Preliminary Determination Surrogate Value Memorandum'' (July 26, 
2012) (``Surrogate Value Memorandum'').
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    For the final determination in this investigation interested 
parties may submit publicly available information to value the FOPs 
within 40 days after the publication of this preliminary 
determination.\44\
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    \44\ See 19 CFR 351.301(c)(3)(i). In accordance with 19 CFR 
351.301(c)(1), for the final determination of this investigation, 
interested parties may submit factual information to rebut, clarify, 
or correct factual information submitted by any other interested 
party less than ten days before, on, or after, the applicable 
deadline for submission of such factual information. However, the 
Department notes that 19 CFR 351.301(c)(1) permits new information 
only insofar as it rebuts, clarifies, or corrects information 
recently placed on the record. The Department generally will not 
accept the submission of additional, previously absent-from-the-
record alternative surrogate value information. See Glycine from the 
People's Republic of China: Final Results of Antidumping Duty 
Administrative Review and Final Rescission, in Part, 72 FR 58809 
(October 17, 2007), and accompanying Issues and Decision Memorandum 
at Comment 2. Additionally, for each piece of factual information 
submitted with surrogate value rebuttal comments, the interested 
party must provide a written explanation of what information that is 
already on the record of the ongoing proceeding the factual 
information is rebutting, clarifying, or correcting.
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Separate Rates

    In proceedings involving NME countries, the Department maintains a 
rebuttable presumption that all companies within the country are 
subject to government control and, therefore, should be assessed a 
single weighted-average dumping margin.\45\ The Department's policy is 
to assign all exporters of merchandise under consideration that are in 
an NME country this single rate unless an exporter can demonstrate that 
it is sufficiently independent so as to be entitled to a separate 
rate.\46\ The Department analyzes whether each entity exporting the 
merchandise under consideration is sufficiently independent under a 
test established in Sparklers \47\ and further developed in Silicon 
Carbide.\48\ According to this separate rate test, the Department will 
assign a separate rate in NME proceedings if a respondent can 
demonstrate the absence of both de jure and de facto government control 
over its export activities. If, however, the Department determines that 
a company is wholly foreign owned, then a separate rate analysis is not 
necessary to determine whether that company is independent from 
government control and eligible for a separate rate.
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    \45\ See, e.g., Polyethylene Terephthalate Film, Sheet, and 
Strip from the People's Republic of China: Final Determination of 
Sales at Less Than Fair Value, 73 FR 55039, 55040 (September 24, 
2008) (``PET Film'').
    \46\ See Final Determination of Sales at Less Than Fair Value: 
Sparklers From the People's Republic of China, 56 FR 20588, 20589 
(May 6, 1991) (``Sparklers'').
    \47\ Id.
    \48\ See Notice of Final Determination of Sales at Less Than 
Fair Value: Silicon Carbide From the People's Republic of China, 59 
FR 22585 (May 2, 1994) (``Silicon Carbide'').
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A. Separate Rate Recipients

1. Joint Ventures Between Chinese and Foreign Companies or Wholly 
Chinese-Owned Companies
    Two separate rate applicants that are receiving a separate rate 
(i.e., Sinovel Wind Group Co., Ltd. (``Sinovel'') and Guodian United 
Power Technology Baoding Co., Ltd. (``Guodian'')) and the mandatory 
respondents (i.e., CXS and Titan) provided evidence that they are 
either joint ventures between Chinese and foreign companies or are 
wholly Chinese-owned companies.\49\ The Department has analyzed whether 
Sinovel, Guodian, and the mandatory respondents have demonstrated an 
absence of de jure and de facto government control over their 
respective export activities.\50\
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    \49\ See Letter from Sinovel to the Secretary of Commerce, 
``Utility Scale Wind Towers from the People's Republic of China: 
Submission of Separate-Rate Application and Required Supporting 
Documents'' (March 21, 2012) (``Sinovel's SRA''); Letter from 
Guodian to the Secretary of Commerce, ``Separate Rate Application 
and Required Supporting Documentation'' (March 23, 2012) 
(``Guodian's SRA''); Letter from CXS to the Department of Commerce, 
``Utility Scale Wind Towers from the People's Republic of China: 
Section A Questionnaire Response of Chengxi Shipyard Co., Ltd.'' 
(April 5, 2012) (``CXS's Section A'') at 7-17, Exhibits A.4, A.9-
A.18; Letter from CXS to the Department of Commerce, ``Utility Scale 
Wind Towers from the PRC: Supplemental Section A Questionnaire 
Response of Chengxi Shipyard Co., Ltd.'' (May 17, 2012) (``CXS's 
Section A Supplemental'') at 1-42, Exhibits A.36-A.61; Letter from 
CXS to the Department of Commerce, ``Utility Scale Wind Towers from 
the PRC: Part Two of Supplemental Sections A and C Questionnaire 
Response of Chengxi Shipyard Co., Ltd.'' (June 25, 2012) (``CXS's 
Sections A&C Supplemental'') at 1-17, Exhibits A.73-A.76; Letter 
from Titan to the Secretary of Commerce, ``Utility Scale Wind Towers 
from the People's Republic of China: Section A Questionnaire 
Response of Titan Wind Energy (Suzhou) Co., Ltd.'' (April 5, 2012) 
(``Titan's Section A'') at 10-20, Exhibits A-3-A-11.
    \50\ See ``Companies Not Receiving a Separate Rate'' section 
below for a discussion of AVIC.
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a. Absence of De Jure Control
    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) legislative 
enactments decentralizing control over export activities of the 
companies; and (3) other formal measures by the government 
decentralizing control over export activities of companies.\51\
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    \51\ See Sparklers, 56 FR at 20589.
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    The evidence provided by Sinovel, Guodian, and the mandatory 
respondents supports a preliminary finding of an absence of de jure 
government control based on the following: (1) an absence of 
restrictive stipulations associated with the individual exporters' 
business and export licenses; (2) the existence of applicable 
legislative enactments decentralizing control of the companies; and (3) 
the implementation of formal measures by the government decentralizing 
control of Chinese companies.\52\
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    \52\ See Sinovel's SRA; Guodian's SRA; CXS's Section A at 7-10, 
Exhibits A.9-A.10; CXS's Section A Supplemental at 1-6; CXS's 
Sections A&C Supplemental at 1-9, Exhibits A.73-A.76; Titan's 
Section A at 10-14, Exhibits A-3-A-4.
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b. Absence of De Facto Control
    Typically, the Department considers four factors in evaluating 
whether a respondent is subject to de facto government control of its 
export functions: (1) Whether the export prices (``EP'') are set by, or 
are subject to the

