[Federal Register Volume 82, Number 236 (Monday, December 11, 2017)]
[Notices]
[Pages 58175-58178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26608]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-059]


Countervailing Duty Investigation of Cold-Drawn Mechanical Tubing 
of Carbon and Alloy Steel From the People's Republic of China: Final 
Affirmative Determination, and Final Affirmative Determination of 
Critical Circumstances, in Part

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

SUMMARY: The Department of Commerce (the Department) determines that 
countervailable subsidies are being provided to producers and exporters 
of certain cold-drawn mechanical tubing of carbon and alloy steel 
(cold-drawn mechanical tubing) from the People's Republic of China 
(PRC), as provided in section 705 of the Tariff Act of 1930 (the Act). 
The period of investigation is January 1, 2016, through December 31, 
2016. For more information on the estimated subsidy rates, see the 
``Final Determination'' section of this notice.

DATES: Applicable December 11, 2017.

FOR FURTHER INFORMATION CONTACT: Shanah Lee at (202) 482-6386 or Alex 
Rosen at (202) 482-7814, AD/CVD Operations, Office III, Enforcement and 
Compliance, International Trade Administration, U.S. Department of 
Commerce, 1401 Constitution Avenue NW., Washington, DC 20230.

Background

    The Department published the Preliminary Determination on September 
25, 2017.\1\ A summary of events that occurred since the Department 
published the Preliminary Determination, as well as a full discussion 
of the issues raised by parties for this final determination, may be 
found in the Issues and Decision Memorandum.\2\ The Issues and Decision 
Memorandum is a public document and is on file electronically via 
Enforcement and Compliance's Antidumping and Countervailing Duty 
Centralized Electronic Service System (ACCESS). ACCESS is available to 
registered users at http://access.trade.gov, and is available to all 
parties in the Central Records Unit, Room B8024 of the main Department 
of Commerce building. In addition, a complete version of the Issues and 
Decision Memorandum can be accessed directly at http://enforcement.trade.gov/frn/. The signed Issues and Decision Memorandum 
and the electronic version are identical in content.
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    \1\ See Certain Cold-Drawn Mechanical Tubing of Carbon and Alloy 
Steel from the People's Republic of China: Preliminary Affirmative 
Countervailing Duty Determination, 82 FR 44562 (September 25, 2017) 
(Preliminary Determination).
    \2\ See Memorandum, ``Issues and Decision Memorandum for the 
Final Determination in the Countervailing Duty Investigation of 
Cold-Drawn Mechanical Tubing of Carbon and Alloy Steel from the 
People's Republic of China,'' dated concurrently with, and hereby 
adopted by, this notice (Issues and Decision Memorandum).
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Scope of the Investigation

    The product covered by this investigation is cold-drawn mechanical 
tubing from the PRC. For a complete description of the scope of this 
investigation, see Appendix I of this notice.

Scope Comments

    In the Department's Preliminary Scope Decision Memorandum, we set 
aside a period of time for parties to raise issues regarding product 
coverage (i.e., scope) in scope case briefs or other written comments 
on scope issues.\3\ Certain interested parties commented on the scope 
of the investigation as it appeared in the Preliminary Scope Decision 
Memorandum. For a summary of the product coverage comments and rebuttal 
responses submitted to the record for this final determination, and 
accompanying discussion and analysis of all comments timely received, 
see the Final Scope Decision Memorandum.\4\ See the scope in Appendix I 
to this notice.
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    \3\ Seeemorandum, ``Certain Cold-Drawn Mechanical Tubing of 
Carbon and Alloy Steel from the Federal Republic of Germany, India, 
Italy, the Republic of Korea, the People's Republic of China, and 
Switzerland: Scope Comments Decision Memorandum for the Preliminary 
Determinations'' dated November 15, 2017 (Preliminary Scope Decision 
Memorandum).
    \4\ See Memorandum, ``Certain Cold-Drawn Mechanical Tubing of 
Carbon and Alloy Steel from the Federal Republic of Germany, India, 
Italy, the Republic of Korea, the People's Republic of China, and 
Switzerland: Scope Comments Decision Memorandum for the Final 
Determination'' (Final Scope Decision Memorandum), dated 
concurrently with this final determination.

