[Federal Register Volume 84, Number 131 (Tuesday, July 9, 2019)]
[Notices]
[Pages 32714-32720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14556]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-357-820, C-357-821]


Biodiesel From Argentina: Preliminary Results of Changed 
Circumstances Reviews of the Antidumping and Countervailing Duty Orders

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

SUMMARY: The Department of Commerce (Commerce) preliminarily determines 
that changed circumstances do not exist warranting any changes under 
the antidumping duty (AD) order for biodiesel from Argentina. Commerce 
also determines, however, that changed circumstances exist warranting a 
change to the cash deposit rates under the countervailing duty (CVD) 
order.

DATES: Applicable July 9, 2019.

FOR FURTHER INFORMATION CONTACT: Charlotte Baskin-Gerwitz and Kathryn 
Wallace, AD/CVD Operations, Office VII, Enforcement and Compliance, 
International Trade Administration, U.S. Department of Commerce, 1401 
Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4880 
and (202) 482-6251, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On January 4, 2018 and April 26, 2018, Commerce published the CVD 
and AD orders on biodiesel from Argentina.\1\ On September 21, 2018, 
the Government of Argentina (GOA), joined by Vicentin S.A.I.C. 
(Vicentin) and LDC Argentina (LDC), requested that Commerce initiate a 
changed circumstance review (CCR) of the AD order, and the GOA (alone) 
requested that Commerce initiate a CCR of the CVD order, in order to 
have Commerce adjust the cash deposit rates established in the AD and 
CVD investigations as a result of changes to Argentina's export tax 
regime.\2\ On October 1, 2018, the National Biodiesel Board Fair Trade 
Coalition (the petitioner) filed comments requesting that Commerce deny 
the GOA's request to initiate CCRs.\3\ On October 11, 2018, the GOA, 
Vicentin, and LDC filed comments responding to the petitioner's October 
1, 2018 comments.\4\ On October 15, 2018, the petitioner submitted 
information and data illustrating the improvements in the domestic 
industry since the imposition of the orders, and on October 23, 2018, 
the petitioner submitted further comments opposing initiation of the 
CCRs.\5\ Between September 26, 2018 and October 19, 2018, Commerce met 
with the GOA and the petitioner to discuss their submissions to the 
record.\6\ On November 13, 2018, Commerce initiated CCRs of both the AD 
and CVD orders to assess the effects of the GOA's revisions to its 
export tax regime pursuant to section 751(b)(1) of the Tariff Act of 
1930, as amended (the Act) and 19 CFR 351.216.\7\
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    \1\ See Biodiesel from the Republic of Argentina and the 
Republic of Indonesia: Countervailing Duty Orders, 83 FR 522 
(January 4, 2018), corrected by Biodiesel from the Republic of 
Argentina and the Republic of Indonesia: Countervailing Duty Orders, 
83 FR 3114 (January 23, 2018); see also Biodiesel from Argentina and 
Indonesia: Antidumping Duty Orders, 83 FR 18278 (April 26, 2018).
    \2\ See GOA's Letter, ``Biodiesel from Argentina: Request for 
Changed Circumstances Review,'' dated September 21, 2018 and filed 
on the record of A-357-820; see also GOA's Letter, ``Biodiesel from 
Argentina: Request for Changed Circumstances Review,'' dated 
September 21, 2018 and filed on the record of C-357-821 
(collectively, Requests for CCRs).
    \3\ See Petitioner's Letter, ``Biodiesel from Argentina: 
Petitioner's Opposition to the Government of Argentina's Requests 
for Changed Circumstances Reviews,'' dated October 1, 2018.
    \4\ See GOA's Letter, ``Biodiesel from Argentina: Response to 
Petitioners' Opposition to the Government of Argentina's Request for 
Changed Circumstances Review,'' dated October 11, 2018.
    \5\ See Petitioner's Letter, ``Positive Impact of Orders from 
Argentina on Domestic Biodiesel Industry,'' dated October 15, 2018; 
see also Petitioner's Letter, ``Biodiesel from Argentina: 
Petitioner's Response to Respondents' October 11, 2018 Submission,'' 
dated October 23, 2018.
    \6\ See Memorandum, ``AD/CVD Orders on Biodiesel from 
Argentina--Requests for Changes {sic{time}  Circumstance Reviews,'' 
dated September 26, 2018; see also Memorandum, ``Antidumping and 
Countervailing Duty Orders on Biodiesel from Argentina--Requests for 
Changed Circumstances Reviews: Ex Parte Meeting,'' dated October 4, 
2018; and Memorandum, ``Antidumping and Countervailing Duty Orders 
on Biodiesel from Argentina--Requests for Changed Circumstances 
Reviews: Ex Parte Meeting,'' dated October 19, 2018.
    \7\ See Biodiesel from Argentina: Initiation of Changed 
Circumstances Reviews of the Antidumping and Countervailing Duty 
Orders, 83 FR 56300 (November 13, 2018) (Initiation of CCRs).
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    On November 19, 2018 and November 21, 2018, Commerce discussed the 
Initiation of CCRs with the petitioner