[[Page 46038]]

approval of, a government agency; (2) whether the respondent has 
authority to negotiate and sign contracts and other agreements; (3) 
whether the respondent has autonomy from the government in making 
decisions regarding the selection of management; and (4) whether the 
respondent retains the proceeds of its export sales and makes 
independent decisions regarding the disposition of profits or financing 
of losses.\53\ The Department has determined that an analysis of de 
facto control is critical in determining whether respondents are, in 
fact, subject to a degree of government control which would preclude 
the Department from assigning separate rates.
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    \53\ See Silicon Carbide, 59 FR at 22586-87; Notice of Final 
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol 
From the People's Republic of China, 60 FR 22544, 22545 (May 8, 
1995).
---------------------------------------------------------------------------

    The Department has received no comments challenging the claims of 
Sinovel, Guodian, and Titan that they operate free of de facto 
government control. However, Petitioner argues that CXS is controlled 
by the central government both directly, as a matter of national 
security, and indirectly, through the State-Owned Assets Supervision 
and Administration Commission of the State Council (``SASAC'') and 
CXS's ultimate corporate parent, China State Shipbuilding Corporation 
(``CSSC'').\54\ First, Petitioner contends that the central government 
directly controls CSSC and its subsidiaries, such as CXS, because CSSC 
and its subsidiaries are among the largest naval warship builders in 
the PRC and, therefore, vital to the PRC's national security.\55\ 
Moreover, Petitioner claims that the central government directly 
controls companies such as CXS in order to further its goal of 
developing the PRC's green energy sector for national security 
purposes.\56\ Although Petitioner provides no evidence that the central 
government sets EPs or otherwise controls export activities, Petitioner 
suggests that CXS's claim that it cannot provide the Department with 
certain documents related to CSSC's management, board of supervisors, 
and affiliates because they contain business secrets specific to the 
defense industry is further evidence of both (1) the degree to which 
the government is involved in the operations of CSSC and CXS and (2) 
the fundamental role of these companies in the maintenance of the PRC's 
national security.\57\ Second, with regard to indirect control by the 
central government, Petitioner asserts that CSSC, which is directly 
administered by SASAC, is the controlling shareholder of CXS because 
the record of this investigation demonstrates that CSSC owns over 61 
percent of China CSSC Holdings Limited (``CSSC Holdings'') and CSSC 
Holdings owns 100 percent of CXS.\58\ This, in Petitioner's view, is 
consistent with CXS's responses to the Department's supplemental 
questionnaires in which CXS admitted that the ``actual controller'' of 
CXS is CSSC, not CSSC Holdings.\59\ For these reasons, Petitioner 
contends that the Department should find that CXS is part of the PRC-
wide entity.
---------------------------------------------------------------------------

    \54\ See Letter from Petitioner to the Secretary of Commerce, 
``Utility Scale Wind Towers from the People's Republic of China: 
Response to Chengxi Shipyard Co., Ltd. Supplemental Section A 
Questionnaire Response And Separate Rate Request'' (May 25, 2012) at 
1-7.
    \55\ Id. at 4-6.
    \56\ Id. at 6.
    \57\ Id. at 4-6.
    \58\ Id. at 2-4.
    \59\ Id. at 3-4.
---------------------------------------------------------------------------

    The Department, after considering Petitioner's comments, has 
preliminarily determined that the record of this investigation does not 
demonstrate that the government controls, either directly or 
indirectly, CXS's export functions. The information provided by 
Petitioner in support of its claim that the government directly 
controls CXS does not address the separate rate test's primary focus 
``on controls over the decision-making process on export-related 
investment, pricing, and output decisions at the individual firm 
level''; rather it addresses only CSSC's importance to the PRC's 
national security and the government's general control over companies, 
such as CSSC, that are members of defense-related industries.\60\ 
Similarly, the documents containing defense industry secrets that CXS's 
was unable to provide to the Department are not specific to CXS's day-
to-day export activities but, instead, relate specifically to CSSC.\61\ 
Further, the Department has found no evidence on the record that the 
government's influence extends through SASAC, CSSC, and CSSC Holdings 
to the day-to-day export activities of CXS. CXS has provided 
information demonstrating its ability to set its own EPs, to negotiate 
and sign agreements, to select management, and to decide how to dispose 
of profits and finance losses.\62\ Therefore, the Department has 
preliminarily determined that the evidence on the record supports a 
preliminary finding that CXS is not subject to de facto government 
control of its export functions.
---------------------------------------------------------------------------

    \60\ See Import Administration's Policy Bulletin No. 05.1, 
``Separate-Rates Practice and Application of Combination Rates in 
Antidumping Investigations involving Non-Market Economy Countries'' 
(April 5, 2005) (``Policy Bulletin 05.1''), available on the 
Department's Web site at http://ia.ita.doc.gov/policy/bull05-1.pdf, 
at 1; Certain Circular Welded Carbon Quality Steel Line Pipe from 
the People's Republic of China: Final Determination of Sales at Less 
Than Fair Value, 74 FR 14514 (March 31, 2009), and accompanying 
Issues and Decision Memorandum at Comment 11 (finding that ownership 
and/or theoretical control by the government is not sufficient to 
deny a separate rate; rather, the evidence on the record must 
demonstrate that the government controls the individual export 
decisions of the respondent).
    \61\ CXS was unable to provide (1) Appointment letters and 
evaluations of CSSC's management, (2) the identities of the members 
of CSSC's board of supervisors, and (3) a complete list of all 
CSSC's affiliates. With regard to the third item, CSSC has provided 
a signed certification stating that no affiliates of CSSC, except 
for CXS and one of CXS's subsidiaries, are involved in the export 
and/or production of the merchandise under consideration. See CXS's 
Section A Supplemental at Exhibit A.51.
    \62\ See CXS's Section A at 11-17, Exhibits A.4, A.10-A.18; 
CXS's Section A Supplemental at 7-42, Exhibits A.36-A.61; CXS's 
Sections A&C Supplemental at 9-17.
---------------------------------------------------------------------------

    The evidence provided by Sinovel, Guodian, and Titan also supports 
a preliminary finding of an absence of de facto government control 
based on record statements and supporting documentation showing that 
the companies: (1) Set their own EPs independent of the government and 
without the approval of a government authority; (2) have the authority 
to negotiate and sign contracts and other agreements; (3) maintain 
autonomy from the government in making decisions regarding the 
selection of management; and (4) retain the proceeds of their 
respective export sales and make independent decisions regarding 
disposition of profits or financing of losses.\63\
---------------------------------------------------------------------------

    \63\ See Sinovel's SRA; Guodian's SRA; Titan's Section A at 14-
20, Exhibits A-4-A-11.
---------------------------------------------------------------------------

