[Federal Register Volume 89, Number 102 (Friday, May 24, 2024)]
[Notices]
[Pages 45829-45832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11478]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-153]


Certain Paper Shopping Bags From the People's Republic of China: 
Final Affirmative Countervailing Duty Determination and Final 
Affirmative Determination of Critical Circumstances

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

SUMMARY: The U.S. Department of Commerce (Commerce) determines that 
countervailable subsidies are being provided to producers/exporters of 
certain paper shopping bags (paper bags) from the People's Republic of 
China (China). The period of investigation (POI) is January 1, 2022, 
through December 31, 2022.

DATES: Applicable May 24, 2024.

FOR FURTHER INFORMATION CONTACT: Seth Brown, AD/CVD Operations, Office 
IX, Enforcement and Compliance, International Trade Administration, 
U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, 
DC 20230; telephone: (202) 482-0029.

[[Page 45830]]


SUPPLEMENTARY INFORMATION: 

Background

    On November 6, 2023, Commerce published its Preliminary 
Determination in the Federal Register and invited interested parties to 
comment.\1\ Subsequently, on December 7, 2024, Commerce released its 
Post-Preliminary Analysis.\2\ For a complete discussion of the events 
that followed the Preliminary Determination, see the Issues and 
Decision Memorandum.\3\
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    \1\ See Certain Paper Shopping Bags from the People's Republic 
of China: Preliminary Affirmative Determination of Countervailable 
Subsidies, Preliminary Affirmative Determination of Critical 
Circumstances, and Alignment of Final Determination With Final 
Antidumping Duty Determination, 88 FR 76180 (November 6, 2023) 
(Preliminary Determination), and accompanying Preliminary Decision 
Memorandum (PDM); see also Certain Paper Shopping Bags from the 
People's Republic of China: Preliminary Affirmative Determination of 
Countervailable Subsidies, Preliminary Affirmative Determination of 
Critical Circumstances, and Alignment of Final Determination With 
Final Antidumping Duty Determination; Correction, 88 FR 80273 
(November 17, 2023).
    \2\ See Memorandum, ``Post-Preliminary Analysis Memorandum for 
the Countervailing Duty Investigation of Certain Paper Shopping Bags 
from the People's Republic of China,'' dated December 7, 2023 (Post-
Preliminary Analysis).
    \3\ See Memorandum, ``Issues and Decision Memorandum for the 
Final Affirmative Determination in the Countervailing Duty 
Investigation of Certain Paper Shopping Bags from the People's 
Republic of China,'' dated concurrently with, and hereby adopted by, 
this notice (Issues and Decision Memorandum).
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    The Issues and Decision Memorandum is a public document and is made 
available to the public via Enforcement and Compliance's Antidumping 
and Countervailing Duty Centralized Electronic Service System (ACCESS). 
ACCESS is available to registered users at https://access.trade.gov. In 
addition, a complete version of the Issues and Decision Memorandum can 
be accessed directly at https://access.trade.gov/public/FRNoticesListLayout.aspx.

Scope of the Investigation

    The products covered by this investigation are paper bags from 
China. For a complete description of the scope of this investigation, 
see Appendix I.

Scope Comments

    During the course of this investigation, Commerce received scope 
comments from interested parties. Commerce issued a Preliminary Scope 
Decision Memorandum to address these comments and set aside a period of 
time for parties to address scope issues in scope-specific case and 
rebuttal briefs.\4\ We received comments from interested parties on the 
Preliminary Scope Decision Memorandum, which we addressed in the Final 
Scope Decision Memorandum.\5\ We did not make any changes to the scope 
of the investigation from the scope published in the Preliminary 
Determination, as noted in Appendix I.
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    \4\ See Memorandum, ``Less-Than-Fair-Value and Countervailing 
Duty Investigations of Certain Paper Shopping Bags from Cambodia, 
the People's Republic of China, Colombia, India, Malaysia, Portugal, 
Taiwan, the Republic of Turkey, and the Socialist Republic of 
Vietnam: Preliminary Scope Decision Memorandum,'' dated December 27, 
2023 (Preliminary Scope Decision Memorandum).
    \5\ See Memorandum, ``Less-Than-Fair-Value and Countervailing 
Duty Investigations of Certain Paper Shopping Bags from Cambodia, 
the People's Republic of China, Colombia, India, Malaysia, Portugal, 
Taiwan, the Republic of Turkey, and the Socialist Republic of 
Vietnam: Final Scope Decision Memorandum,'' dated March 11, 2024 
(Final Scope Decision Memorandum).
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Verification

    Commerce was unable to conduct on-site verification of the 
information relied on in making its final determination in this 
investigation. However, in December 2023 and January 2024, we took 
additional steps in lieu of on-site verifications to verify the 
information relied upon in making this final determination, in 
accordance with section 782(i) of the Act, by conducting virtual 
verifications of the mandatory respondents Fujian Nanwang Environment 
Protection Scien-tech Co., Ltd. (Fujian Nanwang) and Dongzheng Paperbag 
(DaLian) Factory (Dongzheng).