[[Page 32715]]

and the GOA, respectively.\8\ On December 3, 2018, the petitioner 
submitted comments regarding the methodology it recommended Commerce 
apply in conducting the AD and CVD CCRs.\9\ On January 28, 2019, 
Commerce exercised its discretion to toll all deadlines affected by the 
partial federal government closure from December 22, 2018, through the 
resumption of operations on January 29, 2019.\10\ On February 1, 2019, 
Commerce issued an initial questionnaire to the GOA.\11\ The GOA 
submitted its responses to Commerce's initial questionnaire on February 
21, 2019.\12\ On March 11, 2019, the petitioner submitted comments on 
the GOA's initial questionnaire responses.\13\ On March 20, 2019, the 
GOA responded to the petitioner's comments.\14\ Between April 19, 2019 
and June 6, 2019, Commerce held three additional ex parte meetings with 
the petitioner.\15\ On May 16, 2019, and June 14, 2019, Commerce held 
additional ex parte meetings with the GOA.\16\
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    \8\ See Memorandum, ``AD/CVD Orders on Biodiesel from 
Argentina--Requests for Changed Circumstance Reviews,'' dated 
November 19, 2018; see also Memorandum, ``AD/CVD Orders on Biodiesel 
from Argentina: Request for Changed Circumstance Reviews,'' dated 
November 27, 2018.
    \9\ See Petitioner's Letter, ``Biodiesel from Argentina: 
Petitioners' Comments on the Conduct of the Changed Circumstances 
Reviews,'' dated December 3, 2018.
    \10\ See Memorandum to the Record from Gary Taverman, Deputy 
Assistant Secretary for Antidumping and Countervailing Duty 
Operations, performing the non-exclusive functions and duties of the 
Assistant Secretary for Enforcement and Compliance, ``Deadlines 
Affected by the Partial Shutdown of the Federal Government,'' dated 
January 28, 2019. All deadlines in this segment of the proceeding 
have been extended by 40 days.
    \11\ See Commerce Letter re: Initial CCR Questionnaire, dated 
February 1, 2019.
    \12\ See GOA's February 21, 2019 Initial Questionnaire Response 
(GOA IQR).
    \13\ See Petitioner's Letter, ``Biodiesel from Argentina: 
Petitioner's Comments on the GOA's Questionnaire Response,'' dated 
March 11, 2019.
    \14\ See GOA's Letter, ``Biodiesel from Argentina: Changed 
Circumstance Reviews--The GOA's Response to the Petitioners' 
Comments on the GOA's Questionnaire Response,'' dated March 20, 
2019.
    \15\ See Memorandum, ``Changed Circumstances Reviews of the 
Antidumping and Countervailing Duty Orders on Biodiesel from 
Argentina: Ex Parte Meeting with the Petitioners,'' dated April 19, 
2019; see also Memorandum, ``Changed Circumstances Review of the 
Antidumping and Countervailing Duty Orders on Biodiesel from 
Argentina: Ex Parte Meeting with the Petitioners,'' dated May 24, 
2019; and Memorandum, ``Changed Circumstances Reviews of the 
Antidumping and Countervailing Duty Orders on Biodiesel from 
Argentina: Ex Parte Meeting with the National Biodiesel Board,'' 
dated June 10, 2019.
    \16\ See Memorandum, ``AD/CVD Orders on Biodiesel from 
Argentina--Changed Circumstance Reviews,'' dated May 24, 2019; see 
also Memorandum, ``Changed Circumstances Review of the Antidumping 
and Countervailing Duty Orders on Biodiesel from Argentina: Ex Parte 
Meeting with the Government of Argentina,'' dated June 14, 2019.
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Scope of the Orders

    The product covered by the Orders is biodiesel from Argentina. For 
a complete description of the scope of the Orders, see the appendix to 
this notice.