    Therefore, the evidence placed on the record of this investigation 
by Sinovel, Guodian, and the mandatory respondents demonstrates an 
absence of de jure and de facto government control under the criteria 
identified in Sparklers and Silicon Carbide. Accordingly, the 
Department has preliminarily granted separate rates to Sinovel, 
Guodian, and the mandatory respondents.\64\
---------------------------------------------------------------------------

    \64\ See ``Preliminary Determination'' section below.
---------------------------------------------------------------------------

2. Wholly Foreign-Owned
    One separate rate applicant in this investigation (i.e., CS Wind), 
provided evidence in its separate rate application that it is wholly 
owned by individuals and companies located in ME countries.\65\ 
Moreover, the Department

[[Page 46039]]

has no evidence indicating that CS Wind is under the control of the PRC 
government. For these reasons, it is not necessary for the Department 
to conduct a separate rate analysis to determine whether CS Wind is 
independent from government control.\66\ Therefore, the Department has 
preliminarily granted a separate rate to CS Wind.
---------------------------------------------------------------------------

    \65\ See Letter from CS Wind Corporation to the Secretary of 
Commerce, ``CS Wind Corporation Separate Rate Application in the 
Antidumping Duty Investigation of Utility Scale Wind Towers from the 
People's Republic of China'' (March 26, 2012); Letter from CS Wind 
China Co., Ltd. to the Secretary of Commerce, ``CS Wind China 
Separate Rate Application in the Antidumping Duty Investigation of 
Utility Scale Wind Towers from the People's Republic of China'' 
(March 26, 2012).
    \66\ See, e.g., Seamless Refined Copper Pipe and Tube from the 
People's Republic of China: Preliminary Determination of Sales at 
Less Than Fair Value and Postponement of Final Determination, 75 FR 
26716, 26720 (May 12, 2010), unchanged in Seamless Refined Copper 
Pipe and Tube From the People's Republic of China: Final 
Determination of Sales at Less Than Fair Value, 75 FR 60725 (October 
1, 2010).
---------------------------------------------------------------------------

B. Companies Not Receiving a Separate Rate

    The Department has not granted a separate rate to AVIC 
International Renewable Energy Co., Ltd. (``AVIC'') because it failed 
to submit a timely response to the Department's supplemental separate 
rate questionnaire \67\ and withdrew its participation in this AD 
investigation.\68\
---------------------------------------------------------------------------

    \67\ See Letter from Robert Bolling, Program Manager, AD/CVD 
Operations, Office 4, to AVIC, ``Supplemental Separate Rate 
Questionnaire in the Antidumping Duty Investigation of Utility Scale 
Wind Towers from the People's Republic of China'' (April 5, 2012).
    \68\ See Letter from AVIC to the Secretary of Commerce, 
``Utility Scale Wind Towers from the People's Republic of China: 
Notice of Intent to Not Participate in Antidumping Investigation and 
Request of Removal from Public Service List and APO Service List'' 
(April 30, 2012).
---------------------------------------------------------------------------

Margin for the Separate Rate Companies

    Normally, the Department's practice is to assign to separate rate 
entities that were not individually examined a rate equal to the 
average of the rates calculated for the individually examined 
respondents, excluding any rates that are zero, de minimis, or based 
entirely on adverse facts available (``AFA'').\69\ Consistent with this 
practice, the Department has assigned Sinovel, Guodian, and CS Wind a 
rate of 26.25 percent, which is equal to an average of the rates 
calculated for the mandatory respondents.\70\
---------------------------------------------------------------------------

    \69\ See, e.g., Preliminary Determination of Sales at Less Than 
Fair Value and Partial Affirmative Determination of Critical 
Circumstances: Certain Polyester Staple Fiber from the People's 
Republic of China, 71 FR 77373, 77377 (December 26, 2006), unchanged 
in Final Determination of Sales at Less Than Fair Value and Partial 
Affirmative Determination of Critical Circumstances: Certain 
Polyester Staple Fiber from the People's Republic of China, 72 FR 
19690 (April 19, 2007).
    \70\ See Memorandum from Thomas Martin, International Trade 
Compliance Analyst, AD/CVD Operations, Office 4, to the File, 
``Utility Scale Wind Towers from the People's Republic of China: 
Calculation of the Preliminary Margin for Separate Rate Recipients'' 
(July 26, 2012).
---------------------------------------------------------------------------

The PRC-Wide Entity

    The record indicates that, in addition to AVIC, there are other PRC 
exporters and/or producers of the merchandise under consideration 
during the POI that did not respond to the Department's requests for 
information. Specifically, the Department did not receive responses to 
its Q&V questionnaire from over 30 PRC exporters and/or producers of 
merchandise under consideration that were named in the petition and to 
whom the Department issued the questionnaire.\71\ Because AVIC and 
these non-responsive PRC companies have not demonstrated that they are 
eligible for separate rate status, the Department considers them part 
of the PRC-wide entity.
---------------------------------------------------------------------------

    \71\ See Respondent Selection Memorandum at 1-2. The Department 
also posted a copy of the Q&V questionnaire on its Web site.
---------------------------------------------------------------------------

Application of Facts Available and Adverse Facts Available

    Section 776(a)(2) of the Act provides that, if an interested party 
(A) Withholds information that has been requested by the Department, 
(B) fails to provide such information in a timely manner or in the form 
or manner requested, subject to subsections 782(c)(1) and (e) of the 
Act, (C) significantly impedes a proceeding under the AD statute, or 
(D) provides such information but the information cannot be verified, 
the Department shall, subject to subsection 782(d) of the Act, use 
facts otherwise available in reaching the applicable determination.
    The Department has found that the PRC-wide entity withheld 
information requested by the Department, failed to provide information 
in a timely manner, and significantly impeded this proceeding by not 
submitting the requested information. The PRC-wide entity neither filed 
documents indicating it was having difficulty providing the information 
nor requested that it be allowed to submit the information in an 
alternate form. As a result, the Department has preliminarily 
determined, pursuant to sections 776(a)(2)(A)-(C) of the Act, that it 
may use facts otherwise available to determine the rate for the PRC-
wide entity.\72\
---------------------------------------------------------------------------

    \72\ See, e.g., Notice of Preliminary Determination of Sales at 
Less Than Fair Value, Affirmative Preliminary Determination of 
Critical Circumstances and Postponement of Final Determination: 
Certain Frozen Fish Fillets From the Socialist Republic of Vietnam, 
68 FR 4986, 4991 (January 31, 2003), unchanged in Notice of Final 
Determination of Sales at Less Than Fair Value and Affirmative 
Critical Circumstances: Certain Frozen Fish Fillets from the 
Socialist Republic of Vietnam, 68 FR 37116 (June 23, 2003).
---------------------------------------------------------------------------

