[Federal Register Volume 89, Number 134 (Friday, July 12, 2024)]
[Proposed Rules]
[Pages 57286-57334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-15086]



[[Page 57285]]

Vol. 89

Friday,

No. 134

July 12, 2024

Part IV





Department of Commerce





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 International Trade Administration





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19 CFR Part 351





Regulations Enhancing the Administration of the Antidumping and 
Countervailing Duty Trade Remedy Laws; Proposed Rule

  Federal Register / Vol. 89, No. 134 / Friday, July 12, 2024 / 
Proposed Rules  

[[Page 57286]]


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DEPARTMENT OF COMMERCE

International Trade Administration

19 CFR Part 351

[Docket No. 240703-0184]
RIN 0625-AB25


Regulations Enhancing the Administration of the Antidumping and 
Countervailing Duty Trade Remedy Laws

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

ACTION: Proposed rule; request for comments.

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SUMMARY: Pursuant to Title VII of the Tariff Act of 1930, as amended 
(the Act), the U.S. Department of Commerce (Commerce) proposes to 
update its trade remedy regulations to enhance the administration of 
the antidumping duty (AD) and countervailing duty (CVD) laws. 
Specifically, Commerce proposes to codify existing procedures and 
methodologies and create or revise regulatory provisions relating to 
several matters including the collection of cash deposits, application 
of antidumping rates in nonmarket economy proceedings, calculation of 
an all-others' rate, selection of examined respondents, and attribution 
of subsidies received by cross-owned input producers and utility 
providers to producers of subject merchandise.

DATES: To be assured of consideration, written comments must be 
received no later than September 10, 2024.

ADDRESSES:  Submit electronic comments only through the Federal 
eRulemaking Portal at https://www.Regulations.gov, Docket No. ITA-2023-
0003. Comments may also be submitted by mail or hand delivery/courier, 
addressed to Ryan Majerus, Deputy Assistant Secretary for Policy & 
Negotiations, Performing the Non-Exclusive Functions and Duties of the 
Assistant Secretary for Enforcement and Compliance, Room 18022, U.S. 
Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 
20230. An appointment must be made in advance with the Administrative 
Protective Order (APO)/Dockets Unit at (202) 482-4920 to submit 
comments in person by hand delivery or courier. All comments submitted 
during the comment period permitted by this document will be a matter 
of public record and will be available on the Federal eRulemaking 
Portal at https://www.Regulations.gov. Commerce will not accept 
comments accompanied by a request that part or all the material be 
treated as confidential because of its business proprietary nature or 
for any other reason. Therefore, do not submit confidential business 
information or otherwise sensitive or protected information.
    Any questions concerning the process for submitting comments should 
be submitted to Enforcement & Compliance (E&C) Communications office at 
[email protected] or to John Van Dyke, Import Policy Analyst, 
at [email protected]. Inquiries may also be made of the E&C 
Communications office during business hours at (202) 482-0063.

FOR FURTHER INFORMATION CONTACT:  Scott D. McBride, Associate Deputy 
Chief Counsel for Trade Enforcement and Compliance, at (202) 482-6292, 
or Jesus Saenz, Attorney, at (202) 482-1823.

SUPPLEMENTARY INFORMATION: 

General Background

    Title VII of the Act vests Commerce with authority to administer 
the AD/CVD trade remedy laws. Section 731 of the Act directs Commerce 
to impose an AD order on merchandise entering the United States when it 
determines that a producer or exporter is selling a class or kind of 
foreign merchandise into the United States at less than fair value 
(i.e., dumping), and material injury or threat of material injury to 
that industry in the United States is found by the U.S. International 
Trade Commission (ITC).
    In addition, section 701 of the Act directs Commerce to impose a 
CVD order when it determines that a government of a country or any 
public entity within the territory of a country is providing, directly 
or indirectly, a countervailable subsidy with respect to the 
manufacture, production, or export of a class or kind of merchandise 
that is imported into the United States, and material injury or threat 
of material injury to that industry in the United States is found by 
the ITC.
    Section 771(5)(B) of the Act defines a countervailable subsidy as 
existing when ``a government or any public entity within the territory 
of a country provides a financial contribution; provides any form of 
income or price support; or makes a payment to a funding mechanism to 
provide a financial contribution, or entrusts or directs a private 
entity to make a financial contribution, if providing the contribution 
would normally be vested in the government and the practice does not 
differ in substance from practices normally followed by governments; 
and a benefit is thereby conferred.'' To be countervailable, a subsidy 
must be ``specific'' within the meaning of section 771(5A) of the Act.
    The Act provides numerous disciplines which Commerce must follow in 
conducting AD and CVD proceedings. For example, sections 703(d)(1)(B), 
705(d), 733(d)(1)(B), 735(c), and 751 of the Act direct Commerce to 
order U.S. Customs and Border Protection (CBP) to collect cash deposits 
as security pursuant to multiple determinations in its proceedings, 
until Commerce orders the assessment of AD or CVD duties. Likewise, 
sections 705(c)(1)(B), 705(c)(5), 735(c)(1)(B)(i), and 735(c)(5) of the 
Act set forth the means by which Commerce determines the AD margin or 
countervailable subsidy rate to be applied to imported subject 
merchandise exported or produced by entities not selected in an 
investigation for individual examination. In addition, sections 
777A(c)(2) and 777A(e)(2)(A) of the Act allow Commerce to limit the 
number of exporters or producers to be individually examined, while 
section 782(a) allows Commerce to select voluntary respondents.
    In accordance with these and other statutory provisions, this 
proposed rule codifies and enhances the procedures and practices 
applied by Commerce in administering and enforcing the AD and CVD laws.

Explanation of the Proposed Rule

    Commerce proposes several updates to the AD and CVD regulations 
found at part 351.\1\ The proposed changes are summarized here and 
discussed in greater detail below. Commerce invites comments on all 
proposed regulatory changes and clarifications, including suggestions 
to improve them.
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    \1\ Commerce's proposed rule seeks to codify several distinct 
procedures and practices under various sections of the Act. As such, 
Commerce generally intends the rule's provisions to be severable and 
to operate independently from each other. Commerce's intent that the 
rule's provisions be severable is demonstrated by the number of 
distinct regulatory provisions addressed in this rulemaking and the 
structure of the preamble in addressing them independently and 
supporting each, respectively, with Commerce's statutory 
interpretation, agency practice, and court precedent. Accordingly, 
Commerce intends each portion of this rule to be severable from each 
other but has included all of the proposed provisions in one 
rulemaking for purposes of enhancing Commerce's trade remedy 
regulations.
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     Revise the Subpart A heading of part 351 to reflect the 
provisions to which it applies.
     Revise Sec.  351.104(a)(7) to reflect that preliminary and 
final issues and decision memoranda issued in investigations and 
administrative

[[Page 57287]]

reviews before the implementation of Commerce's filing system, 
Antidumping Duty and Countervailing Duty Centralized Electronic Service 
System (ACCESS), may be cited in full in submissions before Commerce 
without placing the memoranda on the record.
     Revise Sec.  351.107 to accurately and more holistically 
describe Commerce's establishment and application of cash deposit 
rates, including explaining that some cash deposit rates are calculated 
on an ad valorem basis at importation, while others are calculated on a 
per-unit basis. The proposed regulation would also describe situations 
in which Commerce applies cash deposit rates in a producer/exporter 
combination and the process by which a producer/exporter combination 
may be excluded from provisional measures and an AD or CVD order as a 
result of a calculated de minimis cash deposit rate following an 
investigation. Furthermore, the regulation would set forth an AD cash 
deposit hierarchy for imports from market economies, an AD cash deposit 
hierarchy for imports from nonmarket economies, and a CVD cash deposit 
hierarchy. Finally, revised Sec.  351.107 would describe the effective 
date for cash deposit rates following the correction of ministerial 
errors in investigations and administrative reviews.
     Codify and update Commerce's methodology for determining 
if an entity exporting merchandise from a nonmarket economy should 
receive an antidumping duty rate separate from that of the nonmarket 
economy entity. New Sec.  351.108 would provide that in a nonmarket 
economy, one dumping margin may apply to all exporting entities from 
that economy. It would explain that if an entity located in a nonmarket 
economy is majority-owned by the government, the government can control 
its production, management, sales and export activities and it will not 
receive a separate rate. It would also describe additional scenarios in 
which an entity in the nonmarket economy will not receive a separate 
rate if the government owns 50 percent or less of the entity's shares 
and (1) the government has a disproportionately larger degree of 
influence or control over the entity's production and commercial 
decisions than the ownership share would normally entail and the 
Secretary determines that the degree of influence or control is 
significant; (2) the government has the authority to veto or control 
the entity's production and commercial decisions; (3) government 
officials, employees or representatives have been appointed as officers 
and have the ability to make or influence production or commercial 
decisions; or (4) the entity is required by law to maintain or in fact 
maintains one or more government officials, employees, or 
representatives in positions of authority who have the ability to make 
or influence production or commercial decisions. Further, it would also 
codify Commerce's analysis for determining if an entity is de jure and 
de facto separate from the government for purposes of export 
determinations, including an additional consideration of whether the 
entity, regardless of government ownership, must maintain government 
officials, employees or representatives in positions of authority who 
have the ability to make or influence decisions on export activities. 
In addition, the proposed rule would allow for consideration of any 
other information on the record suggesting that the government has 
direct or indirect influence over the exporter's export activities. 
Finally, proposed Sec.  351.108 would clarify the requirements for a 
separate rate application or certification and would suggest a revision 
to deadlines for separate rate applications of fourteen days following 
publication of the notice of initiation in the Federal Register.
     Add Sec.  351.109 to address Commerce's methodologies for 
selecting respondents in investigations and administrative reviews, 
including the steps Commerce would take to determine the number of 
exporters or producers that is practicable to investigate or review for 
calculating the all-others rate in investigations and for calculating a 
rate for unexamined exporters and producers. This provision would allow 
for a single country-wide subsidy rate, provide a waiver from 
examination if both petitioners and the potential respondent agree to 
non-selection of that potential respondent, and clarify that a 
nonmarket economy entity rate is not the same thing as an all-others 
rate. In addition, Sec.  351.109 would move the existing voluntary 
respondent provisions from Sec.  351.204 to Sec.  351.109 and update 
and revise the regulatory provisions applicable to the selection of 
voluntary respondents and deadlines for voluntary respondent 
submissions.
     Modify Sec.  351.204 to move Sec.  204(d)(1)-(3) to 
section 109 and move Sec.  204(e)(1)-(3) to section 107. Further, 
update and simplify Sec.  204(a) and (c), and move Sec.  204(e)(4) to 
Sec.  204(d), along with a new subheading for that paragraph and a new 
heading for section 204 itself.
     Modify Sec.  351.212(b) to clarify that entries may be 
assessed either on an ad valorem value or per-unit basis.
     Modify Sec.  351.213(f) to indicate that Commerce may 
select respondents, including voluntary respondents, in the context of 
an administrative review.
     Modify the header of Sec.  351.214 to emphasize that the 
regulations cover both new shipper reviews and CVD expedited reviews, 
each derived from different statutory authorities.
     Modify Sec.  351.301(b)(2) to require that interested 
parties submitting new information to rebut, clarify or correct factual 
information on the record must identify in writing the specific 
information being rebutted, clarified, or corrected and explain how the 
new factual information rebuts, clarifies or corrects that existing 
factual information.
     Modify Sec.  351.301(c)(3) to revise the time in which 
surrogate value submissions in nonmarket economy country antidumping 
proceedings and benchmark information in countervailing duty 
proceedings may be submitted in investigations and administrative, new 
shipper, and changed circumstances reviews.
     Modify Sec.  351.306(a)(3) to clarify that Commerce may 
share business proprietary information with CBP officials involved in 
negligence, gross negligence, or fraud investigations.
     Add paragraphs (g), (h), and (i) to Sec.  351.308 to 
reflect that pursuant to section 776 of the Act, Commerce may apply 
partial or total facts available, may use previously calculated dumping 
margins and countervailable subsidy rates in separate segments of the 
same proceeding without the need to corroborate those margins or rates, 
may use the highest dumping margin available as adverse facts 
available, need not estimate what an antidumping or countervailing duty 
rate would have been if an entity had acted to the best of its ability, 
and need not consider the ``commercial reality'' of an interested party 
in applying adverse facts available.
     Revise Sec.  351.309(c) and (d) to request that parties 
include a table of contents, sources such as tribunal decisions and 
administrative case determinations in the table of authorities, and a 
public executive summary of no more than 450 words for each discrete 
issue raised in case briefs and rebuttal briefs. This change would 
remove the encouraged inclusion of a five-page summary.
     Modify Sec.  351.401(f) to reflect that Commerce may treat 
both producing and non-producing affiliated parties as a single 
collapsed entity.