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[[Page 58176]]

Analysis of Subsidy Programs and Comments Received

    The subsidy programs under investigation and the issues raised in 
the case and rebuttal briefs by parties in this investigation are 
discussed in the Issues and Decision Memorandum. A list of the issues 
that parties raised, and to which we responded in the Issues and 
Decision Memorandum, is attached to this notice at Appendix II.

Verification

    As provided in section 782(i) of the Act, in September 2017, the 
Department verified the subsidy information reported by respondents 
Jiangsu Hongyi Steel Pipe Co., Ltd. (Hongyi) and Zhangjiagang Huacheng 
Import & Export Co., Ltd. (Huacheng I&E). We used standard verification 
procedures, including an examination of relevant accounting and 
production records, and original source documents provided by the 
respondents.\5\
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    \5\ See memorandum to the file, ``Verification of the 
Questionnaire Responses of Jiangsu Hongyi Steel Pipe Co., Ltd.,'' 
dated October 19, 2017; and memorandum to the file, ``Verification 
of the Questionnaire Responses of Zhangjiagang Huacheng Import & 
Export Co., Ltd. (Huacheng I&E) and Its Cross-Owned Affiliates'' 
dated October 18, 2017.
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Use of Adverse Facts Available

    In making this final determination, the Department relied, in part, 
on facts available. As discussed in the Issues and Decision Memorandum, 
because the Government of the People's Republic of China (GOC) did not 
act to the best of its ability in responding to certain of the 
Department's requests for information, we drew adverse inferences, 
where appropriate, in selecting from among the facts otherwise 
available, pursuant to section 776(a) and (b) of the Act.\6\ For 
further information, see the section ``Use of Facts Otherwise Available 
and Adverse Inferences'' in the accompanying Issues and Decision 
Memorandum.
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    \6\ See Issues and Decision Memorandum at ``Use of Facts 
Otherwise Available and Adverse Inferences'' section.
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Changes Since the Preliminary Determination

    Based on our review and analysis of the comments received from 
parties, and minor corrections accepted at verification, we made 
certain changes to the respondents' subsidy rate calculations since the 
Preliminary Determination. For a discussion of these changes, see the 
Issues and Decision Memorandum and Final Analysis Memoranda.\7\
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    \7\ See Issues and Decision Memorandum; see also memorandum to 
the file, ``Countervailing Duty Investigation of Cold-Drawn 
Mechanical Tubing of Carbon and Alloy Steel from the People's 
Republic of China: Analysis Memorandum for the Final Determination 
of the Countervailing Duty Investigation of Cold-Drawn Mechanical 
Tubing of Carbon and Alloy Steel from the People's Republic of 
China: Jiangsu Hongyi Pipe Co., Ltd.,'' dated concurrently with this 
determination (Hongyi's Final Analysis Memorandum); and, memorandum 
to the file, ``Countervailing Duty Investigation of Certain Cold-
Drawn Mechanical Tubing of Carbon and Alloy Steel from the People's 
Republic of China: Calculation Memorandum for the Final 
Determination for Zhangjiagang Huacheng Import & Export Co., Ltd.,'' 
dated concurrently with this determination (Huacheng's Final 
Analysis Memorandum).
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Final Affirmative Determination of Critical Circumstances, in Part

    Due to the timing of the petitioners' critical circumstance 
allegation and in accordance with 19 CFR 351.206(b) and (e) the 
Department did not make a preliminary critical circumstances 
determination.\8\ Based on information provided by the petitioners, 
data placed on the record of this investigation by the mandatory 
respondents Hongyi and Huacheng I&E, and GTA data collected by the 
Department, for the final determination, the Department finds that, in 
accordance with 705(a)(2) of the Act, critical circumstances do not 
exist for individually-examined respondents Huacheng I&E and Hongyi, 
but that critical circumstances do exist for non-individually examined 
companies receiving the ``All-Others'' rate in this investigation. A 
discussion of the determination can be found in the Issues and Decision 
Memorandum.
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    \8\ See the petitioners' letter, ``Certain Cold-Drawn Mechanical 
Tubing of Carbon and Alloy Steel from the People's Republic of 
China, Italy, and the Republic of Korea--Critical Circumstances 
Allegation,'' dated October 23, 2017.
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All-Others Rate