    Section 776(b) of the Act provides that the Department, in 
selecting from among the facts otherwise available, may use an 
inference that is adverse to the interests of a party if that party has 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information. The Department has found that the PRC-
wide entity's failure to provide the requested information constitutes 
circumstances under which it is reasonable to conclude that less than 
full cooperation has been shown.\73\ Therefore, the Department has 
preliminarily found that the PRC-wide entity has failed to cooperate to 
the best of its ability to comply with requests for information and, 
consequently, the Department may employ an inference that is adverse to 
the PRC-wide entity in selecting from among the facts otherwise 
available.
---------------------------------------------------------------------------

    \73\ See Nippon Steel Corporation v. United States, 337 F.3d 
1373, 1383 (Fed. Cir. 2003) (noting that the Department need not 
show intentional conduct existed on the part of the respondent, but 
merely that a ``failure to cooperate to the best of a respondent's 
ability'' existed (i.e., information was not provided ``under 
circumstances in which it is reasonable to conclude that less than 
full cooperation has been shown'')).
---------------------------------------------------------------------------

    Section 776(b) of the Act states that the Department, when 
employing an adverse inference, may rely upon information derived from 
the petition, the final determination from the LTFV investigation, a 
previous administrative review, or any other information placed on the 
record. In selecting a rate based on AFA, the Department selects a rate 
that is sufficiently adverse to ensure that the uncooperative party 
does not obtain a more favorable result by failing to cooperate than if 
it had fully cooperated. The Department's practice is to select, as an 
AFA rate, the higher of: (1) the highest dumping margin alleged in the 
petition, or (2) the highest calculated dumping margin of any 
respondent in the investigation.\74\ In this investigation, the 
petition dumping margin is 213.54 percent.\75\ This rate is higher than 
any of the weighted-average dumping margins calculated for the 
companies individually examined.
---------------------------------------------------------------------------

    \74\ See Certain Stilbenic Optical Brightening Agents From the 
People's Republic of China: Final Determination of Sales at Less 
Than Fair Value, 77 FR 17436, 17438 (March 26, 2012).
    \75\ See Initiation Notice, 77 FR at 3445.
---------------------------------------------------------------------------

Corroboration of Information

    Section 776(c) of the Act requires the Department to corroborate, 
to the extent practicable, secondary information used as facts 
available. Secondary information is defined as ``information derived 
from the petition that gave rise to the investigation or review, the 
final

[[Page 46040]]

determination concerning the subject merchandise, or any previous 
review under section 751 of the Act concerning the subject 
merchandise.'' \76\
---------------------------------------------------------------------------

    \76\ See Statement of Administrative Action accompanying the 
Uruguay Round Agreements Act (``SAA''), H. Doc. No. 316, 103d Cong., 
2d Session at 870 (1994).
---------------------------------------------------------------------------

    The SAA clarifies that ``corroborate'' means that the Department 
will satisfy itself that the secondary information to be used has 
probative value.\77\ The SAA also states that independent sources used 
to corroborate such evidence may include, for example, published price 
lists, official import statistics and customs data, and information 
obtained from interested parties during the particular 
investigation.\78\ To corroborate secondary information, the Department 
will, to the extent practicable, determine whether the information used 
has probative value by examining the reliability and relevance of the 
information.
---------------------------------------------------------------------------

    \77\ Id.
    \78\ Id.
---------------------------------------------------------------------------

    In order to determine the probative value of the dumping margins in 
the petition for use as AFA for purposes of this preliminary 
determination, the Department examined information on the record and 
found that it was unable to corroborate the margin contained in the 
petition. Therefore, for the preliminary determination, the Department 
has assigned to the PRC-wide entity the rate of 72.69 percent, which is 
the highest transaction-specific dumping margin for a mandatory 
respondent.\79\ It is unnecessary to corroborate this rate because it 
was obtained in the course of this investigation and, therefore, is not 
secondary information.\80\
---------------------------------------------------------------------------

    \79\ See, e.g., Multilayered Wood Flooring From the People's 
Republic of China: Final Determination of Sales at Less Than Fair 
Value, 76 FR 64318, 64322 (October 18, 2011) (assigning as an AFA 
rate the highest calculated transaction-specific rate among 
mandatory respondents).
    \80\ See section 776(c) of the Act and 19 CFR 351.308(c) and 
(d); Final Determination of Sales at Less Than Fair Value and 
Affirmative Determination of Critical Circumstances, in Part: Light-
Walled Rectangular Pipe and Tube from the People's Republic of 
China, 73 FR 35652, 35653 (June 24, 2008), and accompanying Issues 
and Decision Memorandum at Comment 1.
---------------------------------------------------------------------------

Date of Sale

    In identifying the date of sale of the merchandise under 
consideration, the Department will normally, in accordance with 19 CFR 
351.401(i), ``use the date of invoice, as recorded in the exporter or 
producer's records kept in the normal course of business.'' The date of 
sale is generally the date on which the parties agree upon all 
substantive terms of the sale. This normally includes the price, 
quantity, delivery terms and payment terms.\81\ Because CXS and Titan 
demonstrated that the substantive terms of sale were agreed upon on the 
invoice date, the Department has preliminarily determined to use 
invoice date as the date of sale.
---------------------------------------------------------------------------

    \81\ See, e.g., Carbon and Alloy Steel Wire Rod From Trinidad 
and Tobago: Final Results of Antidumping Duty Administrative Review, 
72 FR 62824 (November 7, 2007), and accompanying Issue and Decision 
Memorandum at Comment 1; Notice of Final Determinations of Sales at 
Less Than Fair Value; Certain Cold-Rolled Flat-Rolled Carbon Quality 
Steel Products from Turkey, 65 FR 15123 (March 21, 2000), and 
accompanying Issues and Decision Memorandum at Comment 1.
---------------------------------------------------------------------------

Fair Value Comparisons

    In accordance with section 777A(d)(1) of the Act, the Department 
compared the weighted-average price of the U.S. sales of the 
merchandise under consideration to the weighted-average NV to determine 
whether the mandatory respondents sold merchandise under consideration 
to the United States at LTFV during the POI.\82\
---------------------------------------------------------------------------

    \82\ See ``Export Price'' and ``Normal Value'' sections below.
---------------------------------------------------------------------------