Alleged Changed Circumstances

    During the period of investigation (POI) of the AD and CVD 
investigations (January 1, 2016 through December 31, 2016), an export 
tax of 30 percent on soybeans was in effect in Argentina.\17\ In the AD 
investigation, we concluded that the 30 percent export tax had the 
effect of depressing the domestic price of soybeans.\18\ We explained 
that a comparison of prices within Argentina with world prices 
indicated domestic prices were nearly 40 percent lower than world 
market prices.\19\ We concluded that a ``particular market situation'' 
(PMS) existed with regard to the price of soybeans as an element of the 
cost of production (COP) of biodiesel in Argentina.\20\ Accordingly, we 
adjusted the COP reported by the respondents under investigation by 
substituting a market determined price for the price that the 
respondents actually paid for soybeans in Argentina.\21\
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    \17\ See Biodiesel from Argentina: Preliminary Determination of 
Sales at Less Than Fair Value, Preliminary Affirmative Determination 
of Critical Circumstances, in Part, 82 FR 50391 (October 31, 2017) 
(AD Preliminary Determination), and accompanying Preliminary 
Decision Memorandum (PDM) (AD Preliminary Determination PDM) at 23-
24, unchanged in Biodiesel from Argentina: Final Determination of 
Sales at Less Than Fair Value and Final Affirmative Determination of 
Critical Circumstances, In Part, 83 FR 8837 (March 1, 2018) (AD 
Final Determination) and accompanying Issues and Decision Memorandum 
(IDM) (AD Final Determination IDM); see also Biodiesel from 
Argentina: Preliminary Affirmative Countervailing Duty Determination 
and Preliminary Affirmative Critical Circumstances Determination, in 
Part, 82 FR 40748 (August 28, 2017) (CVD Preliminary Determination), 
and accompanying PDM (CVD Preliminary Determination PDM) at 26-27, 
unchanged in Biodiesel From the Republic of Argentina: Final 
Affirmative Countervailing Duty Determination, 82 FR 53477 (November 
16, 2017) (CVD Final Determination) and accompanying IDM (CVD Final 
Determination IDM).
    \18\ See AD Preliminary Determination PDM at 23-24; see also AD 
Final Determination IDM at Comment 3.
    \19\ See AD Preliminary Determination PDM at 23-24; see also AD 
Final Determination IDM at Comment 3.
    \20\ A so-called ``cost PMS'' is addressed by section 773(e) of 
the Act. See AD Preliminary Determination and accompanying PDM at 20 
(unchanged in AD Final Determination); see also AD Final 
Determination IDM at Comment 3.
    \21\ See AD Preliminary Determination PDM at 23-24; see also AD 
Final Determination IDM at Comment 3.
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    In the CVD investigation, we concluded that domestic prices for 
soybeans were below world market prices by more than $100 per metric 
ton, depending on the month, as a result of the export tax on 
soybeans.\22\ We also concluded that ``the effect on soybean prices 
paid by the respondents is not incidental to, but a direct result of, a 
system designed by the GOA to ensure the availability of relatively 
low-priced soybeans for domestic processing industries, notably the 
biodiesel industry.'' \23\ We explained that the GOA had stated 
``export duties are a valid development tool, since they enable many 
developing countries to cease being mere suppliers of raw materials,'' 
\24\ and that the intention of its adjustment to the export tax on 
soybeans was to reduce domestic soybean prices in the context of rising 
world market prices.\25\ We thus concluded that the GOA entrusts or 
directs private parties (i.e., soybean growers) to provide soybeans to 
processing industries, including the biodiesel industry, at less than 
adequate remuneration (LTAR), within the meaning of section 
771(5)(B)(iii) of the Act.\26\ Because the record also indicated the 
subsidy was specific (section 771(5A)(D)(iii)(I) of the Act) and 
provided a benefit (section 771(5)(E)(iv) of the Act and 19 CFR 
351.511(a)(1)), we determined the subsidy was countervailable.\27\
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    \22\ See CVD Preliminary Determination PDM at 30.
    \23\ Id. at 29.
    \24\ Id.; see also the Petition, dated March 23, 2017, at Volume 
I (CVD Petition) at CVD-ARG-08 (the GOA's statements to the World 
Trade Organization (WTO) in ``Trade Policy Review Report by the 
Secretariat: Argentina (Revision)'' WT/TPR/S/277/Rev.1 (June 14, 
2013)) (placed on the record of these segments by Memorandum, 
``Additional Information Concerning the Preliminary Changed 
Circumstances Reviews of Biodiesel,'' July 1, 2019 (Additional 
Information Memo)).
    \25\ See CVD Preliminary Determination PDM at 29.
    \26\ Id. at 29.
    \27\ Id. at 29-30.
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    In its CCR requests, the GOA asserts that significant changes to 
its export tax regime warrant reconsideration of the cash deposit rates 
established in the AD and CVD final determinations.\28\ The GOA 
provided information indicating that, since the POIs, changes in the 
export tax regime have been effectuated, which was a key element in 
Commerce's analysis of: (1) The PMS finding concerning the cost of 
soybean input prices in the AD investigation; and (2) the soybeans for 
LTAR program in the CVD investigation.\29\ In particular, the GOA 
attached four legislative decrees effecting changes across its export 
tax regime, including changes to the export

[[Page 32716]]

taxes applied to soybeans and their derivative products, including 
biodiesel:
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    \28\ See Requests for CCRs at 1-2.
    \29\ Id. at 2 and 4; see also AD Final Determination IDM at 
Comment 3 and CVD Final Determination IDM at Comment 1, which 
discussed these aspects of the final determinations.
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    (1) Decree 1343/2016 (December 30, 2016), introducing monthly 
reductions of 0.5 percent to the export taxes on soybeans, soybean oil, 
soymeal, and soybean pellets, beginning in January 2018; \30\
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    \30\ See Requests for CCRs at Attachment 1.
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    (2) Decree 1025/2017 (December 12, 2017), raising the export tax on 
biodiesel from zero to 8 percent, effective January 1, 2018; \31\
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    \31\ See GOA IQR at Appendix V.
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    (3) Decree 468/2018 (May 24, 2018), further raising the export tax 
on biodiesel from 8 to 15 percent, effective July 1, 2018; \32\ and,
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    \32\ See Requests for CCRs at Attachment 3.
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    (4) Decree 793/2018 (September 3, 2018), further reducing the 
export tax on soybeans, soybean oil, and soymeal to 18 percent, 
effective September 4, 2018.\33\
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    \33\ Id. at Attachment 2.
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    Decree 793/2018, in addition to decreasing the export tax on 
soybeans, imposed new, temporary taxes on all products exported from 
Argentina, equating to an additional 10.3 percent tax for exports of 
both soybeans and biodiesel.\34\ Thus, as a result of the four decrees, 
as of September 2018, the export tax on soybeans stood at 28.3 percent 
(nearly identical to where it was during the POIs) and the export tax 
on biodiesel stood at 25.3 percent (versus 3.96 percent through May 
2016 and 5.04 percent from June 2016 until June 2017, at which point it 
was lowered to zero).\35\
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    \34\ See GOA IQR at 3-4.
    \35\ See the Petition at Exhibit CVD-ARG-05 (placed on the 
record of these segments by Additional Information Memo).
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    According to the decrees, the changes to the tax rates were 
``necessary to continue fostering the convergence between the export 
tax applicable to {soybeans, soybean oil, soymeal{time}  and that 
applicable to biodiesel,'' \36\ and ``in order to, among other 
objectives, implement the monetary, exchange or foreign trade policy, 
to stabilize internal prices and to address public financial needs.'' 
\37\ The preamble of Decree 793/2018 references an underlying statutory 
regime, as well as the GOA's 2018 national budget, noting concerns with 
ensuring ``fiscal convergence, an efficient tax policy and the gradual 
reduction of the tax burden.'' \38\ Additionally, in response to a 
request from Commerce, the GOA provided its economic reform proposal, 
as submitted to the International Monetary Fund (IMF),\39\ as support 
for its claims that the export tax revisions are ``aimed at reaching a 
gradual convergence between the export tax applicable to soybeans, 
soybean oil and soymeal that are applicable to biodiesel. In addition, 
they served revenue-collection purposes and also pursued the 
stabilization of internal prices, in light of a dire financial 
situation during 2018 and the steep devaluation of the national 
currency.'' \40\
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    \36\ See Decree 486/2018; see also Requests for CCRs at 
Attachment 3.
    \37\ See Decree 793/2018; see also Requests for CCRs at 
Attachment 2.
    \38\ See Decree 793/2018.
    \39\ See GOA IQR at Appendix III (Letter to Christine Lagarde, 
Managing Director, IMF, ``Letter of Intent, Memorandum of Economic 
and Financial Policies, and Technical Memorandum of Understanding,'' 
dated October 17, 2018 (IMF Proposal)).
    \40\ Id. at 1.
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Legal Framework

