[Federal Register Volume 82, Number 111 (Monday, June 12, 2017)]
[Notices]
[Pages 26906-26907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-12116]



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DEPARTMENT OF COMMERCE

International Trade Administration

[C-201-846]


Countervailing Duty Suspension Agreement on Sugar From Mexico: 
Rescission of 2014-2015 and 2015-2016 Administrative Reviews

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: On May 1, 2017, the Department notified the Government of 
Mexico (GOM) of its intent to terminate the Agreement Suspending the 
Antidumping Duty Investigation on sugar from Mexico (CVD Agreement) 
unless a new agreement was reached on or before June 5, 2017. The 
Department subsequently modified its notice of intent to terminate the 
CVD Agreement, stating its continued intent to terminate the CVD 
Agreement unless an amended agreement was reached on or before June 6, 
2017. Because the Department intends to terminate the CVD Agreement, 
or, in the alternative, amend the CVD Agreement prior to the expiration 
of the termination period, the two ongoing administrative reviews of 
the original CVD Agreement are now moot, and the Department is 
rescinding both reviews.

DATES: Effective June 5, 2017.

FOR FURTHER INFORMATION CONTACT: Sally C. Gannon or David Cordell, 
Enforcement & Compliance, International Trade Administration, U.S. 
Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 
20230, telephone: (202) 482-0162 or (202) 482-0408.

SUPPLEMENTARY INFORMATION: 

Background

Investigation and Issuance of the CVD Agreement

    On April 17, 2014, the Department initiated a countervailing duty 
investigation under section 702 of the Tariff Act of 1930, as amended 
(the Act), to determine whether manufacturers, producers, or exporters 
of sugar from Mexico receive countervailable subsidies.\1\ On August 
25, 2014, the Department preliminarily determined that countervailable 
subsidies were being provided to producers and exporters of sugar from 
Mexico and aligned the final countervailing duty determination with the 
final antidumping duty determination.\2\
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    \1\ See Sugar from Mexico: Initiation of Countervailing Duty 
Investigation, 79 FR 22790 (April 24, 2014).
    \2\ See Sugar from Mexico: Preliminary Affirmative 
Countervailing Determination and Alignment of Final Countervailing 
Duty Determination With Final Antidumping Duty Determination, 79 FR 
51956 (September 2, 2014) (Preliminary Determination).
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    On December 19, 2014, the Department and the GOM signed the CVD 
Agreement, which suspended the CVD investigation.\3\ The basis for this 
action was an agreement between the Department and the GOM, wherein the 
GOM agreed to restrict the volume of direct or indirect exports to the 
United States of sugar from all Mexican producers/exporters in order to 
eliminate completely the injurious effects of exports of this 
merchandise to the United States. The GOM also agreed not to provide 
any new or additional export or import substitution subsidies on the 
subject merchandise.
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    \3\ See Sugar From Mexico: Suspension of Countervailing Duty 
Investigation, 79 FR 78044 (December 29, 2014).
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    On January 8, 2015, Imperial Sugar Company (Imperial) and AmCane 
Sugar LLC (AmCane) each notified the Department that they had 
petitioned the International Trade Commission (ITC) to conduct a review 
of the CVD Agreement under section 704(h) of the Act to determine 
whether the injurious effects of the imports of the subject merchandise 
are eliminated completely by the CVD Agreement. On March 19, 2015, in a 
unanimous vote, the ITC found that the CVD Agreement eliminated 
completely the injurious effects of imports of sugar from Mexico.\4\ As 
a result of the ITC's determination, the CVD Agreement remained in 
effect, and on March 27, 2015, the Department, in accordance with 
section 704(h)(3) of the Act, instructed U.S. Customs and Border 
Protection (CBP) to terminate the suspension of liquidation of all 
entries of sugar from Mexico and refund all cash deposits.
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    \4\ See Sugar from Mexico; Determinations, 80 FR 16426 (March 
27, 2015).
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    Notwithstanding issuance of the CVD Agreement, pursuant to requests 
by domestic interested parties, the Department continued its 
investigation and made an affirmative final determination that 
countervailable subsidies were being provided to exporters and 
producers of sugar from Mexico.\5\ In its Final Determination, the 
Department calculated countervailable subsidy rates of 43.93 percent 
for Fondo de Empresas Expropiadas del Sector Azucarero (FEESA), 5.78 
percent for Ingenio Tala S.A. de C.V. and certain affiliated sugar 
mills of Grupo Azucarero Mexico S.A. de C.V. (collectively, the GAM 
Group), and 38.11 percent for producers and exporters that were not 
individually investigated. The Department stated, in its Final 
Determination, that it would ``not instruct CBP to suspend liquidation 
or collect cash deposits calculated herein unless the 
{CVD{time} Suspension Agreement is terminated.'' \6\ The ITC 
subsequently made an affirmative determination of material injury to an 
industry in the United States by reason of imports of sugar from 
Mexico.\7\
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    \5\ See Sugar From Mexico: Continuation of Antidumping and 
Countervailing Duty Investigations, 80 FR 25278 (May 4, 2015); Sugar 
From Mexico: Final Affirmative Countervailing Duty Determination, 80 
FR 57337 (September 23, 2015) (Final Determination).
    \6\ Final Determination, 80 FR at 57338.
    \7\ See Sugar From Mexico, 80 FR 70833 (November 16, 2015) 
(Final ITC Determination).
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Reviews