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     Add Sec.  351.404(g) to address the filing requirements 
for those alleging the existence of a multinational corporation and to 
clarify that the multinational corporation provision will not be 
applied when the non-exporting country is located in a nonmarket 
economy.
     Add Sec.  351.405(b)(3) to set forth the criteria Commerce 
would normally consider in selecting an amount of profit normally 
realized by exporters or producers in connection with the sale of same 
or similar merchandise in determining constructed value under the 
constructed value profit cap.
     Modify Sec.  351.408(b) to update and enhance Commerce's 
selection of economically comparable countries as part of its nonmarket 
economy methodology in accordance with sections 773(c)(2)(B) and 
773(c)(4)(A) of the Act. In addition to selecting a comparable economy 
based on per capita gross domestic product (GDP) or gross national 
income (GNI), Commerce could also consider factors including the size 
and composition of export activity in certain countries and the 
availability, accessibility, and quality of data from those countries 
as part of its analysis.
     Remove current Sec.  351.502(d), (e), and (f) which state 
that integrally linked subsidies, agricultural subsidies and subsidies 
to small- and medium-sized businesses are not ``specific'' for purposes 
of determining the countervailability of a subsidy under the CVD law.
     Move Sec.  351.502(g) covering disaster relief to Sec.  
351.502(d) and add that such relief includes pandemic relief.
     Amend Sec.  351.502(e) to explain that subsidies that 
provide employment assistance to workers grouped in general categories 
(such as age, gender, and/or the existence of a disability, veterans, 
or unemployment status) will not be considered specific if those 
assistance programs are generally available to everyone hired within 
those categories without restrictions specific to individual 
industries.
     Remove Sec.  351.502(f) and (g) entirely, as those 
provisions are no longer required with the other above-listed edits 
incorporated.
     Add Sec.  351.503(b)(3) to address the general treatment 
of the balance or value of contingent liabilities/assets not otherwise 
covered in paragraph 503(a) as an interest-free provision of funds and 
calculate the benefit using a short-term commercial interest rate.
     Add Sec.  351.505(a)(6)(iii) to provide an initiation 
standard for government-owned policy banks that would find the 
threshold for specificity met if a party can sufficiently allege that a 
policy bank provides loans pursuant to government policies or 
directives.
     ModifySec.  351.505(b) to remove the term ``otherwise'' 
from the regulation to bring the language into conformity with other 
regulations addressing the treatment of long-term loans.
     Modify Sec.  351.505(c) to remove paragraphs (c)(3) and 
(c)(4) and update paragraph (c)(2) to be the only provision addressing 
long-term loans. The benefit for long-term loans would be calculated by 
determining the difference between what a party would have paid on a 
comparable commercial loan and the actual amount the party paid on a 
government loan during a period of investigation (POI) or review (POR), 
and then allocating the benefit amount to the relevant sales during the 
POI or POR. Consistent with the language of section 771(5)(E) of the 
Act, remove sentences in current Sec.  351.505(c)(1) and (c)(2) that 
state that the present value in the year of receipt of the loan should 
never be permitted to exceed the principal of the loan in our 
calculations.
     Consistent with section 771(5)(E) of the Act, modify Sec.  
351.505(e) to remove the sentence ``[i]n no event may the present value 
(in the year of receipt of the contingent liability loan) of the 
amounts calculated under this paragraph exceed the principal of the 
loan.''
     Modify Sec.  351.509, the regulation addressing direct 
taxes, to add a clause stating that the calculation of a benefit under 
Sec.  351.509(a)(1) applies to firms located in an area designated by 
the government as being outside the customs territory of the 
government.
     Modify Sec.  351.511(a)(2)(i) to provide for the 
comparison of a government price to either an actual transaction in the 
country in question or to ``actual sales from competitively run 
government auctions'' in determining a benchmark price under the 
definition of ``adequate remuneration.'' In addition to defining actual 
transaction prices, modified Sec.  351.511(a)(2)(i) would also define 
``competitively run government auctions.''
     Complete Sec.  351.512, applicable to the purchase of 
goods, which is currently reserved. New Sec.  351.512(a)(1) would 
provide that in general, where goods are purchased by the government 
from a firm, a benefit will exist if the goods are purchased for more 
than adequate remuneration. Proposed Sec.  512(a)(2) would define 
adequate remuneration for this provision, including an explanation that 
Commerce will use ex-factory or ex-works comparison prices and the 
price paid to the firm for the good by the government in order to 
measure the benefit conferred to the recipient. Proposed Sec.  
512(a)(3) would explain that when the government is both a provider and 
purchaser of a good, Commerce will normally measure the benefit by 
comparing the price the government sold the good to a firm with the 
price the government paid when purchasing the good from the same firm. 
Proposed Sec.  512(b) would state that date of receipt of the benefit 
will be at the time of receipt of payment for the purchased good, and 
Sec.  351.512(c) would address the time period in which Commerce would 
allocate the benefit for the purchase of a good.
     Remove reserved Sec.  351.521 titled ``Import substitution 
subsidy,'' because no such regulation is necessary in light of the 
definition of an import substitution subsidy found in section 
771(5A)(C) of the Act.
     Replace Sec.  351.521 with a new regulation addressing 
export subsidies which exempt, remit, or defer indirect taxes and 
import charges on capital goods and equipment. Proposed Sec.  521(a)(1) 
would address the benefits received through an export subsidy that 
provides for the full or partial exemption or remission of an indirect 
tax or an import charge on the purchase or import of capital goods and 
equipment. Proposed Sec.  521(a)(2) would address the benefits received 
through a deferral of indirect taxes or import charges. Proposed Sec.  
521(b) would explain the time of receipt of the benefit in the case of 
full or partial exemptions or remissions of indirect taxes or import 
charges, as well as the time of receipt of deferral of indirect taxes 
or import charges. Finally, proposed Sec.  351.521(c) would explain 
that Commerce will allocate the benefit of a full or partial exemption, 
remission, or deferral to the year in which the benefit is considered 
to have been received.
     Delete and reserve Sec.  351.522, as it addresses green 
light and green box subsidies that lapsed pursuant to section 
771(5B)(G) of the Act.
     Revise Sec.  351.525(b)(6)(iii), which addresses the 
attribution of subsidies to holding companies and their subsidiaries. 
Specifically, this proposed rule would remove the second sentence of 
the provision in Sec.  351.525(b)(6)(iii), which states that if a 
holding company merely served as a conduit for the transfer of the 
subsidy from the government to a subsidiary of the holding company, 
Commerce will attribute the subsidy to products sold by the subsidiary. 
The agency would remove this language because it is proposing to modify 
the language in the regulation addressing the transfer of subsidies 
from cross-owned companies

[[Page 57289]]

in new proposed Sec.  351.525(b)(6)(vi) to state that a transferred 
subsidy will be solely attributed to the products produced by the 
recipient of the transferred subsidy. This modification would apply to 
all cross-owned companies, including holding or parent companies.
     Revise Sec.  351.525(b)(6)(iv), which currently addresses 
the attribution of subsidies to input suppliers. The proposed rule 
would revise the subheading to apply to input producers and divide the 
paragraph into Sec.  351.525(b)(6)(iv)(A) and Sec.  
351.525(b)(6)(iv)(B). Proposed Sec.  525(b)(6)(iv)(A) would use 
language similar to the current provision, addressing input producers 
that supply a downstream producer. Proposed Sec.  525(b)(6)(iv)(B) 
would list several factors that Commerce may consider in determining if 
an input product is primarily dedicated to the production of the 
downstream product.
     Move current Sec.  351.525(b)(6)(vi), the definition of 
cross-ownership, to a new Sec.  351.525(b)(6)(vii).
     Move current Sec.  351.525(b)(6)(v), covering the transfer 
of subsidies between corporations with cross-ownership producing 
different products, to Sec.  351.525(b)(6)(vi) and modify it to address 
the transfer of subsidies from any cross-owned corporation. Under this 
modification, a transferred subsidy from a cross-owned corporation 
would be attributed solely to products produced by the recipient of the 
transferred subsidy.
     Modify Sec.  351.525(b)(6)(v) to cover the attribution of 
subsidies to cross-owned corporations providing electricity, natural 
gas or other similar utility products. The regulation would provide 
that Commerce will attribute subsidies received by a provider of 
utility products to the combined sales of the cross-owned producer and 
the sales of products sold by the producer of subject merchandise if at 
least one of two identified conditions are met.
     Add a new Sec.  351.525(b)(8) to propose that Commerce 
would not tie or attribute subsidies on a plant- or factory-specific 
basis.
     Add a new Sec.  351.525(b)(9) to propose that a subsidy 
normally would be determined to be ``tied'' to a product or market when 
the authority providing the subsidy was made aware of, or had knowledge 
of, the intended use of the subsidy and so acknowledged the intended 
use of the subsidy prior to, or concurrent with, the approval or 
bestowal of the subsidy.
     Revise language in Sec.  351.525(b)(1) to reflect that the 
attribution regulations now extend to Sec.  351.525(b)(9) and add a 
sentence that states that Commerce may limit the number of cross-owned 
companies examined under this provision if the facts on the record and 
available resources warrant such a limitation.
     Revise Sec.  351.525(c), which addresses the attribution 
of subsidies to trading companies, to address the formula for 
cumulating subsidies, both when the trading company exports the 
individually examined respondent's merchandise and when the trading 
company is the individually examined respondent itself.
     Add Sec.  351.525(d) to explain Commerce's adjustment of 
the ad valorem subsidy rate when a country is experiencing high 
inflation, which is defined for this provision as an inflation rate 
greater than 25 percent per annum during the relevant period.
     Replace current Sec.  351.526, which is no longer 
relevant, with language codifying Commerce's practice with respect to 
subsidy extinguishment from changes in ownership. Proposed Sec.  526(a) 
would explain that, in general, Commerce will presume that non-
recurring subsidies continue to benefit a recipient in full over a 
particular allocation period notwithstanding an intervening change in 
ownership. Proposed Sec.  526(b) would set forth the criteria by which 
an interested party may rebut the presumption of the continuation of a 
benefit in full over the relevant allocation period. Furthermore, 
proposed Sec.  526(c) would explain that if the presumption is 
rebutted, the full amount of the benefits from subsidies preceding the 
change in ownership would be found to be extinguished, including the 
benefits of concurrent subsidies meeting the criteria set forth in 
Sec.  351.526(c)(2).
     Update Sec.  351.104(a)(2)(iii), Sec.  351.214(1)(1), 
Sec.  351.214(l)(3)(iii), Sec.  351.301(c)(1), and Sec.  
351.302(d)(1)(ii) to correct for cross-citations modified as a result 
of this Proposed Rule.