    Pursuant to section 751(b)(1) of the Act, and 19 CFR 351.216(d), 
Commerce will conduct a CCR of an AD or CVD order upon receipt of a 
request from an interested party which demonstrates changed 
circumstances sufficient to warrant such a review. Section 751(b)(4) of 
the Act also provides that Commerce may not conduct a CCR of an 
investigation determination within 24 months of the date of the 
investigation determination in the absence of ``good cause.'' Section 
351.216 of Commerce's regulations, as well as 19 CFR 351.221, provide 
rules governing the conduct of CCRs.
    Neither the statute nor the regulation provide a definition of 
``changed circumstances'' nor explain what aspects of a determination 
may be reconsidered in light of such changed circumstances. In 
practice, Commerce has conducted CCRs to address a wide variety of 
issues, which have resulted in various determinations, including 
changes to cash deposit rates.\41\ Where Commerce determines to conduct 
a CCR within 24 months of an investigation final determination, the 
purpose is not to reconsider the validity of the determinations made in 
the AD or CVD investigations, which were based on the circumstances in 
existence during the POIs. Rather, the purpose of the CCRs is to 
consider whether circumstances have changed since the end of the POIs 
such that the cash deposit rates established by the final 
determinations (and put into effect by the Orders) are no longer the 
best estimates of prospective dumping and subsidization and therefore 
are no longer appropriate for purposes of collecting deposits.
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    \41\ See, e.g., Aluminum Extrusions from the People's Republic 
of China: Final Results of Expedited Changed Circumstances Review, 
83 FR 45609 (September 10, 2018) (finding sufficient information of 
changed circumstances to recalculate certain cash deposit rates); 
Certain Steel Nails From Malaysia: Final Results of Antidumping Duty 
Changed Circumstances Review, 82 FR 34476 (July 25, 2017) (finding 
sufficient information of changed circumstances to collapse certain 
entities and to utilize the correct cash deposit rate); and Final 
Results of Changed Circumstances Administrative Reviews; Pure 
Magnesium and Alloy Magnesium From Canada, 57 FR 54047 (November 16, 
1992) (finding sufficient information to determine changed 
circumstances to the major subsidy program at issue in the 
underlying investigation).
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AD Analysis

    Commerce preliminarily finds that there are insufficient changed 
circumstances warranting a reconsideration related to the AD Final 
Determination. As described above, Commerce determined that a PMS 
existed in Argentina with regard to the price of soybeans as a 
constituent element of the COP of biodiesel in Argentina.\42\ The Trade 
Preferences Extension Act of 2015 \43\ added language to section 773(e) 
of the Act, which states that ``if a particular market situation exists 
such that the cost of materials and fabrication or other processing of 
any kind does not accurately reflect the cost of production in the 
ordinary course of trade, the administering authority may use another 
calculation methodology under this subtitle or any other calculation 
methodology.''
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    \42\ See AD Preliminary Determination PDM at 24.
    \43\ See Trade Preferences Extension Act of 2015, Public Law 
114-27, 129 Stat. 362 (2015).
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    In this context, we determined that the GOA's intervention in 
soybean pricing through the export tax of 30 percent on soybeans 
rendered the domestic price of soybeans paid by respondent biodiesel 
producers outside the ordinary course of trade.\44\ This PMS finding 
involved: (1) Numerous studies indicating that the export tax on 
soybeans was designed to generate a low-cost surplus of soybeans for 
domestic use, thereby artificially depressing soybean prices for 
domestic consumption; (2) the fact that the export tax on soybeans was 
not intended as an ordinary revenue measure, but rather was unique to 
soybeans, as soybeans were the only commodity subject to an export tax 
during the POI; and (3) record evidence that Argentine prices for 
soybeans were nearly 40 percent lower than world market prices for 
soybeans during the POI.\45\ Accordingly, based on the totality of the 
circumstances, Commerce rejected the prices paid by the respondents in 
the AD investigation as part of the COP calculation, as they did ``not 
accurately reflect the cost of