    On February 9, 2016, at the request of the American Sugar Coalition 
and its Members (ASC),\8\ Imperial, and AmCane, the Department 
initiated an administrative review of the CVD Agreement to examine, 
pursuant to for the period of review from December 19, 2014 through 
November 30, 2015 \9\ to examine the status of, and compliance with, 
the CVD Agreement,\10\ as well as whether suspension of the CVD 
Agreement is in the ``public interest,'' including the availability of 
supplies of sugar in the U.S. market, and whether ``effective 
monitoring'' is practicable.\11\ On December 5, 2016, the Department 
published its preliminary results of its administrative review of the 
CVD Agreement.\12\ In its Preliminary Results, the Department 
determined that there is some indication that certain individual 
transactions of subject merchandise may

[[Page 26907]]

not be in compliance with the terms of the CVD Agreement, and further, 
that the CVD Agreement may no longer be meeting all of the statutory 
requirements, as set forth in sections 704(c) and (d) of the Act.
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    \8\ The members of the American Sugar Coalition are: American 
Sugar Cane League, American Sugarbeet Growers Association, American 
Sugar Refining, Inc., Florida Sugar Cane League, Rio Grande Valley 
Sugar Growers, Inc., Sugar Cane Growers Cooperative of Florida, and 
the United States Beet Sugar Association.
    \9\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, 81 FR 6832 (February 9, 2016) (2014-2015 
Administrative Review). On March 16, 2016, the Department expanded 
the period of review for the CVD Agreement from December 19, 2014, 
through December 31, 2014, to include calendar year 2015. As such, 
the period of review for the instant review is December 19, 2014, 
through December 31, 2015. See Memorandum to Lynn Fischer Fox 
entitled ``First Administrative Review of the Agreement Suspending 
the Countervailing Duty Investigation on Sugar from Mexico: 
Extending the Period of Review'' (March 16, 2016).
    \10\ See section 751(a)(1)(C) of the Act.
    \11\ See section IV of the CVD Agreement.
    \12\ See Suspension Agreement on Sugar From Mexico; 
Administrative Review of the Agreement Suspending the Countervailing 
Duty Investigation on Sugar From Mexico, 81 FR 87539 (December 5, 
2016) (Preliminary Results).
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    On February 13, 2017, at the request of interested parties ASC, 
Imperial, and Zucarmex S.A. de C.V. (Zucarmex), the Department 
initiated an administrative review of the CVD Agreement for the period 
January 1, 2016 through December 31, 2016.\13\
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    \13\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, 82 FR 10457 (February 13, 2017) (2015-2016 
Administrative Review).
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    On May 1, 2017, the Department notified the GOM of its intent to 
terminate the CVD Agreement pursuant to Section XI.B of the CVD 
Agreement, unless the parties reached agreement upon resolution of the 
outstanding issues with the current agreement on or before June 5, 
2016.\14\ On June 5, 2017, the Department notified the GOM that it was 
extending the period within which to reach an agreement until June 6, 
2017.\15\
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    \14\ See Letter from Ronald Lorentzen to Aristeo Lopez, 
``Agreement Suspending the Countervailing Duty Investigation on 
Sugar from Mexico'' (May 1, 2017) (May 1, 2017 letter).
    \15\ See Letter from Ronald Lorentzen to Aristeo Lopez, 
``Agreement Suspending the Countervailing Duty Investigation on 
Sugar from Mexico'' (June 5, 2017) (June 5, 2017 letter).
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Scope of CVD Agreement

    The product subject to the CVD Agreement is raw and refined sugar 
of all polarimeter readings derived from sugar cane or sugar beets. The 
covered merchandise is classified in the Harmonized Tariff Schedule of 
the United States (HTSUS) at subheadings: 1701.12.1000, 1701.12.5000, 
1701.13.1000, 1701.13.5000, 1701.14.1000, 1701.14.5000, 1701.91.1000, 
1701.91.3000, 1701.99.1010, 1701.99.1025, 1701.99.1050, 1701.99.5010, 
1701.99.5025, 1701.99.5050, and 1702.90.4000.
    See Appendix I for the full description of merchandise covered by 
the CVD Agreement.

Period of Administrative Reviews

    The POR of the first administrative review is December 19, 2014 
through December 31, 2015 and the POR of the second administrative 
review is January 1, 2016 through December 31, 2016.