1. Revising Subpart A Heading to Part 351 To Include the Record of 
Proceedings, Cash Deposits, Nonmarket Economy Antidumping Rates, All-
Others Rate, and Respondent Selection

    Currently, Subpart A to part 351, which covers Sec. Sec.  101-107, 
is titled ``Scope and Definitions,'' although it also covers 
administrative record requirements and proceedings, as well as cash 
deposits. In this Proposed Rule, Commerce proposes the revision of the 
cash deposit regulation, as well as the creation of two new regulations 
which codify the agency's separate rates and respondent selection 
practice and procedures. Accordingly, Commerce proposes changing the 
name of Subheading A to ``Scope, Definitions, the Record of 
Proceedings, Cash Deposits, Nonmarket Economy Antidumping Rates, All-
Others Rate, and Respondent Selection.''

2. Revising Commerce's Filing Requirements To Allow Citation of 
Preliminary and Final Issues and Decision Memoranda Issued Before the 
Implementation of Commerce's ACCESS Filing System Without Placing Them 
on the Record--Sec.  351.104(a)(7)

    On March 25, 2024, Commerce issued a final rule which provided 
clarity and procedures for interested parties submitting documentation 
to the agency, explaining which documents may be cited without placing 
documents from other segments and proceedings on the record and which 
documents must be placed on the record to be considered by Commerce in 
its analysis and determinations.\2\ Those modifications added Sec.  
351.104(a)(7), which currently states that interested parties citing to 
public versions of documents which were issued by Commerce in other 
segments or proceedings before the implementation of ACCESS must place 
copies of those documents on the record because such documents have no 
assigned ACCESS barcode number.
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    \2\ See Regulations Improving and Strengthening the Enforcement 
of Trade Remedies Through the Administration of the Antidumping and 
Countervailing Duty Laws, Final Rule, 89 FR 20766, 20768-20773 
(March 25, 2024).
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    Commerce has reconsidered the scope of public documents to which 
Sec.  351.104(a)(7) applies and has determined that public preliminary 
and final issues and decision memoranda issued in investigations and 
administrative reviews pursuant to Sec. Sec.  351.205, 210 and 213 
before ACCESS was implemented need not be subject the requirements of 
that provision. Accordingly, this proposed rule would remove the 
requirement that such memoranda be placed on the record to be 
considered. Citations to these memoranda, like all such citations 
relied upon by interested parties in submissions to Commerce, must be 
cited in full (albeit without an ACCESS barcode number) and, as set 
forth in Sec.  351.104(a)(6), if Commerce determines that a citation is 
not cited in full, it may decline to consider and analyze the cited 
preliminary or final issues and decision memoranda in its preliminary 
and final determinations.

[[Page 57290]]

3. Explaining Commerce's Cash Deposit Procedures and Calculations 
Including Producer/Exporter Combination Rates, AD/CVD Hierarchies, and 
Effective Dates for Ministerial Errors--Sec.  351.107

    Sections 703(d)(1)(B), 705(d), 733(d)(1)(B), 735(c), and 751 of the 
Act provide Commerce with the statutory authority to determine cash 
deposit rates and order the suspension of liquidation and collection of 
cash deposits in antidumping and countervailing duty investigations and 
reviews. Specifically, sections 703(d)(1)(B) and 705(d) of the Act 
direct Commerce to determine cash deposit rates and issue instructions 
to CBP pursuant to preliminary and final determinations in CVD 
investigations, and sections 733(d)(1)(B) and 735(c) of the Act direct 
Commerce to determine cash deposit rates and issue instructions to CBP 
pursuant to preliminary and final determinations in AD investigations. 
With respect to section 751 of the Act, various provisions, such as 
sections 751(a)(1), 751(a)(2)(C), and 751(d), describe procedures by 
which Commerce instructs CBP to suspend liquidation of entries of 
merchandise, collect cash deposits, and revoke or terminate the 
collection of cash deposits pursuant to the results of different types 
of reviews. Commerce proposes a revision to Sec.  351.107(a) that 
addresses Commerce's authority to take such actions under the Act.
    Proposed Sec.  351.107(b) would establish the general rule that 
Commerce will instruct CBP to suspend liquidation of merchandise 
subject to an AD or CVD proceeding and apply cash deposit rates 
determined in that proceeding to all applicable imported merchandise. 
Proposed Sec.  351.107(b) would also establish that, in general, cash 
deposits should be calculated in proportion to the estimated value of 
the merchandise, as reported to CBP, on an ad valorem basis. This 
provision would be similar to the description of the final assessment 
of merchandise pursuant to AD and CVD proceedings on an ad valorem 
basis as already set forth in Sec.  351.212(b).
    In 1997, Commerce promulgated Sec.  351.107 to provide guidance on 
the rules for calculating the cash deposit rate.\3\ Since that 
rulemaking, Commerce has encountered several scenarios where the 
current Sec.  351.107 did not provide guidance in applying a cash 
deposit rate or rates. For example, although the 1997 regulations 
provide for the assessment of entries on an ad valorem basis, the cash 
deposit regulations do not address the similar calculation of cash 
deposits. Over the years, relying on statutory and court guidance, 
Commerce developed various practices that are reflected in the proposed 
Sec.  351.107 revision. Although Commerce normally instructs CBP to 
calculate cash deposits on an ad valorem basis, it has also at times 
instructed CBP to calculate cash deposit rates on a per-unit basis. 
Proposed Sec.  351.107(c)(1) describes the exception to Commerce's 
normal ad valorem practice, stating that the calculation of cash 
deposits on a per-unit basis might be appropriate if the information 
normally used to calculate an ad valorem cash deposit rate is not 
available or the use of an ad valorem cash deposit rate is otherwise 
not appropriate. For example, it is Commerce's practice to calculate 
cash deposits on a per-unit basis when an ad valorem basis will result 
in an under-collection of duties.\4\
---------------------------------------------------------------------------

    \3\ See Antidumping Duties; Countervailing Duties, Final Rule, 
62 FR 27296, 27318-19 (May 19, 1997) (1997 Final Rule) (discussing 
the finalized cash deposits regulation).
    \4\ See Certain Activated Carbon from the People's Republic of 
China Final Results of Antidumping Duty Administrative Review; 2010-
2011, 77 FR 67337, (November 9, 2012) and accompanying IDM (Certain 
Activated Carbon from the People's Republic of China IDM) at 34 
(stating ``the regulation, however, does not proscribe 
{Commerce{time}  from resorting to other methods of calculating and 
assigning assessment and cash deposit rates, and the agency does so 
in certain circumstances . . . {Commerce{time}  changed the cash 
deposit and assessment methodology from an ad valorem to a per-unit 
basis because the application of an ad valorem rate based on net 
U.S. price would yield an under-collection of duties due to Jacobi's 
undervaluing of its United States sales.'').
---------------------------------------------------------------------------

    Accordingly, to ensure the proper calculation of the cash deposit 
rate, Commerce is codifying its practice of relying on reported unit 
measurements when relying on reported sales values would result in an 
inaccurate cash deposit rate because entered sales values are unknown, 
undervalued, or systematically understated.\5\ The regulation explains 
that units to which a cash deposit rate may be applied include, but are 
not limited to, weight, length, volume, packaging (such as the type or 
size of packaging), and individual units of the product itself. 
Notably, the U.S. Court of International Trade (CIT) has affirmed 
Commerce's use of a per-unit methodology.\6\
---------------------------------------------------------------------------

    \5\ See id.; see also 1-Hydroxyethylidene-1, 1-Diphosphonic Acid 
from the People's Republic of China: Final Results of Antidumping 
Duty Administrative Review; 2016-2018, 84 FR 67925, (December 12, 
2019) and accompanying IDM (1-Hydroxyethylidene-1, 1-Diphosphonic 
Acid from the People's Republic of China IDM) at Comment 5; Wooden 
Bedroom Furniture from the People's Republic of China: Final Results 
and Final Rescission in Part, 75 FR 50992 (August 18, 2010), and 
accompanying IDM (Wooden Bedroom Furniture from the People's 
Republic of China IDM) at Comment 17; and Honey from the People's 
Republic of China: Final Results and Final Rescission, In Part, of 
Antidumping Duty Administrative Review, 70 FR 38872 (July 6, 2005) 
and accompanying IDM (Honey from the People's Republic of China IDM) 
at Comment 7.
    \6\ See Wuhan Bee Healthy Co. v. United States, Slip Op. 2008-61 
at 12 (CIT May 8, 2008) (Wuhan Bee).
---------------------------------------------------------------------------

    Commerce normally calculates a cash deposit rate applicable to all 
imported subject merchandise exported by an examined exporter or 
produced by an examined producer. Proposed Sec.  351.107(c)(2) would 
provide an exception whereby Commerce may apply a cash deposit rate 
determined in the current or a preceding examination only to imported 
merchandise both produced by an identified producer and exported by an 
identified exporter in a producer/exporter combination rather than all 
the subject merchandise exported by an examined exporter or produced by 
an examined producer. Commerce's regulations already provide for the 
application of cash deposit rates to certain producer/exporter 
combinations in current Sec.  351.107(b); however, unlike the newly 
proposed paragraph, the current regulation addresses only merchandise 
where the producer and exporter are not the same entity. The CIT has 
held that Commerce has ``broad discretion to determine when and how to 
administer combination rates'' in order to prevent the evasion of the 
calculated cash deposit rates.\7\ Accordingly, Commerce proposes to 
revise and clarify the producer/exporter combination provisions in the 
regulation, including the example set forth in proposed Sec.  
351.107(c)(2)(i).
---------------------------------------------------------------------------

    \7\ See Tianjin Magnesium Int'l Co. v. United States, 772 
F.Supp.2d 1322,1341 (CIT 2010) (stating, ``Commerce has broad 
discretion to determine when and how to administer combination 
rates.''); Lifestyle Enter., Inc. v. United States, 768 F. Supp.2d. 
1314 (CIT 2011) (stating ``Commerce has a duty to prevent 
circumvention of AD law and may do so by imposing combination 
rates.'').
---------------------------------------------------------------------------

    To provide even greater clarity on the application of producer/
exporter combinations, Sec.  351.107(c)(2)(ii)(A) through (D) sets 
forth four examples in which Commerce would instruct CBP to apply a 
determined cash deposit rate to a producer/exporter combination. 
Specifically, Commerce would instruct CBP to collect cash deposits for 
producer/exporter combinations in (1) new shipper reviews; \8\ (2) AD

[[Page 57291]]

investigations of exporters or producers from a nonmarket economy; \9\ 
(3) scope, circumvention, and covered merchandise inquiries when 
Commerce has made a determination on a producer/exporter combination 
basis; \10\ and (4) any additional segments Commerce deems appropriate 
based on the facts of the record.\11\
---------------------------------------------------------------------------

    \8\ See, e.g., Certain Cut-to-Length Carbon-Quality Steel Plate 
Products From the Republic of Korea: Final Results of Antidumping 
Duty Administrative Review and New Shipper Review; 2014-2015, 81 FR 
62712 (September 12, 2016), (``With respect to Hyundai Steel 
Company, the respondent in the new shipper review, the Department 
established a combination cash deposit rate for this company 
consistent with its practice, as follows . . .'').
    \9\ See, e.g., Carbon and Certain Alloy Steel Wire Rod From the 
People's Republic of China: Final Determination of Sales at Less 
Than Fair Value and Final Affirmative Determination of Critical 
Circumstances, in Part, 79 FR 68860, 68861 (November 19, 2014) 
(``{Commerce{time}  will instruct CBP to require a cash deposit 
equal to the weighted-average amount by which the normal value 
exceeds U.S. price, with the above-noted adjustments, as follows: 
(1) The rate for the exporter/producer combinations listed in the 
chart above will be the rate we have determined in this final 
determination.'').
    \10\ See, e.g., Glycine from the People's Republic of China: 
Preliminary Partial Affirmative Determination of Circumvention of 
the Antidumping Duty Order and Initiation of Scope Inquiry, 77 FR 
21532, 21535 (April 10, 2012).
    \11\ For an example of an additional appropriate usage of 
combination rates, in Tung Mung Development Co. v. United States, 
354 F. 3d 1371, 1380 (Fed. Cir. 2004), affirming Tung Mung 
Development Co. v. United States, 219 F. Supp. 2d 1333 (CIT 2002), 
the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) 
affirmed Commerce's use of a combination rate in addressing 
middleman dumping--a situation in which a foreign producer sold 
merchandise for less than normal value to a foreign exporter, and 
the foreign exporter subsequently sold the merchandise for even less 
than normal value to the United States.
---------------------------------------------------------------------------