[[Page 32717]]

production in the ordinary course of trade,'' and replaced these prices 
with a market-determined price.\46\
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    \44\ See AD Preliminary Determination PDM at 23-24; see also AD 
Final Determination IDM at Comment 3.
    \45\ See AD Preliminary Determination PDM at 23-24; see also AD 
Final Determination IDM at Comment 3.
    \46\ See AD Preliminary Determination PDM at 23-24; see also AD 
Final Determination IDM at Comment 3.
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    For purposes of this CCR, record evidence shows soybean prices in 
Argentina still remain well below world market prices. Specifically, 
according to the GOA's data, since September 2018 (when the export tax 
on biodiesel was raised to 25.3 percent), the gap between domestic and 
world prices has ranged between $50 per ton to nearly $100 per ton, or, 
in terms of a percentage, domestic prices have been 30 percent lower 
than world prices since last September.\47\ This is almost the same gap 
that existed during the POI.\48\
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    \47\ See GOA IQR at 14.
    \48\ See AD Final Determination IDM at Comment 3; see also 
Petitioner's Letter, ``Petitioner's Particular Market Situation 
Allegation Regarding Respondent's Home and Third Country Market 
Sales and Cost of Production,'' dated August 2, 2017 (placed on the 
record of these segments by Additional Information Memo) at 45 and 
Exhibit 37-B.
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    While the GOA speculates that the relationship between domestic and 
world prices is the result of several factors, such as currency 
fluctuations, trade measures imposed by China on U.S. soybean 
shipments, and the weather, it provided no studies, publications, or 
detailed analyses demonstrating whether such factors might explain the 
current gap between prices.\49\ Instead, the GOA argues that it is 
impossible to isolate the effects of any one cause. However, evidence 
on the record demonstrates that there is a discernible correlation 
between the size of the so-called price gap and the amount of the 
export tax. For instance, from 1994 through 2001 (when the export tax 
rate was 3.5 percent), domestic soybean prices in Argentina were 
slightly less than the world soybean price.\50\ In 2001, the difference 
in prices was $26 per metric ton.\51\ By the end of 2002, after the 
export tax increased to 23.5 percent, the difference between Argentine 
domestic soybean prices and world market prices had grown to nearly $50 
a metric ton.\52\ Between 2003 and 2006, the average price differential 
increased to over $100 per metric ton.\53\ In 2007, when the GOA 
increased the export tax from 23.5 percent to 35 percent, the price 
differential increased to $165 per metric ton.\54\ The price 
differential increased to $200 per metric ton in 2015.\55\ In 2016, 
after the GOA reduced the export tax to 30 percent, the price 
differential decreased to $146 per metric ton. More recently, as the 
GOA began reducing the export tax by 0.50 percent per month in January 
2018, the gap began closing.\56\ After the GOA increased the export tax 
to 28.3 percent in September 2018, the gap began expanding once again, 
approaching $100 per metric ton in January 2019. In any event, as we 
indicated in the AD Final Determination in response to a similar 
argument by the Vicentin Group, the PMS provisions of the Act do not 
require a strict causal finding between the distortive government 
action and the observed distorted price.\57\
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    \49\ See GOA IQR at 11-12. The GOA states that it ``doubts'' the 
export tax has had a significant effect on prices.
    \50\ See CVD Petition at 26 (placed on the record of these 
segments by Additional Information Memo).
    \51\ Id. at CVD-ARG-21 (placed on the record of these segments 
by Additional Information Memo).
    \52\ Id.
    \53\ Id.
    \54\ Id.
    \55\ Id.
    \56\ See GOA IQR at 13 (comparison of Argentine prices with 
Chicago commodities exchange prices) and 4 (Table 1: Export Tax 
Rates).
    \57\ See AD Final Determination IDM at Comment 3.
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    In addition, as noted, multiple publications on the record of the 
AD investigation concluded that the export tax leads to lower soybean 
prices (and was intended to do so).\58\ The GOA has provided no 
evidence in the form of studies, publications, or detailed analyses to 
undermine these publications, or to demonstrate that the export tax on 
soybeans no longer impedes external trade and competitive domestic 
pricing for soybeans.
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    \58\ See AD Preliminary Determination PDM at 23-24; see also AD 
Final Determination IDM at Comment 3.
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    We recognize that the record indicates that the design and 
structure of the export tax regime has changed, which affects the 
``ordinary revenue measure'' prong of our PMS analysis in the AD 
investigation. Specifically, in the AD Final Determination, we found 
that the export tax regime was not part of an ordinary revenue measure, 
as it was unique to soybeans--the only commodity product subject to an 
export tax during the POI.\59\ The record of this CCR demonstrates that 
is no longer the case. As discussed above, Decree 1025/2017 and Decree 
468/2018 increased the export tax on biodiesel from zero to 15 percent, 
while Decree 793/2018, in addition to decreasing the export tax on 
soybeans, imposed new, temporary taxes on all products exported from 
Argentina.\60\ Thus, we find that the export tax is no longer designed 
for downstream development purposes, but is part of an overall revenue 
improvement measure and a tax scheme applied to exports of both 
agricultural and industrial commodities.
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    \59\ See AD Final Determination IDM at Comment 3.
    \60\ See GOA IQR at 3-4, Appendix V; see also Requests for CCRs 
at Attachments 2 and 3.
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    Nevertheless, after reviewing the record evidence in this CCR under 
the totality of circumstances analysis of the AD investigation, we find 
that there remains a price gap that still exists between domestic and 
world prices, as a result of the export tax on soybeans, which 
continues to impede external trade and competitive domestic pricing for 
soybeans. Thus, we find that there are insufficient changed 
circumstances to warrant a reconsideration of our finding that the 
GOA's intervention in soybean pricing through the export tax on 
soybeans renders prices paid by biodiesel producers outside the 
ordinary course of trade. The internal soybean market is still clearly 
distorted by GOA intervention and therefore a PMS still exists.
    We also find that our PMS analysis is unaffected by the imposition 
of a specific export tax on biodiesel. As noted above, during the POI 
there was an export tax on biodiesel of 3.96 percent through May 2016 
and 5.04 percent from June 2016 until the end of the POI in December 
2016.\61\ After dropping down to zero, the export tax is now 25.3 
percent, as compared to the soybean export tax of 28.3 percent. We find 
that an export tax on soybeans continues to artificially depress 
soybean prices for domestic consumption, regardless of the presence or 
magnitude of an export tax on biodiesel. Simply put, Argentine soybean 
growers continue to accept depressed domestic prices rather than 
exporting and paying a significant export tax.
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    \61\ See CVD Petition at Exhibit CVD-ARG-05 (placed on the 
record of these segments by Additional Information Memo).
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CVD Analysis