Rescission of Administrative Reviews

    The Department has indicated its intent to terminate the CVD 
Agreement, unless an amended agreement can be reached.\16\ Accordingly, 
the questions of the status of, and compliance, with the CVD Agreement, 
whether suspension of the CVD Agreement is in the ``public interest,'' 
including the availability of supplies of sugar in the U.S. market, and 
whether ``effective monitoring'' is practicable have been rendered moot 
because either the CVD Agreement will be amended and suspension of the 
investigation will be continued with the Department's issuance of a 
final amendment to the CVD Agreement, or the CVD Agreement will be 
terminated, per the May 1, 2017 notice of intent to terminate, as 
modified by its June 5, 2017 letter.\17\ Therefore, the Department is 
rescinding the 2014-2015 and 2015-2016 administrative reviews of the 
CVD Agreement.
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    \16\ See May 1, 2017 letter, as modified by the June 5, 2017 
letter.
    \17\ See May 1, 2017 Letter. Thus, if no amendment is finalized, 
the administrative reviews will be moot for the alternative reason 
that the CVD Agreement has been terminated.
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Notification to Interested Parties

    This notice serves as the only reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305(a)(3). Timely written 
notification of return/destruction of APO materials or conversion to 
judicial protective order is hereby requested. Failure to comply with 
the regulations and the terms of an APO is a sanctionable violation.
    We are issuing and publishing this notice in accordance with 
sections 704(f), 751(a)(1) and 777(i)(1) of the Act.

     Dated: June 6, 2017.
Ronald K. Lorentzen,
Acting Assistant Secretary for Enforcement and Compliance.

Appendix I: Scope of the CVD Agreement

    The product covered by the CVD Agreement is raw and refined 
sugar of all polarimeter readings derived from sugar cane or sugar 
beets. The chemical sucrose gives sugar its essential character. 
Sucrose is a nonreducing disaccharide compo15)10sed of glucose and 
fructose linked by a glycosidic bond via their anomeric carbons. The 
molecular formula for sucrose is 
C12H22O11; the International Union 
of Pure and Applied Chemistry (IUPAC) International Chemical 
Identifier (InChl) for sucrose is 1S/C12H22O11/c13-l-4-
6(16)8(18)9(19)11(21-4)23-12(3-15)10(20)7(17)5(2-14)22-12/h4-11,13-
20H,1-H2/t4-,5-,6-,7-,8+,9-,10+,11-,12+/m1/s1; the InChl Key for 
sucrose is CZMRCDWAGMRECN-UGDNZRGBSA-N; the U.S. National Institutes 
of Health PubChem Compound Identifier (CID) for sucrose is 5988; and 
the Chemical Abstracts Service (CAS) Number of sucrose is 57-50-1.
    Sugar described in the previous paragraph includes products of 
all polarimeter readings described in various forms, such as raw 
sugar, estandar or standard sugar, high polarity or semi-refined 
sugar, special white sugar, refined sugar, brown sugar, edible 
molasses, desugaring molasses, organic raw sugar, and organic 
refined sugar. Other sugar products, such as powdered sugar, colored 
sugar, flavored sugar, and liquids and syrups that contain 95 
percent or more sugar by dry weight are also within the scope of the 
order.
    The scope of the order does not include (1) sugar imported under 
the Refined Sugar Re-Export Programs of the U.S. Department of 
Agriculture; \18\ (2) sugar products produced in Mexico that contain 
95 percent or more sugar by dry weight that originated outside of 
Mexico; (3) inedible molasses (other than inedible desugaring 
molasses noted above); (4) beverages; (5) candy; (6) certain 
specialty sugars; and (7) processed food products that contain sugar 
(e.g., cereals). Specialty sugars excluded from the scope of the 
order are limited to the following: caramelized slab sugar candy, 
pearl sugar, rock candy, dragees for cooking and baking, fondant, 
golden syrup, and sugar decorations.
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    \18\ This exclusion applies to sugar imported under the Refined 
Sugar Re-Export Program, the Sugar-Containing Products Re-Export 
Program, and the Polyhydric Alcohol Program administered by the U.S. 
Department of Agriculture.
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    Merchandise covered by the CVD Agreement is typically imported 
under the following headings of the HTSUS: 1701.12.1000, 
1701.12.5000, 1701.13.1000, 1701.13.5000, 1701.14.1000, 
1701.14.5000, 1701.91.1000, 1701.91.3000, 1701.99.1010, 
1701.99.1025, 1701.99.1050, 1701.99.5010, 1701.99.5025, 
1701.99.5050, and 1702.90.4000. The tariff classification is 
provided for convenience and customs purposes; however, the written 
description of the scope of the order is dispositive.

[FR Doc. 2017-12116 Filed 6-9-17; 8:45 am]
 BILLING CODE 3510-DS-P