    In addition, under another exception to Commerce's normal 
application of cash deposit rates to all imported subject merchandise 
exported by an examined exporter or produced by an examined producer, 
when Commerce determines in an AD or CVD investigation that a 
respondent should be excluded from an AD or CVD order, it is Commerce's 
long-standing practice to instruct CBP to apply that exclusion on a 
producer/exporter combination basis. Sections 703(b)(4)(A) and 
733(b)(3) of the Act provide that Commerce shall disregard any 
countervailable subsidy rate and any dumping margin, respectively, that 
is zero or de minimis in the preliminary determination. Moreover, 
sections 705(c)(2) and 735(c)(2) of the Act provide that Commerce shall 
``terminate'' the investigation, suspension of liquidation, and 
collection of cash deposits for the investigated exporter or producer 
when Commerce makes a negative determination based on a zero or de 
minimis countervailable subsidy rate or dumping margin for that 
exporter or producer. In other words, when a zero or de minimis 
countervailable subsidy rate or dumping margin is calculated for an 
exporter or producer based on particular investigated producer/exporter 
transactions, Commerce's long-standing enforcement of the Act has been 
to exclude future imports of merchandise from the disciplines of the AD 
or CVD order using those same investigated producer/exporter 
combinations. Proposed Sec.  351.107(c)(3) would codify Commerce's 
practice of excluding the producer/exporter combination or combinations 
examined in the investigation that satisfy those statutory requirements 
and identifying that combination or combinations publicly in the 
Federal Register.\12\
---------------------------------------------------------------------------

    \12\ See Common Alloy Aluminum Sheet from Italy: Final 
Affirmative Determination of Sales at Less Than Fair Value (LTFV), 
86 FR 13309 (March 8, 2021) (stating that ``because the estimated 
weighted-average dumping margin for Laminazione is zero, entries of 
shipments of subject merchandise produced and exported by this 
company will not be subject to suspension of liquidation or cash 
deposit requirements.''); see also Common Alloy Aluminum Sheet from 
Bahrain, Brazil, Croatia, Egypt, Germany, India, Indonesia, Italy, 
Oman, Romania, Serbia, Slovenia, South Africa, Spain, Taiwan and the 
Republic of Turkey: Antidumping Duty Orders, 86 FR 22139, 22141 
(April 27, 2021) (finding that ``because the estimated weighted 
average dumping margin is zero for subject merchandise produced and 
exported by Laminazione Sottile S.p.A., entries of shipments of 
subject merchandise from this producer/exporter combination are 
excluded from the antidumping duty order on subject merchandise from 
Italy.'').
---------------------------------------------------------------------------

    Commerce's current regulations address the exclusion of producers, 
exporters, and combinations of nonproducing exporters and producers in 
current Sec.  351.204(e)(1)-(3). For purposes of clarity, Commerce 
proposes to move the paragraphs found in current Sec.  351.204(e)(1) 
through (3) to proposed Sec.  351.107(c)(3)(i) through (iii) and update 
the language and examples to better reflect Commerce's practices and 
procedures in applying a producer/exporter combination in exclusions 
from AD and CVD investigations and orders. Commerce proposes 
recognizing that in a preliminary determination, with respect to 
entries of subject merchandise for which a producer/exporter 
combination has been preliminarily determined to have an individual 
weighted-average dumping margin or individual net countervailable 
subsidy rate of zero or de minimis, as long as that producer/exporter 
combination is identified in the Federal Register, Commerce would not 
instruct CBP to suspend liquidation of entries of subject merchandise 
or collect cash deposits. Similarly, with respect to final 
determinations, proposed Sec.  315.107(c)(3)(ii) states that (1) 
Commerce would instruct CBP to exclude a producer/exporter combination 
identified in the Federal Register from an AD or CVD order and (2) 
resellers of subject merchandise cannot benefit from an exclusion 
applicable to a producer/exporter combination determined in an 
investigation.
    Commerce is also proposing the addition of a fourth paragraph to 
Sec.  351.107(c) to address cash deposit instructions that require the 
use of a certification. Commerce added Sec.  351.228 to the regulations 
in 2021 to require certifications by importers and other interested 
parties regarding whether merchandise is subject to an AD or CVD 
order.\13\ In accordance with that provision, in certain instances 
certifications are required to accompany the payment of cash deposits. 
Proposed Sec.  351.107(c)(4) would add a paragraph that states that the 
agency may instruct CBP to apply a cash deposit requirement that 
reflects the record information and effectuates the administration and 
purpose of the certification.\14\
---------------------------------------------------------------------------

    \13\ See Regulations to Improve Administration and Enforcement 
of Antidumping and Countervailing Duty Laws, 86 FR 52300, 52383 
(Sept. 20, 2021).
    \14\ See, e.g., Certain Uncoated Paper From Brazil, the People's 
Republic of China, and Indonesia: Affirmative Final Determinations 
of Circumvention of the Antidumping Duty Orders and Countervailing 
Duty Orders for Certain Uncoated Paper Rolls, 86 FR 71025, 71027 
(December 14, 2021) (``Commerce is continuing to impose a 
certification requirement . . . , in order to not be subject to cash 
deposit requirements, the importer is required to meet the 
certification and documentation requirements described in Appendix 
IV for merchandise from Brazil, Appendix VI for merchandise from 
China, and VII for merchandise from Indonesia.'').
---------------------------------------------------------------------------

    Current Sec.  351.107(c)(1) provides guidance for applying cash 
deposit rates where entry documents do not identify the producer of 
subject merchandise. That paragraph is no longer necessary under this 
proposed rule because proposed Sec.  351.107(d) and (e) would set forth 
cash deposit hierarchies that provide more detailed guidance regarding 
the application of cash deposit rates. Specifically, the hierarchies 
set forth in proposed Sec.  351.107(d) and (e) would address the 
situation in which a producer and exporter each have different AD or 
CVD cash deposit rates and CBP must determine the rate to apply in 
collecting cash deposits regarding a given entry of subject 
merchandise. When the entry documents do not identify a specific party 
(i.e., a producer or exporter) in a step of the proposed cash deposit 
hierarchy, the subsequent step of the proposed cash deposit hierarchy 
would apply. When the entry documents do not identify any party for 
which the Secretary has established a current cash deposit rate, CBP 
would be instructed to apply the all-others rate or nonmarket economy 
entity rate to entries of the subject merchandise, pursuant to sections 
705(c)(5) and 735(c) of the Act

[[Page 57292]]

and proposed Sec.  351.108(b) and Sec.  351.109(f) of Commerce's 
regulations. These provisions apply only when Commerce has not 
previously established a combination cash deposit rate for the producer 
and exporter in question under Sec.  351.107(c)(2).
    Commerce routinely articulates a cash deposit hierarchy for market 
and nonmarket antidumping proceedings in its determinations based on 
the factors listed in proposed Sec.  351.107(d) \15\ and proposes to 
codify the antidumping market and nonmarket cash deposit hierarchies 
under paragraphs (d)(1)(i) and (ii), respectively.
---------------------------------------------------------------------------

    \15\ See, e.g., Methionine From Spain: Final Affirmative 
Determination of Sales at Less Than Fair Value and Final Affirmative 
Determination of Critical Circumstances, 86 FR 38985, 38986 (July 
23, 2021) (``we will instruct CBP to require a cash deposit equal to 
the estimated weighted-average dumping margin or the estimated all-
others rate, as follows: (1) The cash deposit rate for the 
respondent listed above will be equal to the company-specific 
estimated weighted-average dumping margin determined in this final 
determination; (2) if the exporter is not a respondent identified 
above, but the producer is, then the cash deposit rate will be equal 
to the company-specific estimated weighted-average dumping margin 
established for that producer of the subject merchandise; and (3) 
the cash deposit rate for all other producers and exporters will be 
equal to the all-others estimated weighted-average dumping 
margin.'') and Glass Containers From the People's Republic of China: 
Final Affirmative Determination of Sales at Less Than Fair Value, 85 
FR 58333, 58337 (September 18, 2020) (``Commerce will instruct CBP 
to require a cash deposit equal to the weighted-average amount by 
which the normal value exceeds U.S. price as follows: (1) The cash 
deposit rate for the exporter/producer combinations listed in the 
table above will be the rate identified in the table; (2) for all 
combinations of Chinese exporters/producers of subject merchandise 
that have not received their own separate rate, the cash deposit 
rate will be the cash deposit rate established for the China-wide 
entity; and (3) for all non-Chinese exporters of subject merchandise 
which have not received their own separate rate, the cash deposit 
rate will be the cash deposit rate applicable to the Chinese 
exporter/producer combination that supplied that non-Chinese 
exporter.'').
---------------------------------------------------------------------------

    The antidumping duty order cash deposit hierarchy for a market 
economy proceeding proposed in Sec.  351.107(d)(1)(i) includes three 
steps for determining the applicable cash deposit rate for a given 
entry of subject merchandise. Commerce would first determine if it has 
already determined a cash deposit rate for the exporter and, if so, 
instruct CBP to apply that cash deposit rate to the exporter's entries 
of subject merchandise. When such an exporter-specific cash deposit 
rate does not exist, proposed Sec.  351.107(d)(1)(i)(B) would provide 
that if a cash deposit rate exists for the producer in question, 
Commerce would instruct CBP to apply that rate to the entries of 
subject merchandise at issue. If the first and second steps do not 
yield a result (i.e., Commerce has not previously established a cash 
deposit rate for either the exporter or the producer of subject 
merchandise), under proposed Sec.  351.107(d)(1)(i)(C) Commerce would 
instruct CBP to apply the all-others rate determined in the 
investigation of the underlying proceeding, pursuant to section 735(c) 
of the Act and proposed Sec.  351.109(f), as the cash deposit rate for 
the entries of subject merchandise in question.
    For proceedings involving a nonmarket economy country, proposed 
Sec.  351.107(d)(1)(ii) would apply. First, under proposed Sec.  
351.107(d)(1)(ii)(A), if Commerce has already established a cash 
deposit rate for the exporter, such as in an investigation, the agency 
would instruct CBP to apply it to the entries of subject merchandise in 
question. If Commerce has not established a cash deposit rate for the 
exporter, pursuant to proposed Sec.  351.107(d)(1)(ii)(B) Commerce 
would instruct CBP to apply the cash deposit established for the 
nonmarket economy entity pursuant to proposed Sec.  351.108(a) to the 
entries at issue.
    Next, proposed Sec.  351.107(d)(1)(ii)(C) would addresses entries 
of subject merchandise resold in the United States through a third-
country reseller under proceedings involving a nonmarket economy 
country. In that situation, Commerce would normally instruct CBP to 
apply the cash deposit rate applicable to either the nonmarket economy 
country exporter that supplied the subject merchandise to the reseller 
or to an applicable producer/exporter combination, as warranted.
    Finally, proposed Sec.  351.107(d)(2) would provide an exception to 
the two AD cash deposit hierarchies pursuant to which based on unique 
facts in an underlying proceeding. Commerce might determine that an 
alternative cash deposit rate (i.e., a cash deposit rate not identified 
under proposed paragraph Sec.  351.107(d)(1)) is the most appropriate 
cash deposit rate to apply to the entries in question, and accordingly 
instruct CBP to apply that alternative cash deposit rate.
    In addition to the AD cash deposit hierarchies set forth in 
proposed Sec.  351.107(d), proposed Sec.  351.107(e) would establish a 
new CVD cash deposit hierarchy that applies when the producer and 
exporter in question have differing cash deposit rates. Under proposed 
Sec.  351.107(e)(1)(i), when a cash deposit rate is established for 
both the producer and exporter of subject merchandise, Commerce would 
instruct CBP to apply the higher of the two rates for the entry of 
subject merchandise in question. If that step does not apply and a cash 
deposit rate exists for the producer but not the exporter of subject 
merchandise, Commerce would instruct CBP to apply the producer's cash 
deposit rate to the entries in question under proposed Sec.  
351.107(e)(1)(ii). If that step does not apply and a cash deposit rate 
exists for the exporter but not the producer of subject merchandise, 
Commerce would instruct CBP to apply the exporter's cash deposit rate 
to the entries of subject merchandise at issue under proposed Sec.  
351.107(e)(1)(iii). Finally, if none of those rates exist, Commerce 
would instruct CBP to apply the all-others rate determined in the 
investigation to the entries of subject merchandise at issue under 
proposed Sec.  351.107(e)(1)(iv).
    Just as with the AD cash deposit hierarchies' exception found in 
proposed Sec.  351.107(d)(2), if Commerce determines that a cash 
deposit rate other than that resulting from the CVD cash deposit 
hierarchy should apply based on the unique facts in the underlying 
proceeding, then under proposed Sec.  351.107(e)(2) Commerce might 
instruct CBP to use an alternative methodology in applying cash deposit 
rates to entries of subject merchandise.
    Proposed Sec.  351.107(f) would address effective dates for amended 
preliminary and final determinations and results of review upon the 
correction of a ministerial error, in accordance with sections 703, 
705(e), 733, and 735(e) of the Act and Sec.  351.224(e) through (g) of 
Commerce's regulations. When Commerce amends a preliminary or final 
determination in an investigation and the amendment increases the 
dumping margin or the countervailable subsidy rate, proposed Sec.  
351.107(f)(1) would provide that the new cash deposit rate would be 
applied to entries made on or after publication of the amended 
determination.\16\
---------------------------------------------------------------------------

