[Federal Register Volume 77, Number 206 (Wednesday, October 24, 2012)]
[Notices]
[Pages 64955-64959]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-26220]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-987]


Hardwood and Decorative Plywood From the People's Republic of 
China: Initiation of Countervailing Duty Investigation

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

DATES: Effective Date: October 24, 2012.

FOR FURTHER INFORMATION CONTACT: David Lindgren and Toni Page, AD/CVD 
Operations, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue NW., 
Washington, DC 20230; telephone: (202) 482-3870 and (202) 482-1398, 
respectively.

SUPPLEMENTARY INFORMATION: 

The Petition

    On September 27, 2012, the Department of Commerce (Department) 
received a countervailing duty (CVD) petition concerning imports of 
hardwood and decorative plywood from the People's Republic of China 
(PRC) \1\ filed in proper form by the Coalition for Fair Trade of 
Hardwood Plywood and its individual members (Petitioners).\2\ On 
October 3, 2012, the Department issued requests to Petitioners for 
additional information and for clarification of certain areas of the 
CVD Petition. Petitioners informed the Department on October 10, 2012, 
that they would not provide any additional information regarding the 
matter raised by the Department.
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    \1\ See Petition for the Imposition of Antidumping and 
Countervailing Duties: Hardwood Plywood from the People's Republic 
of China, dated September 27, 2012 (Petition).
    \2\ The members of the Coalition for Fair Trade of Hardwood 
Plywood are: Columbia Forest Products, Commonwealth Plywood Inc., 
Murphy Plywood, Roseburg Forest Products Co., States Industries 
Inc., and Timber Products Company.
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    In accordance with section 702(b)(1) of the Tariff Act of 1930, as 
amended (Act), Petitioners allege that producers/exporters of hardwood 
and decorative plywood from the PRC received countervailable subsidies 
within the meaning of sections 701 and 771(5) of the Act, and that 
imports from these producers/exporters materially injure, or threaten 
material injury to, an industry in the United States.
    The Department finds that Petitioners filed the Petition on behalf 
of the domestic industry because Petitioners are interested parties, as 
defined in section 771(9)(C) of the Act, and have demonstrated 
sufficient industry support with respect to the investigation that it 
requests the Department to initiate.\3\
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    \3\ See ``Determination of Industry Support for the Petition'' 
below.
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Period of Investigation

    The period of investigation is January 1, 2011, through December 
31, 2011.

Scope of Investigation

    The products covered by this investigation are hardwood and 
decorative plywood from the PRC. For a full description of the scope of 
the investigation, please see the ``Scope of

[[Page 64956]]

the Investigation'' Appendix I to this notice.

Comments on Scope of Investigation

    During our review of the Petition, we discussed the scope with 
Petitioners to ensure that it is an accurate reflection of the products 
for which the domestic industry is seeking relief. As a result, the 
``Scope of Investigation'' language has been modified from the language 
in the Petition to reflect these clarifications.\4\
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    \4\ See October 15, 2012, letter from Petitioner regarding 
Hardwood Plywood from the People's Republic of China: Petitioner's 
Revision to the Proposed Scope of Investigations.
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    Moreover, as discussed in the preamble to the regulations,\5\ we 
are setting aside a period of time for interested parties to raise 
issues regarding product coverage. The Department encourages interested 
parties to submit such comments by 5:00 p.m. EST on Tuesday, November 
6, 2012, which is twenty calendar days from the signature date of this 
notice. All comments must be filed on the records of both the PRC 
antidumping duty (AD) investigation as well as the PRC CVD 
investigation.
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    \5\ See Antidumping Duties; Countervailing Duties, 62 FR 27296, 
27323 (May 19, 1997).
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Filing Requirements

    All submissions to the Department must be 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 the time and date 
set by the Department. Documents excepted from the electronic 
submission requirements must be filed manually (i.e., in paper form) 
with the Import Administration's APO/Dockets Unit, Room 1870, U.S. 
Department of Commerce, 14th Street and Constitution Avenue NW., 
Washington, DC 20230, and stamped with the date and time of receipt by 
the deadline noted above.\6\
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    \6\ See http://www.gpo.gov/fdsys/pkg/FR-2011-07-06/pdf/2011-16352.pdf for details of the Department's Electronic Filing 
Requirements, which went into effect on August 5, 2011. Information 
on help using IA ACCESS can be found at https://iaaccess.trade.gov/help.aspx and a handbook can be found at https://iaaccess.trade.gov/help/Handbook%20on%20Electronic%20Filing%20Procedures.pdf.
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Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, on September 28, 
2012, the Department invited representatives of the Government of the 
PRC (GOC) for consultations with respect to the CVD petition.\7\ Those 
consultations were held on October 15, 2012.\8\
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    \7\ See Letter to Wang Xin, Embassy of the PRC regarding 
``Countervailing Duty Petition on Hardwood Plywood from the People's 
Republic of China,'' dated September 28, 2012.
    \8\ See Ex-Parte Memorandum on Consultations with Officials from 
the Government of the People's Republic of China on the 
Countervailing Duty Petition regarding Hardwood Plywood, dated 
October 16, 2012.
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Determination of Industry Support for the Petition