Analysis of Subsidy Programs and Comments Received

    The subsidy programs under investigation and the issues raised in 
the case and rebuttal briefs by the parties in this investigation are 
discussed in the Issues and Decision Memorandum. For a list of the 
issues raised by interested parties and addressed in the Issues and 
Decision Memorandum, see Appendix II.

Methodology

    Commerce conducted this investigation in accordance with section 
701 of the Tariff Act of 1930, as amended (the Act). For each of the 
subsidy programs found to be countervailable, Commerce determines that 
there is a subsidy, i.e., a financial contribution by an ``authority'' 
that gives rise to a benefit to the recipient, and that the subsidy is 
specific.\6\ For a full description of the methodology underlying our 
final determination, see the Issues and Decision Memorandum.
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    \6\ See sections 771(5)(B) and (D) of the Act regarding 
financial contribution; see also section 771(5)(E) of the Act 
regarding benefit; and section 771(5A) of the Act regarding 
specificity.
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    In making this final determination, Commerce relied, in part, on 
facts otherwise available, including with an adverse inference, 
pursuant to sections 776(a) and (b) of the Act. For a full discussion 
of our application of adverse facts available (AFA), see the 
Preliminary Determination PDM \7\ and the Issues and Decision 
Memorandum at the section entitled ``Uses of Facts Available and 
Application of Adverse Inferences.''
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    \7\ See Preliminary Determination PDM at 7-28.
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Final Affirmative Determination of Critical Circumstances

    In the Preliminary Determination, Commerce preliminary determined, 
in accordance with sections 703(e)(1) and (b) of the Act, and 19 CFR 
351.206, that critical circumstances exist with respect to imports of 
subject merchandise for Dongzheng, Fujian Nanwang, the non-responsive 
companies,\8\ and all other producers and/or exporters.\9\ For this 
final determination, in accordance with section 705(a)(2) of the Act as 
well as our analysis of comments received regarding our affirmative 
preliminary determination of critical circumstances,\10\ Commerce 
continues to find that critical circumstances exist with respect to 
imports of subject merchandise for Dongzheng, Fujian Nanwang, the non-
responsive companies, and all other producers and/or exporters. For a 
full description of the methodology and results of our critical 
circumstances analysis, see the Issues and Decision Memorandum.
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    \8\ The non-responsive companies are: (1) Bagitan Packaging; (2) 
Changzhou Anjucheng; (3) Courage Packaging; (4) Evertrust Packaging; 
(5) Geotegrity EcoPack; (6) GrandIntelligent; (7) Li & Fung; (8) 
Qingdao Chenyu Packaging Co., Ltd.; (9) Shanghai Macolink Supply 
Chain Management Co., Ltd.; (10) Shanghai Sanxi Paper Co., Ltd.; 
(11) Xiamen C&D Pulp & Paper Co., Ltd.; (12) Xiamen Champion FMCG; 
(13) Xiamen New Idea Packaging Co., Ltd.; and (14) Xiamen Wonderful 
Bag Import and Export Co., Ltd.
    \9\ See Preliminary Determination PDM at 47-49.
    \10\ See Issues and Decision Memorandum at Comment 6.
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Changes Since the Preliminary Determination and Post-Preliminary 
Analysis

    Based on our review and analysis of the information at verification 
and comments received from interested parties, we made changes to the 
subsidy rate calculations for Fujian Nanwang. For a discussion of these 
changes, see the Issues and Decision Memorandum.