Export Price

    In accordance with section 772(a) of the Act, the Department 
defined the U.S. price of merchandise under consideration based on the 
EP of the U.S. sales reported by CXS and Titan. The Department 
calculated the EP based on the prices at which merchandise under 
consideration was sold to unaffiliated purchasers in the United States. 
The Department preliminarily determined that the base rings sold by CXS 
and Titan during the POI are not covered by the scope of the 
investigation because they consist of only a single steel plate.\83\ 
Therefore, the Department did not include the base rings sold by CXS 
and Titan to the United States during the POI in the calculations of 
the weighted-average dumping margins.
---------------------------------------------------------------------------

    \83\ The scope of this investigation states that ``a wind tower 
section consists of, at a minimum, multiple steel plates rolled into 
cylindrical or conical shapes and welded together (or otherwise 
attached) to form a steel shell* * *.'' See ``Scope of the 
Investigation'' section above.
---------------------------------------------------------------------------

    The Department made deductions, as appropriate, from the reported 
U.S. price for movement expenses (i.e., domestic and foreign inland 
freight, domestic and foreign brokerage and handling, marine insurance, 
and international freight).\84\ The Department based movement expenses 
on surrogate values where the service was purchased from a PRC 
company.\85\ The Department also adjusted U.S. price, where applicable, 
by the value of certain materials provided free-of-charge by U.S. 
customers.
---------------------------------------------------------------------------

    \84\ See section 772(c)(2)(A) of the Act.
    \85\ See ``Factor Valuation Methodology'' section below.
---------------------------------------------------------------------------

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine NV using the FOP methodology if the merchandise is exported 
from an NME and the information does not permit the calculation of NV 
using home market prices, third-country prices, or constructed value 
under section 773(a) of the Act. The Department bases NV on FOPs 
because the presence of government controls on various aspects of NMEs 
renders price comparisons and the calculation of production costs 
invalid under the Department's normal methodologies.\86\ Therefore, in 
accordance with sections 773(c)(3) and (4) of the Act and 19 CFR 
351.408(c), the Department calculated NV based on FOPs. Under section 
773(c)(3) of the Act, FOPs include, but are not limited to: (1) Hours 
of labor required; (2) quantities of raw materials employed; (3) 
amounts of energy and other utilities consumed; and (4) representative 
capital costs.\87\
---------------------------------------------------------------------------

    \86\ See, e.g., Preliminary Determination of Sales at Less Than 
Fair Value, Affirmative Critical Circumstances, In Part, and 
Postponement of Final Determination: Certain Lined Paper Products 
from the People's Republic of China, 71 FR 19695, 19703 (April 17, 
2006), unchanged in Notice of Final Determination of Sales at Less 
Than Fair Value, and Affirmative Critical Circumstances, In Part: 
Certain Lined Paper Products From the People's Republic of China, 71 
FR 53079 (September 8, 2006).
    \87\ See section 773(c)(3)(A)-(D) of the Act.
---------------------------------------------------------------------------

Factor Valuation Methodology

    In accordance with section 773(c) of the Act, the Department 
calculated NV based on FOP data reported by the individually examined 
respondents. To calculate NV, the Department multiplied the reported 
per-unit factor-consumption rates by publicly available surrogate 
values. When selecting the surrogate values, the Department considered, 
among other factors, the quality, specificity, and contemporaneity of 
the data.\88\ As appropriate, the Department adjusted input prices by 
including freight costs to make them delivered prices. Specifically, 
the Department added a surrogate freight cost, where appropriate, to 
surrogate input values using the shorter of the reported

[[Page 46041]]

distance from the domestic supplier to the respondent's factory or the 
distance from the nearest seaport to the respondent's factory.\89\ A 
detailed description of all surrogate values used for CXS and Titan can 
be found in the Surrogate Value Memorandum.
---------------------------------------------------------------------------

    \88\ See, e.g., Certain New Pneumatic Off-the-Road Tires from 
the People's Republic of China: Final Affirmative Determination of 
Sales at Less Than Fair Value and Partial Affirmative Determination 
of Critical Circumstances, 73 FR 40485 (July 15, 2008), and 
accompanying Issues and Decision Memorandum at Comment 9.
    \89\ See Sigma Corp. v. United States, 117 F.3d 1401, 1407-08 
(Fed. Cir. 1997).
---------------------------------------------------------------------------

    For this preliminary determination, except as noted below, the 
Department used Ukrainian import data, as reported by the State Customs 
Committee of Ukraine and published by Global Trade Atlas (``GTA''), and 
other publicly available sources from Ukraine to calculate surrogate 
values for CXS's and Titan's FOPs and certain movement expenses. In 
accordance with section 773(c)(1) of the Act, the Department applied 
the best available information for valuing FOPs by selecting, to the 
extent practicable, surrogate values which are (1) Non-export average 
values, (2) contemporaneous with, or closest in time to, the POI, (3) 
product-specific, and (4) tax-exclusive.\90\ The record shows that 
Ukrainian import data obtained through GTA, as well as data from other 
Ukrainian sources, are product-specific, tax-exclusive, and generally 
contemporaneous with the POI.\91\ In those instances where the 
Department could not obtain information contemporaneous with the POI 
with which to value FOPs, the Department adjusted the surrogate values 
using, where appropriate, the Ukrainian producer price index as 
published in the International Monetary Fund's (``IMF'') International 
Financial Statistics.
---------------------------------------------------------------------------

    \90\ See, e.g., Notice of Preliminary Determination of Sales at 
Less Than Fair Value, Negative Preliminary Determination of Critical 
Circumstances and Postponement of Final Determination: Certain 
Frozen and Canned Warmwater Shrimp From the Socialist Republic of 
Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final 
Determination of Sales at Less Than Fair Value: Certain Frozen and 
Canned Warmwater Shrimp From the Socialist Republic of Vietnam, 69 
FR 71005 (December 8, 2004).
    \91\ See Surrogate Value Memorandum at 1-8.
---------------------------------------------------------------------------

    When calculating Ukrainian import-based, per-unit surrogate values, 
the Department disregarded import prices that it has reason to believe 
or suspect may be subsidized. It is the Department's practice, guided 
by the legislative history, not to conduct a formal investigation to 
ensure that such prices are not subsidized; rather, the Department 
bases its decision on information that is available to it at the time 
it makes its determination.\92\ In this case, the Department has reason 
to believe or suspect that prices of exports from India, Indonesia, 
South Korea, and Thailand may have been subsidized. The Department has 
found in other proceedings that these countries maintain broadly 
available, non-industry-specific export subsidies and, consequently, it 
is reasonable to infer that all exports from these countries to all 
markets may be subsidized.\93\ Therefore, the Department has not used 
data from these countries in calculating Ukraine's import-based 
surrogate values.
---------------------------------------------------------------------------