    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (i) At least 
25 percent of the total production of the domestic like product; and 
(ii) more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support 
for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of 
the Act provides that, if the petition does not establish support of 
domestic producers or workers accounting for more than 50 percent of 
the total production of the domestic like product, the Department 
shall: (i) poll the industry or rely on other information in order to 
determine if there is support for the petition, as required by 
subparagraph (A); or (ii) determine industry support using a 
statistically valid sampling method to poll the industry.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The U.S. International Trade Commission 
(``ITC''), which is responsible for determining whether ``the domestic 
industry'' has been injured, must also determine what constitutes a 
domestic like product in order to define the industry. While both the 
Department and the ITC must apply the same statutory definition 
regarding the domestic like product (see section 771(10) of the Act), 
they do so for different purposes and pursuant to a separate and 
distinct authority. In addition, the Department's determination is 
subject to limitations of time and information. Although this may 
result in different definitions of the like product, such differences 
do not render the decision of either agency contrary to law. See USEC, 
Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 2001) (citing Algoma 
Steel Corp., Ltd. v. United States, 688 F. Supp. 639, 644 (CIT 1988), 
aff'd 865 F.2d 240 (Fed. Cir. 1989)).
    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition).
    With regard to the domestic like product, Petitioners do not offer 
a definition of domestic like product distinct from the scope of the 
investigations. Based on our analysis of the information submitted on 
the record, we have determined that hardwood and decorative plywood 
constitutes a single domestic like product and we have analyzed 
industry support in terms of that domestic like product. For a 
discussion of the domestic like product analysis in this case, see 
``Countervailing Duty Investigation Initiation Checklist: Hardwood and 
Decorative Plywood from the People's Republic of China'' (``Initiation 
Checklist''), at Attachment II, Analysis of Industry Support for the 
Petitions Covering Hardwood and Decorative Plywood from the People's 
Republic of China, on file in the Central Records Unit (CRU), Room 7046 
of the main Department of Commerce building.
    In determining whether Petitioners have standing under section 
702(c)(4)(A) of the Act, we considered the industry support data 
contained in the Petition with reference to the domestic like product 
as defined in the ``Scope of Investigation'' section above. To 
establish industry support, Petitioners provided their production of 
the domestic like product in 2011 and compared this to the estimated 
total production of the domestic like product for the entire domestic 
industry. See Volume I of the Petitions, at 3-5, and Exhibits I-3A, I-
3B, and I-3C; see also Supplement to the CVD Petition dated October 5, 
2012, at 3 and Exhibit I-9; see also Second Supplement to the CVD 
Petition dated October 9, 2012, at 2-8. Petitioners estimated 2011 
production of the domestic like product by non-petitioning companies 
based on their knowledge of the industry. We have relied upon data 
Petitioners provided for purposes of measuring industry support. For 
further discussion, see Initiation Checklist at Attachment II.

[[Page 64957]]

    On October 9, 2012, we received a submission on behalf of an 
importer of hardwood and decorative plywood, an interested party to 
this proceeding as defined in section 771(9)(A) of the Act, questioning 
the industry support calculation. On October 11, 2012, we received a 
second submission on behalf of that importer of hardwood and decorative 
plywood, supplementing the importer's October 9, 2012, challenge to 
Petitioners' industry support calculation. On October 15, 2012, 
Petitioners filed their response to the importer's industry support 
challenge.\9\ On October 16, 2012, we received a third submission on 
behalf of the importer of hardwood and decorative plywood. On October 
17, 2012, Petitioners submitted an additional response to the 
importer's industry support challenge.
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    \9\ For further discussion of these submissions, see Initiation 
Checklist at Attachment II.
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    Based on information provided in the Petition, supplemental 
submissions, and other information readily available to the Department, 
we determine that Petitioners have met the statutory criteria for 
industry support under section 702(c)(4)(A)(i) of the Act because the 
domestic producers (or workers) who support the Petition account for at 
least 25 percent of the total production of the domestic like product. 
See Initiation Checklist at Attachment II. Based on information 
provided in the Petition and supplemental submissions, the domestic 
producers and workers have met the statutory criteria for industry 
support under section 702(c)(4)(A)(ii) of the Act because the domestic 
producers (or workers) who support the Petition account for more than 
50 percent of the production of the domestic like product produced by 
that portion of the industry expressing support for, or opposition to, 
the Petition. Accordingly, the Department determines that the Petition 
was filed on behalf of the domestic industry within the meaning of 
section 702(b)(1) of the Act. See Initiation Checklist at Attachment 
II.
    The Department finds that Petitioners filed the Petition on behalf 
of the domestic industry because they are interested parties as defined 
in sections 771(9)(C), (E), and (F) of the Act and they have 
demonstrated sufficient industry support with respect to the CVD 
investigation that they are requesting the Department initiate. Id.