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we 
calculated a countervailing duty (CVD) rate for each individually-
investigated producer/exporter of the subject merchandise. Consistent 
with section 705(c)(5)(A)(i) of the Act, we calculated an estimated 
``all-others'' rate for exporters/producers not individually examined. 
Section 705(c)(5)(A)(i) of the Act provides that the ``all-others'' 
rate shall be an amount equal to the weighted average of the 
countervailable subsidy rates established for individually investigated 
exporters/producers, excluding any rates that are zero or de minimis or 
any rates determined entirely under section 776 of the Act. Neither of 
the mandatory respondents' rates in this final determination was zero 
or de minimis or based entirely on facts otherwise available. 
Accordingly, the Department calculated the all-others' rate using a 
simple average of the individual estimated subsidy rates calculated for 
the examined respondents.

Final Determination

    We determine the total estimated countervailable subsidy rates to 
be:
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    \9\ Unchanged from Preliminary Determination, the Department 
finds the following companies to be cross-owned with Hongyi: Hongren 
Precision Pipe Manufacturing Co., Ltd and Changzhou Kemeng 
Mechanical Equipment Co., Ltd.
    \10\ Unchanged from Preliminary Determination, the Department 
finds the following companies to be cross-owned with Huacheng I&E: 
Zhangjiagang Huacheng Industry Pipe Making Corporation, Zhangjiagang 
Salem Fine Tubing Co., Ltd., Zhangjiagang Huacheng Investment 
Holding Co., Ltd., Zhangjiagang HZB Special Material Technology Co., 
Ltd. and Zhangjiagang Huacheng Special Materials Corporation.

------------------------------------------------------------------------
                                                           Subsidy rate
                         Company                                (%)
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Jiangsu Hongyi Steel Pipe Co., Ltd \9\..................           21.41
Zhangjiagang Huacheng Import & Export Co., Ltd \10\.....           18.27
All-Others..............................................           19.84
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Disclosure

    We intend to disclose the calculations performed to interested 
parties within five days of the public announcement of this final 
determination in accordance with 19 CFR 351.224(b).

Continuation of Suspension of Liquidation

    In accordance with section 703(d) of the Act, we will instruct U.S. 
Customs and Border Protection (CBP) to continue to suspend liquidation 
of all appropriate entries of cold-drawn mechanical tubing from the 
PRC, as described in Appendix I of this notice, which were entered, or 
withdrawn from warehouse, for consumption on or after September 25, 
2017, the date of the publication of the Preliminary Determination in 
the Federal Register. Furthermore, we will instruct CBP to require a 
cash deposit for such entries of merchandise in the amounts indicated 
above, pursuant to section 705(c)(1)(B)(ii) of the Act.
    Section 705(c)(4) of the Act provides that, given an affirmative 
determination of critical circumstances, any suspension of liquidation 
shall apply to unliquidated entries of merchandise entered, or 
withdrawn from warehouse, for consumption on or after the date which is 
90 days before the date on which the suspension of liquidation was

[[Page 58177]]

first ordered. The Department finds that critical circumstances exist 
for all other exporters or producers of subject merchandise. In 
accordance with section 705(c)(4) of the Act, the suspension of 
liquidation shall apply to unliquidated entries of merchandise from all 
other exporters/producers that were entered, or withdrawn from 
warehouse, for consumption on or after June 27, 2017, which is 90 days 
before the suspension of liquidation was first ordered.

U.S. International Trade Commission (ITC) Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our final affirmative CVD determination. In addition, we are 
making available to the ITC all non-privileged and non-proprietary 
information relating to this investigation. We will allow the ITC 
access to all privileged and business proprietary information in our 
files, provided the ITC confirms that it will not disclose such 
information, either publicly or under an administrative protective 
order (APO), without the written consent of the Assistant Secretary for 
Enforcement and Compliance.
    If the ITC determines that material injury, or threat of material 
injury, does not exist, this proceeding will be terminated and all cash 
deposits will be refunded. If the ITC determines that such injury does 
exist, we will issue a CVD order directing CBP to assess, upon further 
instruction by the Department, CVDs on all imports of the subject 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after the effective date of the suspension of liquidation, as discussed 
above in the ``Continuation of Suspension of Liquidation'' section.