    \92\ See Omnibus Trade and Competitiveness Act of 1988, 
Conference Report, H.R. Rep. 100-576 at 590 (1988); Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination: Coated Free Sheet Paper from the People's 
Republic of China, 72 FR 30758, 30763 (June 4, 2007), unchanged in 
Final Determination of Sales at Less Than Fair Value: Coated Free 
Sheet Paper from the People's Republic of China, 72 FR 60632 
(October 25, 2007); Polyethylene Terephthalate Film, Sheet, and 
Strip from the People's Republic of China: Preliminary Determination 
of Sales at Less Than Fair Value, 73 FR 24552, 24559 (May 5, 2008), 
unchanged in PET Film, 73 FR at 55039.
    \93\ See Notice of Final Determination of Sales at Less Than 
Fair Value and Negative Final Determination of Critical 
Circumstances: Certain Color Television Receivers From the People's 
Republic of China, 69 FR 20594 (April 16, 2004), and accompanying 
Issues and Decision Memorandum at Comment 7; Carbazole Violet 
Pigment 23 from India: Final Results of the Expedited Five-year 
(Sunset) Review of the Countervailing Duty Order, 75 FR 13257 (March 
19, 2010), and accompanying Issues and Decision Memorandum at 4-5; 
Certain Cut-to-Length Carbon-Quality Steel Plate from Indonesia: 
Final Results of Expedited Sunset Review, 70 FR 45692 (August 8, 
2005), and accompanying Issues and Decision Memorandum at 4; 
Corrosion-Resistant Carbon Steel Flat Products from the Republic of 
Korea: Final Results of Countervailing Duty Administrative Review, 
74 FR 2512 (January 15, 2009), and accompanying Issues and Decision 
Memorandum at 17, 19-20; Final Affirmative Countervailing Duty 
Determination: Certain Hot-Rolled Carbon Steel Flat Products From 
Thailand, 66 FR 50410 (October 3, 2001), and accompanying Issues and 
Decision Memorandum at ``II. Programs Determined to Confer 
Subsidies.''
---------------------------------------------------------------------------

    Additionally, the Department disregarded data from NME countries 
when calculating Ukraine's import-based per-unit surrogate values. The 
Department also excluded from the calculation of Ukraine's import-based 
per-unit surrogate values imports that were labeled as originating from 
an ``unidentified'' country because the Department could not be certain 
that these imports were not from either an NME country or a country 
with generally available export subsidies.\94\
---------------------------------------------------------------------------

    \94\ See Notice of Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination: Chlorinated 
Isocyanurates From the People's Republic of China, 69 FR 75294, 
75301 (December 16, 2004), unchanged in Notice of Final 
Determination of Sales at Less Than Fair Value: Chlorinated 
Isocyanurates From the People's Republic of China, 70 FR 24502 (May 
10, 2005).
---------------------------------------------------------------------------

    When a respondent sources inputs that were produced in an ME from 
an ME supplier in meaningful quantities (i.e., not insignificant 
quantities) and pays in an ME currency, the Department uses the actual 
price paid by the respondent to value those inputs, except when prices 
may have been distorted by findings of dumping in the PRC and/or 
subsidies.\95\ CXS and Titan claimed that certain of their reported 
inputs were purchased in ME countries and paid for in ME currencies. 
However, CXS and Titan were unable to demonstrate that these inputs 
were produced in ME countries. Therefore, the Department did not use 
CXS's and Titan's reported ME purchase prices to value those inputs; 
rather, the Department based the value of these inputs on surrogate 
values.\96\
---------------------------------------------------------------------------

    \95\ See 19 CFR 351.408(c)(1); Antidumping Duties; 
Countervailing Duties, 62 FR at 27366; Hand Trucks and Certain Parts 
Thereof From the People's Republic of China: Final Results of 
Antidumping Duty Administrative Review, 77 FR 41744 (July 16, 2012), 
and accompanying Issues and Decision Memorandum at Comment 1.
    \96\ See Surrogate Value Memorandum at 3-4.
---------------------------------------------------------------------------

    On June 21, 2011, the Department revised its methodology for 
valuing the labor input in NME AD proceedings.\97\ In Labor 
Methodologies, the Department determined that the best methodology to 
value the labor input is to use industry-specific labor rates from the 
primary surrogate country. Additionally, the Department determined that 
the best data source for industry-specific labor rates is Chapter 6A: 
Labor Cost in Manufacturing from the International Labor Organization 
(``ILO'') Yearbook of Labor Statistics (``Yearbook'').
---------------------------------------------------------------------------

    \97\ See Antidumping Methodologies in Proceedings Involving Non-
Market Economies: Valuing the Factor of Production: Labor, 76 FR 
36092 (June 21, 2011) (``Labor Methodologies'').
---------------------------------------------------------------------------

    In this preliminary determination, the Department valued labor 
using the methodology described in Labor Methodologies. Specifically, 
to value the respondents' labor input, the Department relied on labor 
cost data reported by Ukraine to the ILO in Chapter 6A of the Yearbook. 
Although the Department found that the two-digit description under 
ISIC-Revision 3-D (``28-Manufacture of fabricated metal products, 
except machinery and equipment'') is the best available information on 
the record with which to value labor because it is specific to 
industries that produce merchandise comparable to the merchandise under 
consideration, Ukraine has never reported Chapter 6A data specific to 
this two-digit description. Ukraine did, however, report total 
manufacturing labor cost data in 2006. Accordingly, the Department 
relied on Chapter 6A of the Yearbook to calculate the labor value using 
total manufacturing labor cost data reported by Ukraine to the ILO in

[[Page 46042]]

2006.\98\ Because these labor cost data are not contemporaneous with 
the POI, the Department adjusted the average value for inflation using 
the Ukrainian consumer price index as published in the IMF's 
International Financial Statistics.\99\
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    \98\ See, e.g., Galvanized Steel Wire From the People's Republic 
of China: Preliminary Determination of Sales at Less Than Fair Value 
and Postponement of Final Determination, 76 FR 68407, 68419 
(November 4, 2011), unchanged in Galvanized Steel Wire From the 
People's Republic of China: Final Determination of Sales at Less 
Than Fair Value, 77 FR 17430 (March 26, 2012); section 773(c)(4) of 
the Act; Surrogate Value Memorandum at 5, Attachment 6.
    \99\ See Surrogate Value Memorandum at Attachment 3.
---------------------------------------------------------------------------

    The ILO data from Chapter 6A of the Yearbook reflects all costs 
related to labor, including wages, and indirect labor costs such as 
benefits, housing, and training. The financial statements used to 
calculate the surrogate financial ratios included itemized details 
regarding the indirect labor costs incurred. Therefore, the Department 
has made adjustments to the surrogate financial ratios.\100\
---------------------------------------------------------------------------