Injury Test

    Because the PRC is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, section 701(a)(2) of the Act 
applies to this investigation. Accordingly, the ITC must determine 
whether imports of the subject merchandise from the PRC materially 
injure, or threaten material injury to, a U.S. industry.

Allegations and Evidence of Material Injury and Causation

    Petitioners allege that imports of the subject merchandise are 
benefitting from countervailable subsidies and that such imports are 
causing, or threaten to cause, material injury to the U.S. industry 
producing the domestic like product. In addition, Petitioners allege 
that subject imports exceed the negligibility threshold provided for 
under section 771(24)(A) of the Act.
    Petitioners contend that the industry's injured condition is 
illustrated by reduced market share; underselling and price depression 
or suppression; lost sales and revenue; reduced capacity and capacity 
utilization; increased inventories; decline in financial performance; 
and employment data. See Volume I of the Petition, at 14-57 and 
Exhibits I-9 through I-27, and Supplement to the AD Petition, at 1, 3-
4, and Exhibits Supp I-2 through Supp I-4. We have assessed the 
allegations and supporting evidence regarding material injury, threat 
of material injury, and causation, and we have determined that these 
allegations are properly supported by adequate evidence and meet the 
statutory requirements for initiation. See Initiation Checklist, at 
Attachment III.

Initiation of Countervailing Duty Investigation

    Section 702(b)(1) of the Act requires the Department to initiate a 
CVD proceeding whenever an interested party files a petition on behalf 
of an industry that: (1) Alleges the elements necessary for an 
imposition of a duty under section 701(a) of the Act; and (2) is 
accompanied by information reasonably available to the petitioner(s) 
supporting the allegations. The Department has examined the Petition on 
hardwood and decorative plywood from the PRC and finds that it complies 
with the requirements of section 702(b) of the Act. Therefore, in 
accordance with section 702(b) of the Act, we are initiating a CVD 
investigation to determine whether manufacturers, producers, or 
exporters of hardwood and decorative plywood in the PRC receive 
countervailable subsidies. For a discussion of evidence supporting our 
initiation determination, see the CVD Initiation Checklist.
    We are including in our investigation the following programs 
alleged in the Petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in the PRC:

A. Income Tax Programs
    1. Tax Exemptions and Reductions for ``Productive'' Foreign 
Invested Enterprises (FIEs) (i.e., the ``Two Free, Three Half'' 
Program)
    2. Provincial Tax Exemptions and Reductions for ``Productive'' FIEs
    3. Tax Reductions for FIEs in Designated Geographic Locations
B. Other Tax Programs
    1. VAT and Tariff Exemptions on Imported Equipment
C. Government Provision of Goods or Services For Less Than Adequate 
Remuneration (LTAR)
    1. Electricity

    We are not including in our investigation the following program 
alleged to benefit producers and exporters of the subject merchandise 
in the PRC:
1. Provision of Timber at LTAR
For further information explaining why the Department is not 
investigating this program, see CVD Initiation Checklist.

Respondent Selection

    For this investigation, the Department expects to select 
respondents based on U.S. Customs and Border Protection (CBP) data for 
U.S. imports during the period of investigation. We intend to make our 
decision regarding respondent selection within 20 days of publication 
of this Federal Register notice. The Department invites comments 
regarding the CBP data and respondent selection within seven calendar 
days of publication of this Federal Register notice.

Distribution of Copies of the Petition

    In accordance with section 702(b)(4)(A)(i) of the Act and 19 CFR 
351.202(f), a copy of the public version of the Petition has been 
provided to the representatives of the GOC. Because of the particularly 
large number of producers/exporters identified at Exhibit I-7 of the 
Petition, the Department considers the service of the public version of 
the Petition to the foreign producers/exporters satisfied by the 
delivery of the public version to the GOC, consistent with 19 CFR 
351.203(c)(2).