    \16\ See Urea Ammonium Nitrate Solutions from the Republic of 
Trinidad and Tobago: Amended Preliminary Determination of Sales at 
Less Than Fair Value, 87 FR 12935, 12936 (March 8, 2022) (``Because 
these amended rates result in increased cash deposit rates, they 
will be effective on the date of publication of this notice in the 
Federal Register.'').
---------------------------------------------------------------------------

    On the other hand, under proposed Sec.  351.107(f)(2), when 
Commerce's amends a preliminary or final determination in an 
investigation and that amendment results in a decrease of the dumping 
margin or the countervailable subsidy rate, then the new cash deposit 
rate would be retroactive to the date of publication of the original 
preliminary or final determination, respectively.\17\
---------------------------------------------------------------------------

    \17\ See Raw Honey from Brazil: Amended Preliminary 
Determination of Sales at Less Than Fair Value, 86 FR 71614, 71615 
(December 17, 2021) (``Because these amended rates result in reduced 
cash deposit rates, they will be effective retroactively to . . . 
the date of publication of the Preliminary Determination.'').

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[[Page 57293]]

    Furthermore, under proposed Sec.  351.107(f)(3), when Commerce 
amends the final results of an administrative review, the effective 
date of the amended cash deposit rate would be retroactive to entries 
following the date of publication of the original final results of 
review, regardless of whether the dumping margin or countervailable 
subsidy rate increases or decreases.\18\
---------------------------------------------------------------------------

    \18\ See Certain Carbon and Alloy Steel Cut-to Length Plate from 
Belgium; Amended Final Results of Antidumping Duty Administrative 
Review, 2018-2019, 86 FR 21274 (April 22, 2021) (``The following 
cash deposit requirements will be effective retroactively for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after March 24, 2021, the 
publication date of the Final Results of this administrative 
review.'').
---------------------------------------------------------------------------

    In addition to amended cash deposit rates made pursuant to 
ministerial error corrections under paragraphs Sec.  351.107(f)(1) 
through (3), Commerce may also make such amendments as a result of 
litigation when alleged or disputed ministerial errors are at issue. In 
those circumstances, as reflected in proposed Sec.  351.107(f)(4), the 
effective date of the amended cash deposit rates may differ from those 
resulting from the application of Sec.  351.107(f)(1) through (3). 
Furthermore, proposed Sec.  351.107(f)(4) explains that the applicable 
effective date following litigation will normally be identified in a 
Federal Register notice. In most cases, in accordance with the statute, 
such amendments pursuant to litigation will be prospective in 
application.

4. Describing and Modifying Commerce's Separate Rates Practice and 
Procedures for Nonmarket Economy Country Antidumping Proceedings--Sec.  
351.108

    Section 771(18)(A) of the Act defines a nonmarket economy country 
as any foreign country which Commerce determines ``does not operate on 
market principles of cost or pricing structures, so that sales of 
merchandise in such country do not reflect the fair value of the 
merchandise.'' Further, section 771(18)(C)(i) of the Act states that 
``{a{time} ny determination that a foreign country is a nonmarket 
economy country shall remain in effect until revoked'' by Commerce.
    For over three decades, in antidumping proceedings involving 
nonmarket economy countries, Commerce has repeatedly determined that 
legally distinct entities are in a sufficiently close relationship to 
the government to be considered part of a single entity (i.e., the 
government-controlled entity).\19\ Reflecting that dynamic, current 
Sec.  351.107(d) states that ``{i{time} n an antidumping proceeding 
involving imports from a nonmarket economy country, `rates' may consist 
of a single dumping margin applicable to all exporters and producers.''
---------------------------------------------------------------------------

    \19\ See Fine Denier Polyester Staple Fiber from the People's 
Republic of China: Preliminary Affirmative Determination of Sales at 
Less Than Fair Value, Postponement of Final Determination, and 
Extension of Provisional Measures, 83 FR 6335 (Jan 5, 2018), and 
accompanying Preliminary Decision Memorandum, dated December 18, 
2017, at ``Separate Rates'' (Polyester Staple Fiber from the PRC 
PDM). For an example of a Commerce determination finding a country 
is a non-market economy, see Antidumping Duty Investigation of 
Certain Aluminum Foil From the People's Republic of China: 
Affirmative Preliminary Determination of Sales at Less-Than-Fair 
Value and Postponement of Final Determination, 82 FR 50858, 50861 
(November 2, 2017).
---------------------------------------------------------------------------

    In the 1991 Sparklers from China investigation,\20\ Commerce 
established a separate rate test, which it further developed in a 
subsequent 1994 investigation on Silicon Carbide from China.\21\ Under 
the separate rate test, if an entity can demonstrate that the foreign 
government does not have either legal (de jure) control or control in 
fact (de facto) over the entity's export activities, it may receive a 
separate rate. Commerce's separate rate test has been affirmed as in 
accordance with law and otherwise acknowledged multiple times by the 
Federal Circuit.\22\
---------------------------------------------------------------------------

    \20\ See Final Determination of Sales at Less Than Fair Value: 
Sparklers from the People's Republic of China, 56 FR 20588, 20589 
(May 6, 1991) (Sparklers from China).
    \21\ See Notice of Final Determination of Sales at Less Than 
Fair Value: Silicon Carbide from the People's Republic of China, 59 
FR 22585, 22586-22587 (May 2, 1994) (Silicon Carbide from China).
    \22\ See Diamond Sawblades Mfrs. Coal. v. United States, 866 
F.3d 1304, 1310-11 (Fed. Cir. 2017); see also Changzhou Hawd 
Flooring Co. v. United States, 848 F.3d 1006, 1009 (Fed. Cir. 2017); 
Dongtai Peak Honey Indus. Co. v. United States, 777 F.3d 1343, 1349-
50 (Fed. Cir. 2015); and Canadian Solar Int'l LTD v. United States, 
68 F. 4th 1267, 1270 (Fed. Cir. 2023).
---------------------------------------------------------------------------

    Over the past decade, Commerce has modified its practice pursuant 
to a series of CIT decisions and remand redeterminations. For example, 
in Advanced Technology, the CIT held that Commerce's traditional 
separate rate practice was deficient because it failed to recognize the 
authority that a government may hold over an entity's commercial 
activities when it owns a significant portion of that entity.\23\ 
Accordingly, consistent with the Court's holdings on this issue, it is 
now Commerce's practice to conclude that when a government holds a 
majority ownership share, either directly or indirectly, in a 
respondent exporting entity, the majority holding in and of itself 
demonstrates that the government exercises, or has the potential to 
exercise, control over the entity's operations generally.\24\ This may 
include control over, for example, the selection of management, a key 
factor in determining whether an entity has sufficient independence in 
its export activities to merit a separate rate. Consistent with normal 
business practices, Commerce would expect any majority shareholder, 
including a government, to have the ability to control, and an interest 
in controlling, the operations of the entity, including the selection 
of management and the strategic and financial decisions of the entity. 
Thus, under Commerce's current separate rate practice, if a foreign 
government holds a majority ownership share of a respondent exporting 
entity, Commerce will not grant that entity a separate rate.
---------------------------------------------------------------------------

    \23\ See Advanced Technology & Materials Co., Ltd. v. United 
States, 885 F. Supp. 2d 1343, 1349-1357 (CIT 2012), affirmed in 
Advanced Technology & Materials Co., Ltd. v. United States, Case No. 
2014-1154 (Fed. Cir. 2014).
    \24\ See, e.g., Polyester Staple Fiber from the PRC PDM at 
``Separate Rates.''
---------------------------------------------------------------------------

    As described below, Commerce is now proposing to codify Commerce's 
separate rate practice in Sec.  351.108. Although a government in a 
nonmarket economy country may own or control entities located both 
within and outside of a nonmarket economy country, the proposed 
regulation addresses only the application of Commerce's separate rate 
practice to entities located within the nonmarket economy country. In 
addition, Commerce is also proposing to modify its separate rate 
practice in Sec.  351.108 to address additional real-world factors 
through which a foreign government can control or influence production 
decisions, pricing and sales decisions, and export behavior. Finally, 
Commerce is proposing the codification and modification of separate 
rate application and certification requirements.
    Proposed Sec.  351.108(a) would provide that if Commerce determines 
that entities located in a nonmarket economy country are subject to 
government control (i.e., in a sufficiently close relationship to be 
considered part of a single entity, the government-controlled entity), 
absent evidence on the record indicating otherwise, Commerce will 
assign such entities a single antidumping duty deposit rate. This 
paragraph replaces current Sec.  351.107(d) and clarifies that the 
single cash deposit or assessment rate is called ``the nonmarket 
economy entity rate.''
    Proposed Sec.  351.108(b) would provide that an entity may receive 
its own rate, separate from the nonmarket economy entity rate, if it 
demonstrates to

[[Page 57294]]