    \100\ Id. at Attachment 7.
---------------------------------------------------------------------------

    The Department valued electricity using the average of the monthly 
POI tariff rates from the National Electricity Regulatory Commission of 
Ukraine.\101\ The Department did not adjust the value for inflation 
because these tariff rates were current during the POI.
---------------------------------------------------------------------------

    \101\ Id. at 4-5, Attachment 4.
---------------------------------------------------------------------------

    The Department valued water using Utilities Ministry of Ukraine 
data published on the World of Public Services Web site, available at 
http://gkh.com.ua/gkh/full-news-gkh/view11692.\102\ The Department did 
not adjust the value for inflation because these water rates were 
current during the POI.
---------------------------------------------------------------------------

    \102\ Id. at 5, Attachment 5 (last visited on July 20, 2012).
---------------------------------------------------------------------------

    The Department valued truck freight using Ukrainian January 2012 
data published on the Web site of Della Trucking, a Ukrainian trucking 
company, available at www.della-ua.com.\103\ The Department deflated 
this rate using the Ukrainian producer price index as published in the 
IMF's International Financial Statistics.\104\
---------------------------------------------------------------------------

    \103\ Id. at 7, Attachment 10 (last visited on July 20, 2012).
    \104\ Id. at Attachment 3.
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    The Department was unable to identify a surrogate value explicitly 
for inland water freight in Ukraine. Therefore, the Department valued 
inland water freight using South African data in an article published 
by the Human Sciences Research Council, a South African research 
agency.\105\ The Department adjusted this rate for inflation using the 
South African producer price index as published in the IMF's 
International Financial Statistics.\106\
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    \105\ See Francois J. Botes, ``The Impact of Transport Pricing 
Practices in South Africa on Freight Transport Costs'' Human 
Sciences Research Council--Centre for Poverty and Growth (2005); 
Surrogate Value Memorandum at 8.
    \106\ See Surrogate Value Memorandum at Attachment 12.
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    The Department valued international ocean freight from the PRC to 
the United States using data obtained from the Descartes Carrier Rate 
Retrieval Database (``Descartes''), available at 
www.descartes.com.\107\
---------------------------------------------------------------------------

    \107\ Id. at 7-8, Attachment 11 (last visited on July 20, 2012).
---------------------------------------------------------------------------

    The Department valued marine insurance using a marine insurance 
rate offered by RJG Consultants.\108\ RJG Consultants is an ME provider 
of marine insurance. The rate is a percentage of the value of the 
shipment; therefore, the Department did not inflate or deflate the 
rate.
---------------------------------------------------------------------------

    \108\ Id. at 8, Attachment 13.
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    The Department valued brokerage and handling using a price list for 
export procedures necessary to export a standardized cargo of goods 
from Ukraine in a 20-foot container.\109\ The price list was published 
in the World Bank publication, Doing Business 2012: Ukraine. The 
Department adjusted this rate by the ratio of the capacity of a 40-foot 
high flat rack relative to the cargo weight of a 20-foot container in 
order to derive the per-unit brokerage and handling cost for a 40-foot 
high flat rack.\110\ The Department did not inflate this rate since it 
is contemporaneous with the POI.
---------------------------------------------------------------------------

    \109\ Id. at 7, Attachment 8.
    \110\ Id. at 7, Attachments 8-9.
---------------------------------------------------------------------------

    The Department was unable to identify surrogate financial 
statements for a Ukrainian producer of the merchandise under 
consideration or merchandise comparable to the merchandise under 
consideration. Therefore, the Department used audited financial 
statements from Mazor Group Limited, a South African producer of 
merchandise comparable to the merchandise under consideration, to value 
factory overhead, selling, general, and administrative expenses, and 
profit.\111\ These financial statements cover the fiscal year ending 
February 2012 and, therefore, are contemporaneous with the POI.
---------------------------------------------------------------------------

    \111\ Id. at 6, Attachment 7.
---------------------------------------------------------------------------

Currency Conversion

    In accordance with section 773A(a) of the Act, the Department made 
currency conversions into U.S. dollars, where necessary, based on the 
exchange rates in effect on the dates of the U.S. sales as certified by 
the Federal Reserve Bank.

Verification

    As provided in section 782(i)(1) of the Act, the Department intends 
to verify the information submitted by CXS and Titan.

Combination Rates

    As announced in the Initiation Notice,\112\ the Department has 
calculated combination rates for the respondents that are eligible for 
a separate rate in this investigation. This practice is described in 
Policy Bulletin 05.1.\113\
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    \112\ See Initiation Notice, 77 FR at 3445-46.
    \113\ See Policy Bulletin 05.1.
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Preliminary Determination

    The Department has preliminarily determined that the following 
weighted-average dumping margins exist for the period April 2011 
through September 2011:

------------------------------------------------------------------------
                                                            Weighted-
                                                             Average
             Exporter                    Producer        Dumping  Margin
                                                                (%)
------------------------------------------------------------------------
Chengxi Shipyard Co., Ltd........  Chengxi Shipyard               30.93
                                    Co., Ltd.
Titan Wind Energy (Suzhou) Co.,    Titan (Lianyungang)            20.85
 Ltd.                               Metal Product Co.,
                                    Ltd.
Titan Wind Energy (Suzhou) Co.,    Titan Wind Energy              20.85
 Ltd.                               (Suzhou) Co., Ltd.
CS Wind Corporation..............  CS Wind China Co.,             26.25
                                    Ltd.
Guodian United Power Technology    Guodian United Power           26.25
 Baoding Co., Ltd.                  Technology Baoding
                                    Co., Ltd.
Sinovel Wind Group Co., Ltd......  Sinovel Wind Group             26.25
                                    Co., Ltd.
PRC-Wide Entity..................  ....................           72.69
------------------------------------------------------------------------


[[Page 46043]]