ITC Notification

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

Preliminary Determination by the ITC

    The ITC will preliminarily determine, within 45 days after the date 
on which

[[Page 64958]]

the Petition is filed, whether there is a reasonable indication that 
imports of subsidized hardwood and decorative plywood from the PRC are 
causing material injury, or threatening to cause material injury, to a 
U.S. industry.\10\ A negative ITC determination will result in the 
investigation being terminated; otherwise, the investigation will 
proceed according to statutory and regulatory time limits.
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    \10\ See section 703(a)(2) of the Act.
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Notification to Interested Parties

    Interested parties must submit applications for disclosure under 
protective orders in accordance with 19 CFR 351.305. On January 22, 
2008, the Department published Antidumping and Countervailing Duty 
Proceedings: Documents Submission Procedures; APO Procedures, 73 FR 
3634. Parties wishing to participate in this investigation should 
ensure that they meet the requirements of these procedures (e.g., the 
filing of letters of appearance as discussed at 19 CFR 351.103(d)).
    Any party submitting factual information in an AD or CVD proceeding 
must certify to the accuracy and completeness of that information.\11\ 
Parties are hereby reminded that revised certification requirements are 
in effect for company/government officials as well as their 
representatives in all segments of any AD or CVD proceedings initiated 
on or after March 14, 2011.\12\ The formats for the revised 
certifications are provided at the end of the Interim Final Rule. 
Foreign governments and their officials may continue to submit 
certifications in either the format that was in use prior to the 
effective date of the Interim Final Rule, or in the format provided in 
the Interim Final Rule.\13\ The Department intends to reject factual 
information submissions in any proceeding segments initiated on or 
after March 14, 2011, if the submitting party does not comply with the 
revised certification requirements.
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    \11\ See section 782(b) of the Act.
    \12\ See Certification of Factual Information for Import 
Administration during Antidumping and Countervailing Duty 
Proceedings: Interim Final Rule, 76 FR 7491 (February 10, 2011) 
(Interim Final Rule), amending 19 CFR 351.303(g)(1) and (2).
    \13\ See Certification of Factual Information to Import 
Administration During Antidumping and Countervailing Duty 
Proceedings: Supplemental Interim Final Rule, 76 FR 54697 (September 
2, 2011).
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    This notice is issued and published pursuant to section 777(i) of 
the Act.

     Dated: October 17, 2012--.
Paul Piquado,
Assistant Secretary for Import Administration.