Commerce that it was sufficiently independent from the control of the 
nonmarket economy government with respect to its commercial and export 
activities during the relevant period of investigation or review to 
justify the application of a separate rate. The regulation would then 
set forth the circumstances and criteria which Commerce would consider 
in determining if the application of a separate rate is warranted based 
on record information.
    The first circumstance pertains to nonmarket economy government 
ownership and control. When a government, at any level, owns an entity, 
either directly or indirectly, the proposed regulation describes 
certain situations in which no separate rate will be permitted. The 
first ownership situation, set forth in Sec.  351.108(b)(1)(i), as 
described above and consistent with Commerce's current practice, is 
when the government has a majority share, described as ``over fifty 
percent ownership,'' of the entity. If the government owns more than 
fifty percent of an entity subject to an antidumping proceeding, 
Commerce will not determine that the entity is separate from government 
control and will not calculate a separate rate for that entity.
    In addition, proposed Sec.  351.108(b)(1)(ii) sets forth a 
modification to Commerce's practice in addressing four specific 
situations in which the government has an ownership interest which is 
fifty percent or less of an entity but still has the ability to control 
or influence the entity's production and commercial decisions. Under 
those specific situations, in accordance with this Proposed Rule, 
Commerce would not determine that the entity is separate from 
government control and thus would not calculate a separate rate for 
that entity.
    Under the first circumstance, set forth in proposed Sec.  
351.108(b)(1)(ii)(A), if the government's ownership share provides it 
with a greater degree of control or influence over the entity's 
production and commercial decisions than an ownership share of that 
amount would normally entail absent such special treatment, and 
Commerce concludes that the degree of control or influence of the 
entity is significant,\25\ the entity would not be eligible for a 
separate rate. Such special shares in a company are sometimes referred 
to as ``golden shares.'' \26\ When a government owns such special 
shares it may have the ability to exercise a disproportionate level of 
influence or control over an entity's decisions central to Commerce's 
calculations.
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    \25\ A determination that the degree of control or influence is 
``significant'' would be based on a case-by-case analysis and 
dependent on consideration of the government's, as well as other 
shareholder's, abilities to control or influence the entity's 
production and commercial decisions. For example, the government may 
own one percent of the shares of an entity and still make certain 
production or commercial decisions for the entity despite 
disagreement by the owners of the other ninety-nine percent of 
shares. The significance of the degree of control or influence by 
the government would be entirely dependent on the facts on the 
record before Commerce.
    \26\ Organization for Economic Co-operation and Development, 
OECD Guidelines on Corporate Governance on State-owned Enterprises, 
17-16 (2015) (``Some borderline cases need to be addressed on a 
case-by-case basis. For example, whether a ``golden share'' amounts 
to control depends on the extent of the powers it confers on the 
state.'') and (``{M{time} inority ownership by the state can be 
considered as covered by the Guidelines if corporate or shareholding 
structures confer effective controlling influence on the state 
(e.g., through shareholders' agreements.''). See also id. at 63 
(``Any special rights or agreements that diverge from generally 
applicable corporate governance rules, and that may distort the 
ownership or control structure of the SOE, such as golden shares and 
power of veto, should be disclosed.'').
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    Under the second circumstance, set forth in proposed Sec.  
351.108(b)(1)(ii)(B), if the government has the authority to veto or 
control an entity's production and commercial decisions, Commerce would 
find the entity at issue ineligible for a separate rate. Such authority 
can have an outsized effect on the production and commercial decisions 
made by an entity, so Commerce has concluded it would be inappropriate 
to find an entity eligible for a separate rate if the government holds 
veto power or control over these decisions.
    Under the third circumstance, as set forth in proposed Sec.  
351.108(b)(1)(ii)(C), if government officials, employees, or 
representatives hold positions of authority in the entity, including as 
members of the board of directors or other governing authorities in the 
entity, that have the ability to make or influence production and 
commercial decisions for the entity, then Commerce would find the 
entity at issue ineligible for a separate rate.
    Likewise, under the forth circumstance, set forth in proposed Sec.  
351.108(b)(1)(ii)(D), if the entity is obligated by law, its 
foundational documents (such as its articles of incorporation), or 
other de facto requirements to maintain one or more officials, 
employees, or representatives of the government in positions of power 
(including as members of the board of directors or other governing 
authorities in the entity, which have the ability to make or influence 
production and commercial decisions for the entity at issue), then 
Commerce would not calculate a separate rate for the entity in that 
situation. Unlike the scenario described in Sec.  351.108(b)(1)(ii)(C), 
there is no requirement in this paragraph that a government official, 
employee, or representative actually hold such an influential position 
in the entity, only that information on the record shows that the 
entity is required to have a government official, employee, or 
representative hold such a position. Whether there is the potential for 
a government official, employee or representative taking a position of 
power, or the government official, employee or representative actually 
holds such a position of power, both situations are means by which the 
government could exercise an outsized amount of influence or control 
over the entity.\27\ Boards of directors generally control many of an 
entity's production and commercial decisions, so if the entity is 
required to have a government representative on a board of directors, 
for example, then it is reasonable to conclude that the government 
representative on the board could also exercise control, or could have 
the potential to exercise control, over the entity's production and 
pricing decisions.
---------------------------------------------------------------------------

    \27\ Id. at 14 (``Examples of an equivalent degree of control'' 
to the state ``being the ultimate beneficiary owner of the majority 
of voting shares'' would include, ``for instance, cases where legal 
stipulations or corporate articles of association ensure continued 
state control over an enterprise or its board of directors in which 
it holds a minority stake.'').
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    It is Commerce's observation over many years of administering AD 
and CVD proceedings that government entities who own the same 
percentage of shares of a company as non-government entities do not 
always have the same influence over company decisions as the non-
government entities. In fact, Commerce has observed that governments 
that have ownership interest in companies and have officials, 
employees, or representatives in positions of power within those 
companies frequently hold greater influence over company decisions than 
those without the institutional, political and resource backing of the 
government.\28\ Furthermore, it is also Commerce's observation that 
government representatives often do not

[[Page 57295]]

have the entity's profits as their primary motivating factor, unlike 
most non-government share-holders.\29\
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    \28\ This observation is most notable in Commerce's CVD 
proceedings involving China. Commerce has observed that the Chinese 
government has certain ownership interests which allow it to 
influence certain companies and individuals. See, e.g., Commerce 
Memorandum, ``Countervailing Duty Administrative Review of Steel 
Racks from the People's Republic of China: Public Bodies Analysis 
Memo,'' dated August 2, 2022 (ACCESS Barcode 4270527-01--4270527-
10), at 16-20.
    \29\ Likewise, Commerce has also observed in China CVD 
proceedings that profit is frequently not the government 
representatives' primary motivating factor in making share-holder 
decisions. See, e.g., Commerce Memorandum, ``Countervailing Duty 
Administrative Review of Steel Racks from the People's Republic of 
China: Analysis of China's Financial System,'' dated August 3, 2022 
(ACCESS Barcode 4270869-01--4270869-13) at 3-7; 17-19.
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    To be clear, Commerce is not proposing that any of these factors, 
standing alone without some amount of government ownership, would 
result in a denial of a separate rate. However, if the government has a 
minority ownership in the entity and one of these four factors exists 
as well, then, as with majority ownership, there exists the ability or 
potential for the nonmarket economy government to exercise control over 
the entity's operations in general, thereby warranting a determination 
that no separate rate should be calculated for that entity.
    Under proposed Sec.  351.108(b)(2) and (3), if an entity 
demonstrates that there is no majority government ownership of the 
entity or there is fifty percent or less government ownership and the 
criteria listed in Sec.  351.108(b)(1)(ii) do not exist, Commerce would 
then apply its analysis to determine the existence or absence of de 
jure or de facto nonmarket economy government control. In addition to 
the three factors historically considered by Commerce in applying its 
de jure analysis (the absence of restrictive stipulations by the 
government associated with an individual entity's business and export 
licenses, legislative enactments decentralizing government control of 
companies, and other formal measures by the government decentralizing 
control of companies) and the four factors historically considered by 
Commerce in applying its de facto analysis (whether export prices are 
set by or are subject to the approval of a government agency, whether 
the entity has authority to negotiate and sign contracts and other 
agreements without government involvement, whether the entity has 
autonomy from the government in making decisions regarding the 
selection of its management, and whether the entity retains the 
proceeds of its export sales and makes independent decisions regarding 
disposition of profits or financing of losses), Commerce is also 
proposing the consideration of three additional relevant factors for 
purposes of applying a separate rate.
    First, under proposed Sec.  351.108(b)(2)(i), as part of the de 
jure analysis, an entity would be required to demonstrate that there is 
no legal requirement that one or more officials, employees, or 
representatives of the government serve as officers of the entity, 
members of the board of directors, or other governing authorities in 
the entity which make or influence export activity decisions.
    Similarly, under proposed Sec.  351.108(b)(3)(i), as part of the de 
facto analysis, if an entity has demonstrated that the factors listed 
in Sec.  351.108(b)(1)(i), (ii), and (2) do not apply to the entity, it 
would be required to demonstrate that there are no government 
officials, employees, or representatives actually serving in such 
leadership roles in the entity. Similar to the inclusion of government 
representatives in company positions that allow them to make or 
influence production or commercial decisions discussed above when there 
is partial government ownership, these factors are included in the de 
jure and de facto analyses to consider if government officials, 
employees, or representatives, regardless of government ownership of 
entity, may be in a position to control or influence an entity's export 
activities.
    Furthermore, Commerce proposes in Sec.  351.108(b)(3)(vi) that a 
sixth factor be included in its de facto analysis, allowing Commerce to 
consider ``any additional evidence on the record suggesting that the 
government has no direct or indirect influence over the entity's export 
activities.'' It is not Commerce's intention in this Proposed Rule to 
provide an exhaustive list of examples of additional evidence that 
might indicate de facto government influence over export activities, 
and such a determination would be left to Commerce to determine based 
on the information on the record on a case-by-case basis. However, one 
example of means by which a government could influence an entity's 
export activities that is not articulated in the regulation is through 
threats, coercion, or intimidation. If the administrative record showed 
that the government participated in or sanctioned threats, coercion, or 
intimidation of an entity, either directly or indirectly, and those 
actions impacted, or likely influenced, the entity to modify its export 
activities, Commerce would deny separate rate treatment to an entity 
under this provision. Governments can influence the export activities 
of companies through a variety of de facto means, such as through 
company decision-making when the government is an owner of shares in a 
company, when there are ``insiders'' within the company who directly 
work for the entity but take orders from the government, or when 
decision-making is made under duress associated with government-
directed threats, coercion, and intimidation.\30\ This provision is 
intended to make certain that all such relevant de facto scenarios are 
captured and considered in Commerce's separate rate de facto analysis.
---------------------------------------------------------------------------

    \30\ Commerce does not intend to provide an exhaustive list of 
types of threats, coercion or intimidation which governments may use 
on an entity or an entity's colleagues, associates, friends and 
family members to control or influence an entity's export behavior. 
Some obvious examples involve bodily harm (kidnapping, 
defenestration, muggings), harm to property (arson, vehicular 
damage, personal property damage), blackmail, threats to living 
welfare (such as threats to employment and access to housing, 
electricity, heating, internet and medical care), or cyber-attacks, 
but there are many additional examples which do not fall into these 
categories and would still be considered threats, coercion or 
intimidation which could control or influence an entity's export 
decisions under Commerce's de facto analysis.
---------------------------------------------------------------------------

    In addition, proposed Sec.  351.108(c) would explain that if a 
company is located in a nonmarket economy and is subject to a nonmarket 
economy country proceeding, but is wholly owned by a market economy 
foreign entity, then the application of the separate rate analysis 
codified in paragraph (b) would be unnecessary to determine whether it 
is independent of nonmarket economy government control.\31\ The 
paragraph would clarify that for an entity to be wholly owned by a 
market economy foreign entity, the foreign entity must be both 
incorporated and headquartered in a market economy country or 
countries. Thus, for purposes of this provision, if a foreign entity is 
incorporated in a market economy country but headquartered in a 
nonmarket economy country, Commerce would not consider the company 
located in the nonmarket economy to be wholly owned by a market economy 
foreign entity. Likewise, if the foreign entity is headquartered in a 
market economy but incorporated in a nonmarket economy country, 
Commerce would not consider the company located in the nonmarket 
economy to be wholly owned by a market economy foreign entity, for 
purposes of this provision. In either of those situations, Commerce 
would conduct its separate rate analysis of the company located in the 
nonmarket economy under the understanding that the company is from the 
nonmarket economy country. The reason for this requirement is simple: 
Commerce does not want companies to evade the application of its 
separate rates analysis when those companies are owned by entities 
either headquartered or