Notification Regarding Administrative Protective Orders (APOs)

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder to parties 
subject to an APO of their responsibility concerning the destruction of 
proprietary information disclosed under APO in accordance with 19 CFR 
351.305(a)(3). Timely written notification of the return/destruction of 
APO materials or conversion to judicial protective order is hereby 
requested. Failure to comply with the regulations and terms of an APO 
is a violation that is subject to sanction.
    This determination is issued and published pursuant to sections 
705(d) and 777(i) of the Act.

    Dated: December 4, 2017.
Gary Taverman,
Deputy Assistance Secretary for Antidumping and Countervailing Duty 
Operations, performing the non-exclusive functions and duties of the 
Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The scope of this investigation covers cold-drawn mechanical 
tubing of carbon and alloy steel (cold-drawn mechanical tubing) of 
circular cross-section, 304.8 mm or more in length, in actual 
outside diameters less than 331mm, and regardless of wall thickness, 
surface finish, end finish or industry specification. The subject 
cold-drawn mechanical tubing is a tubular product with a circular 
cross-sectional shape that has been cold-drawn or otherwise cold-
finished after the initial tube formation in a manner that involves 
a change in the diameter or wall thickness of the tubing, or both. 
The subject cold-drawn mechanical tubing may be produced from either 
welded (e.g., electric resistance welded, continuous welded, etc.) 
or seamless (e.g., pierced, pilgered or extruded, etc.) carbon or 
alloy steel tubular products. It may also be heat treated after cold 
working. Such heat treatments may include, but are not limited to, 
annealing, normalizing, quenching and tempering, stress relieving or 
finish annealing. Typical cold-drawing methods for subject 
merchandise include, but are not limited to, drawing over mandrel, 
rod drawing, plug drawing, sink drawing and similar processes that 
involve reducing the outside diameter of the tubing with a die or 
similar device, whether or not controlling the inside diameter of 
the tubing with an internal support device such as a mandrel, rod, 
plug or similar device. Other cold-finishing operations that may be 
used to produce subject merchandise include cold-rolling and cold-
sizing the tubing.
    Subject cold-drawn mechanical tubing is typically certified to 
meet industry specifications for cold-drawn tubing including but not 
limited to:
    (1) American Society for Testing and Materials (ASTM) or 
American Society of Mechanical Engineers (ASME) specifications ASTM 
A-512, ASTM A-513 Type 3 (ASME SA513 Type 3), ASTM A-513 Type 4 
(ASME SA513 Type 4), ASTM A-513 Type 5 (ASME SA513 Type 5), ASTM A-
513 Type 6 (ASME SA513 Type 6), ASTM A-519 (cold-finished);
    (2) SAE International (Society of Automotive Engineers) 
specifications SAE J524, SAE J525, SAE J2833, SAE J2614, SAE J2467, 
SAE J2435, SAE J2613;
    (3) Aerospace Material Specification (AMS) AMS T-6736 (AMS 
6736), AMS 6371, AMS 5050, AMS 5075, AMS 5062, AMS 6360, AMS 6361, 
AMS 6362, AMS 6371, AMS 6372, AMS 6374, AMS 6381, AMS 6415;
    (4) United States Military Standards (MIL) MIL-T-5066 and MIL-T-
6736;
    (5) foreign standards equivalent to one of the previously listed 
ASTM, ASME, SAE, AMS or MIL specifications including but not limited 
to:
    (a) German Institute for Standardization (DIN) specifications 
DIN 2391-2, DIN 2393-2, DIN 2394-2);
    (b) European Standards (EN) EN 10305-1, EN 10305-2, EN 10305-4, 
EN 10305-6 and European national variations on those standards 
(e.g., British Standard (BS EN), Irish Standard (IS EN) and German 
Standard (DIN EN) variations, etc.);
    (c) Japanese Industrial Standard (JIS) JIS G 3441 and JIS G 
3445; and
    (6) proprietary standards that are based on one of the above-
listed standards.
    The subject cold-drawn mechanical tubing may also be dual or 
multiple certified to more than one standard. Pipe that is multiple 
certified as cold-drawn mechanical tubing and to other 
specifications not covered by this scope, is also covered by the 
scope of this investigation when it meets the physical description 
set forth above.
    Steel products included in the scope of this investigation are 
products in which: (1) Iron predominates, by weight, over each of 
the other contained elements; and (2) the carbon content is 2 
percent or less by weight.
    For purposes of this scope, the place of cold-drawing determines 
the country of origin of the subject merchandise. Subject 
merchandise that is subject to minor working in a third country that 
occurs after drawing in one of the subject countries including, but 
not limited to, heat treatment, cutting to length, straightening, 
nondestructive testing, deburring or chamfering, remains within the 
scope of this investigation.
    All products that meet the written physical description are 
within the scope of this investigation unless specifically excluded 
or covered by the scope of an existing order. Merchandise that meets 
the physical description of cold-drawn mechanical tubing above is 
within the scope of the investigation even if it is also dual or 
multiple certified to an otherwise excluded specification listed 
below. The following products are outside of, and/or specifically 
excluded from, the scope of this investigation:
    (1) Cold-drawn stainless steel tubing, containing 10.5 percent 
or more of chromium by weight and not more than 1.2 percent of 
carbon by weight;
    (2) products certified to one or more of the ASTM, ASME or 
American Petroleum Institute (API) specifications listed below:
     ASTM A-53;
     ASTM A-106;
     ASTM A-179 (ASME SA 179);
     ASTM A-192 (ASME SA 192);
     ASTM A-209 (ASME SA 209);
     ASTM A-210 (ASME SA 210);
     ASTM A-213 (ASME SA 213);
     ASTM A-334 (ASME SA 334);
     ASTM A-423 (ASME SA 423);
     ASTM A-498;
     ASTM A-496 (ASME SA 496);
     ASTM A-199;
     ASTM A-500;
     ASTM A-556;
     ASTM A-565;
     API 5L; and
     API 5CT