All-Others Rate

    Pursuant to section 705(c)(5)(A)(i) of the Act, Commerce will 
determine an all-others rate equal to the weighted-average 
countervailable subsidy rates

[[Page 45831]]

established for exporters and/or producers individually investigation, 
excluding any zero and de minimis countervailable subsidy rates, and 
any rates determined entirely under section 776 of the Act. We continue 
to calculate individual estimated countervailable subsidy rates for 
Fujian Nanwang and Dongzheng that are not zero, de minimis, or based 
entirely on facts otherwise available. Therefore, we calculated the 
all-others rate using a simple average of the individual estimated 
subsidy rates calculated for Fujian Nanwang and Dongzheng.\11\
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    \11\ See Memorandum, ``Calculation of the All Others Rate,'' 
dated concurrently with this notice, at 1.
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Final Determination

    Commerce determines that the following estimated countervailable 
subsidy rate exist for the period January 1, 2022, through December 31, 
2022: \12\
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    \12\ As discussed in the Preliminary Determination, Commerce has 
found the following companies to be cross-owned with Fujian Nanwang: 
Zhuhai Zhongyue Paper Cup Container Co., Ltd.; Anhui Nanwang 
Environmental Protection Technology Co., Ltd.; Xianghe Nanwang 
Environmental Protection Technology Co., Ltd.; and Hubei Nanwang 
Environmental Protection Technology Co., Ltd.

------------------------------------------------------------------------
                                                           Subsidy rate
                         Company                            (percent ad
                                                             valorem)
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Bagitan Packaging.......................................          172.36
Changzhou Anjucheng.....................................          172.36
Courage Packaging.......................................          172.36
Dongzheng Paperbag (DaLian) Factory.....................           40.76
Evertrust Packaging.....................................          172.36
Fujian Nanwang Environment Protection Scien-tech Co.,              42.36
 Ltd \12\...............................................
Geotegrity EcoPack......................................          172.36
GrandIntelligent........................................          172.36
Li & Fung...............................................          172.36
Qingdao Chenyu Packaging Co., Ltd.......................          172.36
Shanghai Macolink Supply Chain Management Co., Ltd......          172.36
Shanghai Sanxi Paper Co., Ltd...........................          172.36
Xiamen C&D Pulp & Paper Co., Ltd........................          172.36
Xiamen Champion FMCG....................................          172.36
Xiamen New Idea Packaging Co., Ltd......................          172.36
Xiamen Wonderful Bag Import and Export Co., Ltd.........          172.36
All Others..............................................           41.56
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Disclosure

    Commerce intends to disclose to interested parties the calculations 
and analysis performed in this final determination within five days of 
any public announcement or, if there is no public announcement, within 
five days of the date of publication of this notice in accordance with 
19 CFR 351.224(b).

Continuation of Suspension of Liquidation

    As a result of our Preliminary Determination, pursuant to sections 
703(d)(1)(B) and (d)(2) of the Act, and because we preliminarily 
determined that critical circumstances existed with respect to 
Dongzheng, Fujian Nanwang, the non-responsive companies, and all other 
producers and/or exporters, we instructed U.S. Customs and Border 
Protection (CBP) to suspend liquidation of entries of subject 
merchandise from China that were entered, or withdrawn from warehouse, 
for consumption, on or after August 8, 2023, which is 90 days prior to 
the date of the publication of the Preliminary Determination in the 
Federal Register.\13\ In accordance with section 703(d) of the Act, we 
instructed CBP to discontinue the suspension of liquidation of all 
entries of subject merchandise entered or withdrawn from warehouse, on 
or after March 5, 2024, but to continue the suspension of liquidation 
of all entries of subject merchandise on or before March 4, 2024.
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    \13\ See Preliminary Determination, 88 FR at 76180.
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    If the U.S. International Trade Commission (ITC) issues a final 
affirmative injury determination, we will issue a countervailing duty 
(CVD) order, reinstate the suspension of liquidation under section 
706(a) of the Act, and require a cash deposit of estimated 
countervailing duties for entries of subject merchandise in the amounts 
indicated above. If the ITC determines that material injury, or threat 
of material injury, does not exist, this proceeding will be terminated, 
and all estimated duties deposited or securities posted as a result of 
the suspension of liquidation will be refunded or cancelled.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our final affirmative determination that countervailable 
subsidies are being provided to producers and exporters of paper bags 
in China. Because the final determination is affirmative, in accordance 
with section 705(b) of the Act, the ITC will make its final 
determination as to whether the domestic industry in the United States 
is materially injured, or threatened with material injury, by reason of 
imports of paper bags from China no later than 45 days after our final 
determination. In addition, we are making available to the ITC all non-
privileged and nonproprietary information related 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, Commerce will issue a CVD order directing CBP to assess, upon 
further instruction by Commerce, CVDs on all imports of the subject 
merchandise that are entered, or withdrawn, for consumption on or after 
the effective date of the suspension of liquidation, as discussed above 
in the ``Continuation of Suspension of Liquidation'' section.

[[Page 45832]]

Administrative Protective Order

    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 which is subject to sanction.

Notification to Interested Parties

    This determination is issued and published in accordance with 
sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).