[[Page 57296]]

incorporated in a nonmarket economy country and may be controlled by 
the nonmarket economy government.
---------------------------------------------------------------------------

    \31\ See Polyester Staple Fiber from the PRC PDM at ``Separate 
Rates.''
---------------------------------------------------------------------------

    Proposed Sec.  351.108(d)(1) and (2) would codify the requirement 
that separate rate applications and certifications be submitted by each 
entity seeking a separate rate. In antidumping investigations, new 
shipper reviews, and administrative reviews in which an entity has not 
previously been assigned a separate rate, the entity must file a 
separate rate application, the form of which, pursuant to the proposed 
regulation, Commerce would make available to the public. In 
administrative reviews in which an entity already has been assigned a 
separate rate, under proposed Sec.  351.108(d)(3), the entity would 
instead file a certification attesting that it had entries for which 
liquidation was suspended during the period of review and that it 
otherwise continued to meet the criteria for obtaining a separate rate.
    Under these provisions, for new shipper reviews and administrative 
reviews, Commerce has included a proposed requirement that interested 
parties submitting an application must provide documentary evidence of 
an entry with the separate rate applications for which liquidation was 
suspended during the period of review in Sec.  351.108(d)(2). Commerce 
would not consider separate rate applications in new shipper reviews 
and administrative reviews if it is possible that no entry was 
suspended during the period of review for a particular entity, because 
without entries to which Commerce could assess duties there would be no 
purpose for a separate rate analysis. Furthermore, Sec.  351.108(d)(3) 
would explain that if the agency determined in a previous segment of 
the proceeding that certain exporters and producers should be treated 
as a single entity, then a separate rate certification in a subsequent 
administrative review must identify and certify the required 
information for all of the companies comprising that single entity.
    Commerce is also proposing in Sec.  351.108(d)(1), (2), and (3) 
that all separate rate applications and certifications \32\ be filed 
with Commerce no later than fourteen days following publication of the 
notice of initiation of an investigation or review in the Federal 
Register. This would be a change from the current thirty-day 
deadline.\33\ The current thirty-day deadline delays Commerce from 
selecting respondents in its nonmarket economy proceedings because 
Commerce cannot select respondents for individual examination until it 
first determines the pool of exporters who have satisfied the separate 
rate analysis. Likewise, until Commerce selects respondents, it cannot 
issue respondent questionnaires. Commerce has determined that by 
revising the deadline for submitting separate rate applications and 
certifications to Commerce to fourteen days, Commerce will be able to 
select respondents sooner in its investigations and reviews, and 
thereby provide more time for Commerce to conduct its proceedings.
---------------------------------------------------------------------------

    \32\ Separate rate application and certification forms are 
available on Commerce's website, which is recognized in Commerce's 
nonmarket economy AD initiation notices. See, e.g., Initiation of 
Antidumping and Countervailing Duty Administrative Reviews, 87 FR 
35165, 35166-67 (June 9, 2022) (``The Separate Rate Certification 
form will be available on Commerce's website at https://enforcement.trade.gov/nme/nme-sep-rate.html on the date of 
publication of this Federal Register notice.'').
    \33\ See, e.g., Glass Wine Bottles from Chile, the People's 
Republic of China, and Mexico: Initiation of Less-Than-Fair-Value 
Investigations, 89 FR 4911, 4914 (Jan 25, 2024).
---------------------------------------------------------------------------

    The last proposed provision of Sec.  351.108 is paragraph (e), 
which would require entities that have submitted separate rate 
applications or certifications, and then are subsequently selected to 
be examined as an individually examined respondent, respond to all 
sections of Commerce's antidumping questionnaire in order to be 
eligible for a separate rate. In other words, all entities filing a 
separate rate application or certification must be prepared to fully 
participate in Commerce's proceedings if they are selected to be 
individually examined respondents.

5. Including Procedures for Selecting Respondents, Calculating an All-
Others Rate, Calculating a Rate for Unexamined Respondents, and 
Selecting Voluntary Respondents--Sec.  351.109

    Sections 777A(c)(1) and 777A(e)(1) of the Act direct Commerce to 
determine an individual weighted-average dumping margin or 
countervailable subsidy rate for each known exporter and producer of 
the subject merchandise. However, Commerce may limit its examination to 
a reasonable number of exporters or producers under sections 777A(c)(2) 
and 777A(e)(2) of the Act if it determines that it is not practicable 
to determine an individual weighted-average dumping margin or 
countervailable subsidy rate because of the large number of exporters 
or producers involved in the investigation or review.
    In addition, sections 703(d)(1)(A), 705(c)(5), 733(d)(1)(A), and 
735(c)(5) of the Act set forth the general rules and exceptions which 
Commerce applies in investigations for determining the rate applied to 
all exporters and producers not individually examined in the 
investigation, known as all-others rate, in both the preliminary and 
final determinations.
    Finally, section 782(a) provides that in investigations and 
administrative reviews in which Commerce has limited the number of 
exporters or producers examined, or determined a single-country wide 
rate, Commerce may select voluntary respondents for examination if 
certain criteria are satisfied.
    The current regulations do not address the all-others rate and 
provide little guidance about limiting examination of exporters and 
producers; what guidance does exist in the regulation applies only in 
investigations. The current voluntary respondent regulation at Sec.  
351.204(d) applies only to investigations, does not provide details 
about voluntary respondent submission deadlines, and does not reference 
Commerce's practice for selecting voluntary respondents when there is 
more than one voluntary respondent treatment request on the record. 
Commerce is therefore proposing the addition of Sec.  351.109 to its 
regulations to address and clarify each of these issues.
    Proposed Sec.  351.109(a) would introduce each of these concepts, 
including Commerce's respondent selection practice. Commerce's 
statutory authority to engage in respondent selection is built on the 
proposition ``that the largest exporters by volume are assumed to be 
representative of the non-selected respondents.'' \34\ The Act creates 
this assumption of representativeness by explicitly addressing the 
impracticability of individually examining a large number of 
respondents and the expectation that Commerce use the rates calculated 
for the mandatory respondents as the basis for the rate for firms not 
selected for individual examination.\35\
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    \34\ See PrimeSource Bldg. Prod., Inc. v. United States, 581 F. 
Supp. 3d 1331 (CIT 2022) (``Consistent with this assumption, the 
cases also stand for the proposition that Commerce is expected to 
use the mandatory respondents' rates to determine the antidumping 
duty rate to be assigned to the non-selected respondents.'').
    \35\ See sections 777A(c)(2) and 777A(e)(2)(A) of the Act.
---------------------------------------------------------------------------

    Commerce's respondent selection practice is not a means to gauge 
whether a potential respondent is willing to participate in an 
investigation or review, but rather whether Commerce can effectively 
examine a reasonable number of producers and exporters, as

[[Page 57297]]

Congress intended, to calculate an accurate dumping margin or 
countervailable subsidy rate.\36\ The Act explicitly allows Commerce to 
focus its resources on individual examination of certain respondents 
and, in doing so, allows Commerce to decline to examine others.\37\ In 
codifying Commerce's respondent selection practice, the agency seeks to 
promote transparency and efficiency when conducting administrative 
reviews and investigations involving a large number of known exporters 
and producers of subject merchandise.
---------------------------------------------------------------------------

    \36\ See Parkdale Int'l v. United States, 475 F.3d 1375, 1380 
(Fed. Cir. 2007) (citing Rhone Poulenc, Inc. v. United States, 899 
F.2d 1185, 1191 (Fed. Cir. 1990)).
    \37\ Id.
---------------------------------------------------------------------------

    Sections 777A(c)(1) and 777A(e)(1) of the Act direct Commerce to 
determine an individual weighted-average dumping margin or 
countervailable subsidy rate for each known exporter and producer of 
the subject merchandise in an investigation \38\ or administrative 
review, where practicable, and Commerce has proposed codifying that 
language in Sec.  351.109(b).
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    \38\ For investigations, specifically, current Sec.  351.204(c) 
reflects this general rule. Proposed Sec.  351.109(b) would replace 
that provision, as explained below, and would apply equally to 
administrative reviews, consistent with the language of sections 
777A(c)(1) and 777A(e)(1) of the Act.
---------------------------------------------------------------------------

    However, in many of Commerce's investigations and administrative 
reviews, there are a large number of exporters and producers of the 
merchandise under investigation or review, and therefore Commerce 
normally does not have the resources to examine ``each known exporter 
and producer.'' \39\ Accordingly, Commerce limits the exporters or 
producers under examination consistent with sections 777A(c)(2) and 
777A(e)(2) of the Act.\40\ In doing so, Commerce normally issues a 
respondent selection memorandum that provides its respondent selection 
analysis, which has been affirmed by the CIT as in accordance with 
law.\41\
---------------------------------------------------------------------------

    \39\ See, e.g., Commerce Memorandum, ``2020-2021 Antidumping 
Duty Administrative Review of Circular Welded Carbon-Quality Steel 
Pipe from the United Arab Emirates: Selection of Respondents for 
Individual Examination,'' dated March 18, 2022, (ACCESS Barcode 
4222983-1).
    \40\ Id.
    \41\ See Mid Continent Nail Corp. v. United States, 949 F. Supp. 
2d 1247, 1274 (CIT 2013) (Mid Continent Nail Corp.) (affirming 
``Commerce's decision not to conduct individual reviews of all 
respondents was properly based on the agency's determination that 
the proceeding here involved a ``large number'' of exporters and 
producers.'').
---------------------------------------------------------------------------

    Proposed Sec.  351.109(c) would codify Commerce's long-standing 
respondent selection analysis, whereby Commerce determines based on 
record information whether it is practicable to determine individual 
dumping margins or countervailable subsidy rates for every exporter or 
producer. If it is not practicable to do so because of the large number 
of exporters or producers involved in an investigation or review, in 
accordance with proposed Sec.  351.109(c)(1), Commerce would then 
determine the exporters or producers to be examined based on either a 
sample of exporters or producers that is statistically valid based on 
record information or the number of respondents that can be reasonably 
examined based on the largest volume of exports of subject merchandise 
from the exporting country.
    Notably, the Act does not provide guidance as to how Commerce 
should reach a statistically valid result or how Commerce must account 
for the largest volume of subject merchandise that can reasonably be 
examined.\42\ Moreover, the Act does not require Commerce to use only 
the two aforementioned methodologies in limiting its examination.\43\ 
Rather, the Act grants Commerce discretion in reaching a ``reasonable 
number'' of respondents for individual examination, accounting for any 
practicability concerns that may affect Commerce's ability to examine 
multiple respondents.\44\
---------------------------------------------------------------------------

    \42\ See Shanxi Hairui Trade Co. v. United States, 503 F. Supp. 
3d 1307, 1320 (CIT 2021), aff'd, 39 F.4th 1357 (Fed. Cir. 2022) 
(``The statute authorizes Commerce to employ a statistically valid 
sampling method when choosing respondents to investigate, but does 
not instruct Commerce as to how to reach a statistically valid 
result in calculating the sample rate . . .''); Pakfood Pub. Co. v. 
United States, 753 F. Supp. 2d 1334, 1343 (CIT 2011), aff'd, 453 F. 
App'x 986 (Fed. Cir. 2011) (``{Commerce{time} turns to issuing Q & V 
questionnaires or other sources of information when the CBP data for 
the subject merchandise in question does not provide sufficient or 
adequate data for the Department's respondent selection 
purposes.'').
    \43\ See United States v. Rodgers, 461 U.S. 677, 706 (1983) 
(``The word ``may,'' when used in a statute, usually implies some 
degree of discretion . . . {but{time}  can be defeated by 
indications of legislative intent to the contrary or by obvious 
inferences from the structure and purpose of the statute.'').
    \44\ See Mid Continent Nail Corp., 949 F. Supp. 2d at 1272 
(``{N{time} either the statute nor the legislative history makes any 
reference to ``reasonable volume'' (only ``the largest volume of the 
subject merchandise . . . that can be reasonably examined.'')); see 
also Husteel Co. v. United States, 98 F. Supp. 3d 1315, 1331 (CIT 
2015) (citing Mid Continent Nail Corp., 949 F. Supp. 2d at 1272) 
(``{N{time} othing herein should be understood to suggest that 
Commerce's discretion to choose between the two methodologies . . . 
is wholly unfettered, or that `representativeness' could never 
constrain Commerce's ability to . . . affect a determination as to 
whether a specific number of exporters and producers is 
``reasonable'' given the facts of a particular case.'').
---------------------------------------------------------------------------