    In the CVD investigation, Commerce examined an allegation that 
soybeans were provided for LTAR through soybean export restraints, 
which the CVD Petition described as ``high export taxes and other 
regulations relating to soybeans,'' \62\ which entrust and direct 
soybean growers to provide a subsidy ``benefiting the industry under 
investigation.'' \63\ In the CVD Preliminary Determination, Commerce 
determined that the export tax on soybeans amounted to a 
countervailable

[[Page 32718]]

subsidy because, among other reasons,\64\ the GOA ``entrusted or 
directed'' a private entity (i.e., soybean growers) to make a financial 
contribution, pursuant to section 771(5)(B)(iii) of the Act, in the 
form of the provision of goods or services to biodiesel producers for 
LTAR, pursuant to sections 771(5)(D)(iii) and 771(5)(E)(iv) of the 
Act.\65\ We explained that where, as was the case in the underlying 
investigation and is still the case here, there is no ``direct 
legislation to entrust or direct private parties to provide a financial 
contribution,'' Commerce may ``rely on circumstantial information to 
determine that there was entrustment or direction.'' \66\ We further 
explained that, in such a situation, Commerce employs a two-part test 
examining the relevant policy and practices of the foreign 
government.\67\ Specifically, Commerce looks to: (1) Whether the 
government has in place during the relevant period a governmental 
policy to support the respondent(s); and (2) whether evidence on the 
record establishes a pattern of practices on the part of the government 
to act upon that policy to entrust or direct the associated private 
entity decisions.\68\ We then evaluated the record and determined that 
the export tax on soybeans constituted ``a policy to support production 
of biodiesel and other domestic processing industries,'' \69\ and that 
``{t{time} he effect on soybean prices paid by the respondent is not 
incidental to, but a direct result of, a system designed by the GOA to 
ensure the availability of relatively low-priced soybeans for domestic 
processing industries, notably the biodiesel industry.'' \70\ In other 
words, Commerce concluded the program existed to ``provide{ {time}  an 
incentive for the development of domestic manufacturing or processing 
industries with higher value-added exports,'' \71\ such as biodiesel 
production. This conclusion was derived from an examination of the 
``pertinent GOA laws and regulations'' as well as other, third-party 
evidence indicating the program was a ``development tool'' designed 
``to help'' downstream producers.\72\ Thus, the focus is not on whether 
the program has led to lower input prices, but whether the program is 
designed and structured to entrust and direct soybean producers to 
provide Argentine biodiesel producers with soybeans for LTAR.\73\
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    \62\ Id. at 16 (placed on the record of these segments by 
Additional Information Memo).
    \63\ Id. at 17 (placed on the record of these segments by 
Additional Information Memo).
    \64\ Commerce also found that the provision of soybeans was 
specific and provided a benefit.
    \65\ See CVD Preliminary Determination PDM at 30.
    \66\ Id. at 28 (citing Supercalendered Paper from Canada: Final 
Affirmative Countervailing Duty Determination, 80 FR 63535 (October 
20, 2015) and accompanying IDM at 125).
    \67\ See CVD Preliminary Determination PDM at 28. The CIT 
affirmed Commerce's approach in Hynix Semiconductor, Inc. v. United 
States, 391 F. Supp. 2d 1337 (CIT 2005), aff'd after remand 425 F. 
Supp. 2d 1287 (CIT 2006).
    \68\ See CVD Preliminary Determination PDM at 28.
    \69\ Id. at 29.
    \70\ Id.
    \71\ Id.
    \72\ Id.
    \73\ In the CVD Initiation Checklist, we noted that the 
``Biofuels Law'' is intended to ``promote and control sustainable 
biofuel production and use.'' See CVD Initiation Checklist at 8-9 
(emphasis in the original) (placed on the record of these segments 
by Additional Information Memo); see also Petition at CVD-ARG-27 
(``Regime to Regulate and Promote Sustainable Biofuel Product and 
Use,'' Law 26,093 (April 19, 2006) (placed on the record of these 
segments by Additional Information Memo).
---------------------------------------------------------------------------