except that any cold-drawn tubing product certified to one of the 
above excluded specifications will not be excluded from the scope if 
it is also dual- or multiple-certified to any other specification 
that otherwise would fall within the scope of this investigation.

[[Page 58178]]

    The products subject to the investigation are currently 
classified in the Harmonized Tariff Schedule of the United States 
(HTSUS) under item numbers: 7304.31.3000, 7304.31.6050, 
7304.51.1000, 7304.51.5005, 7304.51.5060, 7306.30.5015, 
7306.30.5020, 7306.50.5030. Subject merchandise may also enter under 
numbers 7306.30.1000 and 7306.50.1000. The HTSUS subheadings above 
are provided for convenience and customs purposes only. The written 
description of the scope of the investigation is dispositive.

Appendix II

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary
II. Background
III. Period of Investigation
IV. Final Determination of Critical Circumstances, in Part
    A. Background
    B. Legal Framework
    C. Critical Circumstances Allegation
    D. Analysis
V. Scope Comments
VI. Scope of the Investigation
VII. Application of the Countervailing Duty Law to Imports From the 
PRC
VIII. Subsidies Valuation
    A. Allocation Period
    B. Attribution of Subsidies
    C. Denominators
IX. Benchmarks and Discount Rates
X. Use of Facts Otherwise Available and Adverse Inferences
XI. Analysis of Programs
    A. Programs Determined To Be Countervailable
    B. Programs Determined Not To Be Used During the POI by Hongyi 
and Huacheng I&E
XII. Analysis of Comments
    Comment 1: The Countervailability of the Government Provision of 
Coking Coal and Steam Coal for Less Than Adequate Remuneration 
(LTAR)
    Comment 2: The Provision of Electricity for LTAR
    Comment 3: The Government Provision of Inputs for LTAR
    a. Input Producers are ``Authorities''
    b. Inputs are Specific
    c. Input Industries are Distorted (Tier-One Benchmark for Inputs 
for LTAR)
    Comment 4: Benchmarks for Steel Rounds/Billets, Hot-Rolled and 
Cold-Rolled Coiled Steel
    Comment 5: The Appropriate Benchmark for Ocean Freight
    Comment 6: External Benchmark Interest Rates for Loans
    Comment 7: GOC Policy Loans During the POI
    Comment 8: Huacheng I&E's Bank Acceptance Bills
    Comment 9: The Export Buyer's Credit Program
    Comment 10: Income Tax Deductions for R&D Expenses
    Comment 11: The GOC's Claims Regarding Verification
    Comment 12: The Department's Investigation of Uninitiated 
Programs
    Comment 13: Minor Corrections to the Department's Preliminary 
Benefit Calculation
XIII. Recommendation

[FR Doc. 2017-26608 Filed 12-8-17; 8:45 am]
 BILLING CODE 3510-DS-P