Disclosure

    In accordance with 19 CFR 351.224(b), the Department will disclose 
the calculations performed in this investigation to parties within five 
days of the date of publication of this notice in the Federal Register.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, the Department will 
instruct U.S. Customs and Border Protection (``CBP'') to suspend 
liquidation of all entries of wind towers from the PRC, as described in 
the ``Scope of the Investigation'' section, entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register.
    Pursuant to 19 CFR 351.205(d), the Department will instruct CBP to 
require a cash deposit equal to the weighted-average amount by which NV 
exceeds U.S. price, adjusted where appropriate for export subsidies, as 
follows: (1) The separate rate for the exporter/producer combinations 
listed in the table above will be the rate the Department has 
determined in this preliminary determination; (2) for all combinations 
of PRC exporters/producers of merchandise under consideration which 
have not received their own separate rate above, the cash-deposit rate 
will be the rate for the PRC-wide entity; and (3) for all non-PRC 
exporters of merchandise under consideration which have not received 
their own separate rate above, the cash-deposit rate will be the rate 
applicable to the PRC exporter/producer combination that supplied that 
non-PRC exporter.
    For exporter/producer combinations receiving a separate rate based 
on the rates calculated for the mandatory respondents in an AD 
determination, it is the Department's practice to instruct CBP to 
require a cash deposit equal to the amount by which the NV exceeds the 
U.S. price, reduced by the lesser of the export subsidy rate applicable 
to each exporter or the average of the export subsidy rates applicable 
to the mandatory respondents on which the separate rate in the AD 
determination is based.\114\ In this case, the average of the export 
subsidy rates applicable to the mandatory respondents on which the 
separate rate is based is 0.0075 percent, which is lower than CS Wind's 
0.03 percent export subsidy rate and the 0.015 percent export subsidy 
rate applicable to Sinovel and Guodian,\115\ However, because this rate 
is less than 0.01 percent, the Department will not adjust CS Wind, 
Sinovel, and Guodian's cash deposit rate for export subsidies.
---------------------------------------------------------------------------

    \114\ See Certain Steel Wheels From the People's Republic of 
China: Notice of Final Determination of Sales at Less Than Fair 
Value and Partial Affirmative Final Determination of Critical 
Circumstances, 77 FR 17021, 17026 (March 23, 2012); Modification of 
Regulations Regarding the Practice of Accepting Bonds During the 
Provisional Measures Period in Antidumping and Countervailing Duty 
Investigations, 76 FR 61042 (October 3, 2011).
    \115\ In the companion countervailing duty (``CVD'') 
investigation, the Department preliminarily determined that the 
merchandise under consideration exported by CS Wind, a mandatory 
respondent in the CVD investigation and separate rate recipient in 
this preliminary AD determination, benefitted from an export subsidy 
of 0.03 percent. See Utility Scale Wind Towers From the People's 
Republic of China: Preliminary Affirmative Countervailing Duty 
Determination, 77 FR 33422, 33432 (June 6, 2012). The Department, 
however, did not find evidence in the preliminary CVD determination 
that Titan, the other mandatory respondent in the CVD investigation 
and a mandatory respondent in this AD investigation, benefitted from 
an export subsidy. To calculate the ``All Others Rate'' in the 
preliminary CVD determination, the Department used a simple average 
of the rates of the two mandatory respondents. Therefore, the ``All 
Others Rate'' included an export subsidy rate equal to the average 
of the CVD export subsidy rates applicable to the mandatory 
respondents (i.e., 0.015 percent).
---------------------------------------------------------------------------

    With regard to CXS, a mandatory respondent in this AD investigation 
that received the ``All Others Rate'' in the companion CVD case, the 
Department will instruct CBP to require a cash deposit equal to the 
amount by which the NV exceeds the U.S. price, reduced by the export 
subsidy rate applicable to CXS (i.e., 0.015 percent).
    These cash deposit instructions will remain in effect until further 
notice.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, the Department has 
notified the ITC of this preliminary affirmative determination of sales 
at LTFV. Section 735(b) of the Act requires the ITC to make its final 
determination as to whether the domestic industry in the United States 
is materially injured, or threatened with material injury, by reason of 
imports, or sales (or the likelihood of sales) for importation, of the 
merchandise under consideration within 45 days of the Department's 
final determination.

Public Comment

    Case briefs or other written comments may be submitted to the 
Department no later than seven days after the date on which the final 
verification report is issued in this proceeding. Rebuttal briefs, 
limited to the issues raised in case briefs, may be submitted no later 
than five days after the deadline for case briefs.\116\ A table of 
contents, list of authorities used, and an executive summary of issues 
should accompany any briefs submitted to the Department. The executive 
summary should be limited to five pages total, including footnotes.
---------------------------------------------------------------------------

    \116\ See 19 CFR 351.309(c)(1)(i) and (d).
---------------------------------------------------------------------------

    In accordance with section 774 of the Act, the Department will hold 
a public hearing, if requested, to afford interested parties an 
opportunity to comment on arguments raised in case or rebuttal briefs. 
Interested parties, who wish to request a hearing, or to participate if 
one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, filed 
electronically using Import Administration's Antidumping and 
Countervailing Duty Centralized Electronic Service System (``IA 
ACCESS''). An electronically filed document must be received 
successfully in its entirety by the Department's electronic records 
system, IA ACCESS, by 5 p.m. Eastern Standard Time, within 30 days 
after the date of publication of this notice.\117\ Requests should 
contain the party's name, address, and telephone number, the number of 
participants, and a list of the issues to be discussed. If a request 
for a hearing is made, the Department intends to hold the hearing at 
the U.S. Department of Commerce, 14th Street and Constitution Avenue 
NW., Washington, DC 20230, at a time and location to be determined. 
Parties should confirm by telephone the date, time, and location of the 
hearing two days before the scheduled date.
---------------------------------------------------------------------------

    \117\ See 19 CFR 351.310(c).
---------------------------------------------------------------------------

Postponement of Final Determination and Extension of Provisional 
Measures

    In June 2012, Titan and CXS requested, pursuant to section 
735(a)(2) of the Act, that the Department postpone its final 
determination by 60 days.\118\ Additionally, Titan and CXS requested, 
pursuant to 19 CFR 351.210(e)(2), that the Department extend the 
application of the provisional measures from a four-month period to a 
six-month period. In accordance with section 735(a) of the Act and 19 
CFR 351.210(b), the Department is granting these requests to postpone 
the final determination until no later than 135 days after the 
publication of this notice in the Federal Register because (1) The 
preliminary determination is affirmative, (2) the requesting exporters 
account for a

[[Page 46044]]

significant proportion of exports of the merchandise under 
consideration, and (3) there are no compelling reasons to deny these 
requests. Suspension of liquidation will be extended accordingly. The 
Department is further extending the application of the provisional 
measures from a four-month period to a six-month period.
---------------------------------------------------------------------------

    \118\ See Letter from Titan to the Secretary of Commerce, 
``Utility Scale Wind Towers from the People's Republic of China; 
Request to Extend Final Determination'' (June 15, 2012); Letter from 
CXS to the Secretary of Commerce, ``Utility Scale Wind Towers from 
the People's Republic of China: Request by Chengxi Shipyard Co., 
Ltd. For Postponement of the Final Determination'' (June 21, 2012).
---------------------------------------------------------------------------

    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: July 26, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2012-18929 Filed 8-1-12; 8:45 am]
BILLING CODE 3510-DS-P