    We preliminarily determine that the evidence that supported a 
finding of entrustment and direction in the original investigation no 
longer exists. Based on the record before us, we no longer find that 
Argentina's export tax regime is designed and structured to encourage 
the development of the downstream biodiesel industry or to benefit the 
respondents. This is based on the changes cited by the GOA to the 
export tax on soybeans as well as to the export taxes on downstream 
products (including biodiesel) for which soybeans are a major 
input.\74\ Contrary to the petitioner's contention that the export tax 
on biodiesel is irrelevant to both the AD and CVD CCRs, Commerce 
preliminarily concludes that the analytical framework for finding 
``entrustment and direction'' of private parties (as described above), 
which is concerned with more than the existence of distorted prices, 
and the record of the CVD investigation itself, indicate that we should 
consider the export tax on biodiesel in relation to the export tax on 
soybeans.\75\ As discussed above, the CVD Petition describes the 
allegation as being based on the export tax on soybeans and other 
regulations relating to soybeans, and also repeatedly refers to the 
importance of the difference between the level of export taxation on 
soybeans compared to downstream products such as biodiesel.\76\ This 
same approach, examining the totality of record information and the 
unique circumstances of the case, was taken in the CVD Initiation 
Checklist, where Commerce concluded:
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    \74\ See CVD Initiation Checklist at 7.
    \75\ By comparison, in the PMS analysis undertaken in the AD 
investigation, as discussed above, we are concerned simply with 
whether the GOA's intervention has led to distorted prices that are 
outside the ordinary course of trade.
    \76\ See CVD Petition at 19-23 (placed on the record of these 
segments by Additional Information Memo).

    The overall configuration of the GOA's export taxes, including 
the differences between export taxes on soybeans and soybean 
derivatives, in addition to the intent of the biofuels law to 
promote the production of and use of biofuels, and to benefit ``all 
projects for the establishment of biofuel industries,'' indicates 
that the GOA has implemented the export taxes with the intent of 
entrusting and directing soybean suppliers to provide a financial 
contribution to biodiesel producers.\77\
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    \77\ See CVD Initiation Checklist at 9 (emphasis added).

    The significance of the relationship between the two taxes is 
apparent elsewhere on the record of the investigation, including the 
third-party assessments submitted by the petitioner to support the 
allegation and examined by Commerce during the investigation.\78\ For 
example, at the outset of our analysis of the program in the CVD 
Preliminary Determination, Commerce highlights three third-party 
sources. Each source references the differential as being important if 
the design of the scheme is to benefit downstream producers:
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    \78\ See CVD Preliminary Determination PDM at 25-26.
---------------------------------------------------------------------------

     International Renewable Energy Agency, ``Renewable Energy 
Policy Brief--Argentina,'' dated June 2015: ``Differential export taxes 
for biofuels versus other products derived from the same feedstock 
promoted the export of biofuels, especially biodiesel. For example, in 
2008 export taxes were 35% for soy bean, 32% for soy oil, but only 5% 
for biodiesel.'' \79\
---------------------------------------------------------------------------

    \79\ See CVD Petition at Exhibit CVD-ARG-03.
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     USDA Foreign Agricultural Service, ``Argentina Biofuels 
Annual,'' dated July 7, 2016: ``A factor which contributed to the 
expansion of the local biodiesel industry since its beginnings has been 
the differential export tax on biodiesel vis-a-vis soybean oil. Soybean 
oil exports are currently taxed 27 percent while biodiesel exports are 
taxes 5.04 percent.'' \80\
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    \80\ Id. at Exhibit CVD-ARG-05.
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     OECD Trade Policy Studies, ``The Economic Impact of Export 
Restrictions on Raw Materials,'' dated 2010: ``Export restrictions 
provide downstream processing industries with an advantage. 
Differential export duty rates play an important role in this regard: 
higher rates for raw materials or input products while lower rates 
apply for finished products. For example, in Argentina the export duty 
rates for soybean, soybean oil and biodiesel were 27.5%, 24.5%, and 5% 
respectively as of 2007. The price advantage provided to domestic 
downstream industries can distort and reduce competition in both 
domestic and foreign markets.'' \81\
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    \81\ Id. at Exhibit CVD-ARG-07 (emphasis added).