    Dated: May 17, 2024.
Ryan Majerus,
Deputy Assistant Secretary for Policy and Negotiations, performing the 
non-exclusive functions and duties of the Assistant Secretary for 
Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The products within the scope of this investigation are paper 
shopping bags with handles of any type, regardless of whether there 
is any printing, regardless of how the top edges are finished (e.g., 
folded, serrated, or otherwise finished), regardless of color, and 
regardless of whether the top edges contain adhesive or other 
material for sealing closed. Subject paper shopping bags have a 
width of at least 4.5 inches and depth of at least 2.5 inches.
    Paper shopping bags typically are made of kraft paper but can be 
made from any type of cellulose fiber, paperboard, or pressboard 
with a basis weight less than 300 grams per square meter (GSM).
    A non-exhaustive illustrative list of the types of handles on 
shopping bags covered by the scope include handles made from any 
materials such as twisted paper, flat paper, yarn, ribbon, rope, 
string, or plastic, as well as die-cut handles (whether the punchout 
is fully removed or partially attached as a flap).
    Excluded from the scope are:
     Paper sacks or bags that are of a \1/6\ or \1/7\ barrel 
size (i.e., 11.5-12.5 inches in width, 6.5-7.5 inches in depth, and 
13.5-17.5 inches in height) with flat paper handles or die-cut 
handles;
     Paper sacks or bags with die-cut handles, a grams per 
square meter paper weight of less than 86 GSM, and a height of less 
than 11.5 inches; and
     Paper sacks or bags (i) with non-paper handles made 
wholly of woven ribbon or other similar woven fabric20 and (ii) that 
are finished with folded tops or for which tied knots or t-bar 
aglets (made of wood, metal, or plastic) are used to secure the 
handles to the bags.
    The above-referenced dimensions are provided for paper bags in 
the opened position. The height of the bag is the distance from the 
bottom fold edge to the top edge (i.e., excluding the height of 
handles that extend above the top edge). The depth of the bag is the 
distance from the front of the bag edge to the back of the bag edge 
(typically measured at the bottom of the bag). The width of the bag 
is measured from the left to the right edges of the front and back 
panels (upon which the handles typically are located).
    This merchandise is currently classifiable under Harmonized 
Tariff Schedule of the United States (HTSUS) subheadings 
4819.30.0040 and 4819.40.0040. The HTSUS subheadings are provided 
for convenience and customs purposes only; the written description 
of the scope is dispositive.

Appendix II

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary
II. Background
III. Period of Investigation
IV. Final Critical Circumstances Determination
V. Subsidies Valuation Information
VI. Interest Rates and Benchmarks
VII. Use of Facts Available and Adverse Inferences
VIII. Analysis of Programs
IX. Discussion of the Issues
    Comment 1: Whether Commerce Should Apply Adverse Facts Available 
(AFA) to the Export Buyer's Credit Program (EBCP)
    Comment 2: Whether the Income Tax Reductions for High and New 
Technology Enterprises (HTNE) and Income Tax Deductions for Research 
and Development Expenses Under the Enterprise Income Tax (EIT) Law 
Are Specific
    Comment 3: Whether To Apply AFA to Find that the Provision of 
Kraft Paper for Less Than Adequate Remuneration (LTAR) is Specific 
and Provides a Financial Contribution From the GOC
    Comment 4: Whether Commerce Should Apply AFA to Fujian Nanwang's 
Kraft Paper Purchases
    Comment 5: Whether Commerce Should Use Fujian Nanwang's Total 
Sales as the Denominator for the Provision of Kraft Paper for LTAR
    Comment 6: Whether Commerce Should Reverse Its Preliminary 
Affirmative Critical Circumstances Finding
    Comment 7: Whether To Use Fujian Nanwang's Corrected Sales and 
Electricity Usage Data
    Comment 8: The Countervailability of the Provision of 
Electricity for LTAR
    Comment 9: Whether Policy Loans to the Paper Bags Industry 
Constitute a Financial Contribution and Are Specific
    Comment 10: Whether To Apply AFA to the Provision of Land-Use 
Rights for LTAR in the Huidong Industrial Zone
    Comment 11: Whether the Provision of Land-Use Rights Should Be 
Treated as a Financial Contribution in the Form of Revenue Forgone
X. Recommendation
Appendix I: Other Subsidies Determined To Be Countervailable
Appendix II: Identification of Export-Specific Subsidies
Appendix III: AFA Rate Calculation

[FR Doc. 2024-11478 Filed 5-23-24; 8:45 am]
BILLING CODE 3510-DS-P