Appendix I

Scope of the Investigation

    Hardwood and decorative plywood is a panel composed of an 
assembly of two or more layers or plies of wood veneer(s) in 
combination with a core. The several layers, along with the core, 
are glued or otherwise bonded together to form a finished product. A 
hardwood and decorative plywood panel can be composed of one or more 
species of hardwoods, softwoods, or bamboo, (in addition to other 
materials that are used for the core, as detailed below).
    Hardwood and decorative plywood is generally manufactured to 
American National Standard for Hardwood and Decorative Plywood, 
ANSI/HPVA HP-1-2009; it is differentiated from ``structural 
plywood'' (also known as ``industrial plywood'' or ``industrial 
panels''), which must meet the ``bond performance'' requirements set 
forth at paragraph 5.8.6.4 of U.S. Products Standard PS 1-09 for 
Structural Plywood.
    Hardwood and decorative plywood is primarily manufactured as a 
panel. The most common panel sizes are 1219 x 1829 mm (48 x 72 
inches), 1219 x 2438 mm (48 x 96 inches), and 1219 x 3048 mm (48 x 
120 inches). However, these panels may be cut-to-size by the 
manufacturer in accordance with a customer's requirements, or made 
to other sizes.
    A ``veneer'' is a thin slice of wood, rotary cut, sliced or 
sawed from a log, bolt or flitch. The face veneer is the exposed 
veneer of a hardwood and decorative plywood product which is of a 
superior grade than that of the other exposed veneer of the product 
(i.e., as opposed to the inner veneers). The face veneer is also 
either side of the product when the two exposed veneers are of the 
same grade. The face veneer is also the side of the product that is 
intended to be exposed for view after installation.
    The core of hardwood and decorative plywood consists of the 
layer or layers of material(s) that are situated between the front 
and back veneers. The core may be composed of a range of materials, 
including but not limited to veneers, particleboard, and medium-
density fiberboard (MDF).
    All hardwood and decorative plywood is included within the 
definition of subject merchandise regardless whether or not the face 
and/or back veneers are surface coated. Additionally, the face 
veneer of hardwood and decorative plywood may be sanded, smoothed or 
given a ``distressed'' appearance through such methods as hand-
scraping or wire brushing. The face veneer may also be stained 
(i.e., to achieve a particular color).
    Unless subject to a specifically enumerated exclusion detailed 
below, all hardwood and decorative plywood is included within the 
definition of subject merchandise, without regard to: dimension 
(overall thickness, thickness of face veneer thickness of back 
veneer, thickness of core, and thickness of inner veneers; width; 
and length); wood species used for the face, back and inner veneers 
(including hardwoods, softwoods or bamboo); core composition; the 
grade of the face and back veneers; and whether or not surface 
coated (i.e., ``unfinished'' or ``prefinished''). The face and/or 
back veneers of the product may be sanded, smoothed, scraped or 
stained.
    Hardwood and decorative plywood is generally manufactured to 
American National Standard for Hardwood and Decorative Plywood, 
ANSI/HPVA HP-1-2009. Regardless of whether the product meets the 
ANSI/HPVA standard, all hardwood and decorative plywood is included 
within this definition if it meets the physical description set 
forth therein.
    The scope of the investigation excludes the following items: (1) 
Structural plywood that is manufactured and stamped to meet U.S. 
Products Standard PS 1-09 for Structural Plywood (including any 
revisions to that standard or any substantially equivalent 
international standard intended for structural plywood), including 
but not limited to the ``bond performance'' requirements set forth 
at paragraph 5.8.6.4 of that Standard and the performance criteria 
detailed at Table 4 through 10 of that Standard; (2) plywood 
platforms with a face and back ply of cork; (3) multilayered wood 
flooring, as described in the antidumping duty and countervailing 
duty orders on Multilayered Wood Flooring from the People's Republic 
of China, Import Administration, International Trade Administration, 
U.S. Department of Commerce Investigation Nos. A-570-970 and C-570-
971 (published December 8, 2011); (4) plywood further manufactured 
or further worked aside from sanding, surface coating (i.e., 
``prefinishing''), scraping or staining (e.g., bent or molded 
plywood; bent or molded plywood is defined as a flat panel that is 
purposely further manufactured through whatever means to achieve a 
shape or design other than a flat plane).
    Imports of the subject merchandise are provided for under the 
following subheadings of the Harmonized Tariff Schedule of the 
United States (HTSUS): 4412.10.0500; 4412.31.0520; 4412.31.0540; 
4412.31.0560; 4412.31.2510; 4412.31.2520; 4412.31.4040; 
4412.31.4050; 4412.31.4060; 4412.31.4070; 4412.31.5135; 
4412.31.5155; 4412.31.5165; 4412.31.5175; 4412.31.6000; 
4412.31.9100; 4412.32.0520; 4412.32.0540; 4412.32.0560; 
4412.32.2510; 4412.32.2520; 4412.32.3135; 4412.32.3155; 
4412.32.3165; 4412.32.3175; 4412.32.3185; 4412.32.5600; 
4412.39.1000; 4412.39.3000; 4412.39.4011; 4412.39.4012; 
4412.39.4019; 4412.39.4031; 4412.39.4032; 4412.39.4039; 
4412.39.4051; 4412.39.4052; 4412.39.4059; 4412.39.4061; 
4412.39.4062; 4412.39.4069; 4412.39.5010; 4412.39.5030; 
4412.39.5050; 4412.94.1030; 4412.94.1050; 4412.94.3111; 
4412.94.3121; 4412.94.3131; 4412.94.3141; 4412.94.3160; 
4412.94.3171; 4412.94.4100; 4412.94.6000; 4412.94.7000; 
4412.94.8000; 4412.94.9000; 4412.99.0600; 4412.99.1020; 
4412.99.1030; 4412.99.1040; 4412.99.3110; 4412.99.3120; 
4412.99.3130; 4412.99.3140; 4412.99.3150; 4412.99.3160; 
4412.99.3170; 4412.99.4100; 4412.99.5710; 4412.99.6000; 
4412.99.7000; 4412.99.8000; and 4412.99.9000. While HTSUS 
subheadings are provided for

[[Page 64959]]

convenience and customs purposes, the written description of the 
subject merchandise as set forth herein is dispositive.
[FR Doc. 2012-26220 Filed 10-23-12; 8:45 am]
BILLING CODE 3510-DS-P