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[[Page 32719]]

    Thus, we preliminarily determine that the convergence of the export 
tax rates on soybeans and biodiesel demonstrates that the tax regime as 
it pertains to soybeans and its derivatives is no longer about 
benefitting or encouraging the development of the domestic biodiesel 
industry. The shift in the design is also evident from the economic 
reform proposal Argentina has submitted to the IMF, corroborating the 
GOA's claims that it has shifted the focus of its export tax program 
from selective economic development to general revenue collection and 
economic stability. In relevant part, the proposal, dated October 17, 
2018, states:
     New and increased export taxes are one of two fiscal 
measures adopted by Argentina as a means of fairly achieving revenue 
gains and the macroeconomic and financial objectives promised to the 
IMF (the other being a wealth tax).\82\
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    \82\ IMF Proposal at 2.
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     The GOA has ``unraveled a myriad of economic distortions 
put in place by the previous administration,'' \83\ and pledges to 
continue ``revisions to the current distortive systems of taxes and 
subsidies.'' \84\
---------------------------------------------------------------------------

    \83\ Id. at 4.
    \84\ Id. at 6.
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     The commitments are part of a request to the IMF for 
access to an additional $7.1 billion in reserve financing, and a 
recognition that Argentina must ``no longer live beyond its means'' and 
must ``spend only what it can raise in taxes.'' \85\
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    \85\ Id. at 4.
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    The OECD report referenced above also states that in Argentina 
export taxes have historically been an important source of revenue, 
unlike in other countries where they have been used primarily as a 
development tool, thus supporting Argentina's characterization of the 
revised tax regime.
    Given this change, Commerce preliminarily determines that the 
current program provides no third-party financial contribution through 
an entrustment and direction mechanism and is therefore, as currently 
designed, not countervailable. Therefore, Commerce preliminarily 
determines to lower the CVD cash deposit rates by the amount determined 
for the program in the CVD final determination.

Preliminary Results of Changed Circumstances Reviews

    Pursuant to section 751(b) of the Act and 19 CFR 351.216, Commerce 
preliminarily determines that changed circumstances do not exist 
warranting any changes under the AD order, but that changed 
circumstances do exist warranting recalculation of the total CVD cash 
deposit rates as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                Subsidy rate
                                                              Total subsidy    determined for     Revised total
                                                             rate under the   the provision of    subsidy rate
                                                                CVD order         soybeans       pursuant to the
                                                                (percent)         (percent)       CCR (percent)
----------------------------------------------------------------------------------------------------------------
LDC Argentina S.A.........................................             72.28             72.09              0.19
Vicentin S.A.I.C..........................................             71.45             61.15             10.30
All Others *..............................................             71.87               n/a             10.30
----------------------------------------------------------------------------------------------------------------
* Because the revised cash deposit rate determined for LDC Argentina S.A. is de minimis, we have based the all
  others rate exclusively on the rate for Vicentin S.A.I.C.

Cash Deposits

    If the revised cash deposit rates indicated above are maintained 
for the final results of the CVD CCR, Commerce will issue instructions 
to U.S. Customs and Border Protection (CBP) revising the cash deposits 
applied to all entries of subject merchandise entered, or withdrawn 
from warehouse, for consumption, on or after the date of publication of 
the final results in the Federal Register. Commerce will instruct CBP 
not to collect cash deposits for producers or exporters determined to 
have a total subsidy rate below de minimis. Commerce will instruct CBP 
to continue to suspend all entries of subject merchandise regardless of 
whether any rate determined pursuant to the final results of these CCRs 
is zero or de minimis, and such entries will be subject to 
administrative review if one is requested.
    If the above preliminary results are maintained for the final 
results of the AD CCR, Commerce will not issue instructions to CBP 
under the AD order as no changes to the cash deposit rates need to be 
effectuated.

Public Comment

    Interested parties may submit case briefs no later than 30 days 
after the date of publication of these preliminary results of review in 
the Federal Register.\86\ Rebuttal briefs, limited to issues raised in 
the case briefs, may be filed by no later than five days after the 
deadline for filing case briefs.\87\ Parties that submit case or 
rebuttal briefs are encouraged to submit with each argument: (1) A 
statement of the issue; (2) a brief summary of the argument; and (3) a 
table of authorities.\88\ All briefs are to be filed electronically 
using ACCESS.\89\ An electronically filed document must be received 
successfully in its entirety by ACCESS by 5:00 p.m. Eastern Time on the 
day on which it is due.\90\
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    \86\ See 19 CFR 351.309(c)(1)(ii).
    \87\ See 19 CFR 351.309(d)(1).
    \88\ See 19 CFR 351.309(c)(2) and (d)(2).
    \89\ See 19 CFR 351.309(b) and (f).
    \90\ See 19 CFR 351.303(b).
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    Any interested party may submit a request for a hearing to the 
Assistant Secretary of Enforcement and Compliance using ACCESS within 
30 days of publication of this notice in the Federal Register.\91\ 
Hearing requests should contain the following information: (1) The 
party's name, address, and telephone number; (2) the number of 
participants; and (3) a list of the issues to be discussed. Oral 
presentations will be limited to issues raised in the briefs.\92\ If a 
request for a hearing is made, parties will be notified of the time and 
date of the hearing, which will be held at the U.S. Department of 
Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.\93\
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    \91\ See 19 CFR 351.310(c).
    \92\ Id.
    \93\ See 19 CFR 351.310(d).
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Final Results of the Review

    Unless extended, in accordance with 19 CFR 351.216, Commerce 
intends to issue the final results of this CCR not later than 270 days 
after the date on which the review was initiated.

Notification to Interested Parties

    Commerce is issuing these results in accordance with sections 
751(b)(1) and 777(i) of the Act and 19 CFR 351.216 and 
351.221(c)(3)(i).


[[Page 32720]]


    Dated: July 1, 2019.
Jeffrey I. Kessler,
Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2019-14556 Filed 7-8-19; 8:45 am]
 BILLING CODE 3510-DS-P