    When Commerce determines to limit the number of exporters or 
producers for individual examination based on the largest volume of 
exports of subject merchandise from the exporting country, proposed 
Sec.  351.109(c)(2)(i)-(iv) would provide the factors Commerce will 
consider as part of its analysis. Under Sec.  351.109(c)(2)(i), 
Commerce would first select the data source to determine the largest 
exporters or producers of subject merchandise. Normally, Commerce's 
selection would be based on information derived from CBP, but Commerce 
may use another reasonable means of selecting potential respondents in 
an investigation or review, such as quantity and value questionnaires. 
Under Sec.  351.109(c)(2)(ii), Commerce would then select the largest 
exporters or producers of the subject merchandise. Normally, that 
analysis would be conducted based on the volume of imports of subject 
merchandise. However, the analysis may instead be conducted based on 
the value of imported products, depending on the product and record 
information.
    Under proposed Sec.  351.109(c)(2)(iii), once the list of exporters 
or producers with the largest number of imports, either through volume 
or value, is compiled, Commerce would next determine if the number of 
exporters or producers on the list is too large to practically 
individually examine each known exporter and producer of subject 
merchandise. This provision lists the factors which Commerce might 
consider in making such a determination, including the amount of 
resources and detailed analysis which would be necessary for Commerce 
to examine each potential respondent's information, the current and 
future workload of the office administering the proceeding, and 
Commerce's overall current resource availability.
    Under proposed Sec.  351.109(c)(2)(iv), if Commerce determines that 
the number of exporters is too large to practically individually 
examine each known exporter or producer of the subject merchandise, 
Commerce would then determine the number of exporters or producers 
which can be reasonably examined. Under this provision, Commerce would 
first consider the total and relative volumes (or values) of entries of 
subject merchandise for each potential respondent derived from the data 
source considered in Sec.  351.109(c)(2)(ii), then rank potential 
respondents by the total volume or value of entries into the United 
States during the relevant period. Lastly, Commerce would determine how 
many respondents it can reasonably examine based on that information 
and select the exporters or producers with the largest

[[Page 57298]]

volume or values of entries consistent with that number.
    In addition, proposed Sec.  351.109(c)(2)(v) would address 
situations in which one or more selected potential respondents do not 
respond to Commerce's questionnaires or elect to withdraw from 
participation in the segment of the proceeding soon after filing 
questionnaire responses, or, early in the segment of a proceeding, 
Commerce determines that they are no longer participating in the 
investigation or administrative review \45\ or that their U.S. sales 
are not bona fide sales of subject merchandise.\46\ In each of those 
cases, when Commerce is selecting respondents based on the largest 
exporter or producers, Commerce proposes, at its discretion, to select 
the exporter or producer with the next largest volume or values to 
replace the respondents initially selected for examination.\47\
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    \45\ See, e.g., Fresh Garlic from the People's Republic of 
China: Final Results of the Changed Circumstances Review, 80 FR 
57579 (September 24, 2015), and accompanying Issues and Decision 
Memorandum at Comment 4 (analyzing the additional burdens of 
selecting another respondent following the withdrawal of a selected 
respondent); see also Viet I-Mei Frozen Foods Co. v. United States, 
83 F. Supp. 3d 1345, 1362 (CIT 2015), aff'd, 839 F.3d 1099 (Fed. 
Cir. 2016) (``{T{time} o the prevention of abuse where Commerce 
expends resources to initiate an individual examination--and the 
respondent seeks to withdraw its participation when it changes its 
mind about the benefit of such examination and prefers the `all 
others' rate instead--is a reasonable basis on which Commerce may 
decline to abort its examination.'').
    \46\ Commerce has a long history of reviewing only bona fide 
sales in investigations, administrative reviews and new shipper 
reviews. See, e.g., Windmill Int'l Pte v. United States, 193 F. 
Supp. 2d 1303, 1312-1314 (CIT 2002) (affirming Commerce's rescission 
of an administrative review because it determined that the 
respondent's sale of two cut-to-length carbon steel plates to the 
United States was not ``commercially reasonable and was atypical of 
the normal business practices between Windmill and the United States 
purchaser.''). Therefore, the language as proposed will have 
Commerce select respondents only from those exporter or producers 
with bona fide sales to the United States. In determining if a sale 
is bona fide, Commerce may consider the factors listed in section 
751(a)(2)(B)(iv) of the Act and Sec.  351.214(k).
    \47\ Although this provision would apply when Commerce selects 
respondents based on the largest exporters or producers of subject 
merchandise, it could also select further respondents when using a 
sampling methodology to select a respondent for individual 
examination, although in that case Commerce need not select 
additional exporters or producers based on the volume or value of 
imports.
---------------------------------------------------------------------------

    With respect to proposed Sec.  351.109(d), it is important to 
recognize that current Sec.  351.204(c) states that Commerce ``may 
decline to examine a particular exporter or producer if that exporter 
or producer and the petitioner agree.'' Commerce proposes to move this 
provision to new Sec.  351.109(d) and revise it to become a waiver 
provision.\48\ Accordingly, the proposed new paragraph states that 
Commerce may waive individual examination of an exporter or producer if 
both the selected respondent and petitioner file waiver requests for 
that exporter or producer no later than five days after Commerce has 
selected respondents. If Commerce determines to provide such a waiver 
and had selected the waived respondent based on an analysis of the 
largest exporters or producers, proposed Sec.  351.109(d) provides that 
Commerce could select the next largest exporter or producer to replace 
the waived respondent.
---------------------------------------------------------------------------

    \48\ See Oregon Steel Mills Inc. v. United States, 862 F.2d 
1541, 1545-46 (Fed. Cir. 1988) (recognizing that Congress intended 
to allow Commerce the authority to avoid the investigative burden 
associated with an administrative review in situations where the 
domestic industry has no continued interest in proceeding).
---------------------------------------------------------------------------

    Proposed Sec.  351.109(e) restates Commerce's expressed authority 
under section 777A(e)(2)(B) of the Act to calculate a single country-
wide subsidy rate for all exporters and producers if it is not 
practicable to determine individual countervailable subsidy rates due 
to the large number of exporters or producers involved in the 
investigation or review.\49\
---------------------------------------------------------------------------

    \49\ See, e.g., Honey from Argentina: Preliminary Affirmative 
Countervailing Duty Determination and Alignment with Final 
Antidumping Determination on Honey from the People's Republic of 
China, 66 FR 14521, (March 13, 2001) (``Commerce determined that it 
would not be practicable to investigate alleged countervailable 
subsidies received by individual honey producers and exporters in 
Argentina.'') and Notice of Final Affirmative Countervailing Duty 
Determination and Final Negative Critical Circumstances 
Determination: Certain Softwood Lumber Products from Canada, 67 FR 
15545, 15547 (April 2, 2002).
---------------------------------------------------------------------------

    Section (f) of proposed Sec.  351.109 would set forth the 
calculation of the all-others rate set forth for final determinations 
in sections 705(c)(5) and 735(c)(5) of the Act and generally described 
for preliminary determinations in sections 703(d)(1)(A) and 
733(d)(1)(A) of the Act. As the Statement of Administrative Action 
Accompanying the Uruguay Round Agreements Act (SAA) explains, these 
provisions allow for Commerce to ``calculate individual dumping margins 
for those firms selected for examination and an `all others' rate to be 
applied to those firms not selected for examination.'' \50\ According 
to the SAA, the goal of the ``all others'' rate is to reflect the 
actual dumping margin or countervailing subsidy rate of the non-
selected respondents as accurately as possible.\51\
---------------------------------------------------------------------------

    \50\ See Statement of Administrative Action Accompanying the 
Uruguay Round Agreements Act, H.R. Doc. 103-316 (1994) (SAA) at 873, 
reprinted in 1994 U.S.C.C.A.N. 4040, 4200.
    \51\ Id.
---------------------------------------------------------------------------

    Proposed sections 351.109(f)(1)(i) and (ii) would set forth the 
general rule for determining the all-others rate as reflected in 
sections 705(c)(5)(A)(i) and 735(c)(5)(A)(i) of the Act. Those 
provisions state that, in general, the all-others rate will be equal to 
the weighted average of the dumping margins or countervailable subsidy 
rates calculated for those exporters and producers that are 
individually investigated, exclusive of any zero and de minimis 
margins, and any margins determined entirely on the basis of the facts 
available.\52\
---------------------------------------------------------------------------

    \52\ See sections 705(c)(5) and 735(c)(5) of the Act; see also 
MacLean-Fogg Co. v. United States, 753 F.3d 1237, 1239 (Fed. Cir. 
2014) (recognizing that ``{t{time} o establish the all-others rate, 
Commerce first discarded the AFA rate assigned to the three 
mandatory respondents--correctly so . . .'').
---------------------------------------------------------------------------

    However, Commerce has encountered two common scenarios in which the 
application of the general rule for determining the all-others rate 
would not be appropriate or would have negative consequences based on 
the facts on the record. Accordingly, Commerce proposes to codify these 
exceptions in new Sec.  351.109(f)(2)(i) and (ii). In one scenario, if 
Commerce determines that only one examined respondent's countervailable 
subsidy rate or weighted-average dumping margin satisfies the criteria 
set forth in sections 705(c)(5) and 735(c)(5) of the Act, respectively, 
Commerce applies that countervailable subsidy rate or weighted-average 
dumping margin as the all-others rate.\53\ That scenario and practice 
would be codified in Sec.  351.109(f)(2)(i).\54\
---------------------------------------------------------------------------

    \53\ See Mid Continent Steel & Wire, Inc. v. United States, 321 
F. Supp. 3d 1313, 1321 (CIT 2018) (``Applying the statutory method, 
Commerce excluded the PRC-wide rate assigned to {a mandatory 
respondent{time}  and relied on the only other calculated rate, in 
{the{time}  segment, that was not zero, de minimis, or based 
entirely on facts available or AFA . . .'').
    \54\ Id.
---------------------------------------------------------------------------

    In the other common scenario, Commerce calculates dumping margins 
or countervailable subsidy rates for two or more individually 
investigated exporters or producers and then determines that if it were 
to calculate an all-others rate using the actual, weighted-average 
dumping margins or countervailable subsidy rates based on the entities' 
proprietary information, the resulting all-others rate would 
inadvertently divulge each respondent's proprietary information to the 
other individually investigated exporter or producer. This can occur, 
for example, when Commerce determines the all-others rate by 
determining a weighted-

[[Page 57299]]

average of the rates calculated for two exporters or producers, because 
each respondent can often figure out their competitor's proprietary 
information through the resulting weighted-average rate.\55\
---------------------------------------------------------------------------

    \55\ See MacLean-Fogg Co. v. United States, 100 F. Supp. 3d 
1349, 1360-61 (CIT 2015) (recognizing that Commerce's practice ``is 
to take both averages and compare each to the actual weighted-
average (using BPI available to the agency), in order to arrive at 
the nearest approximation of the all-others rate contemplated by'' 
the statute.) (MacLean-Fogg Co.).
---------------------------------------------------------------------------

    Over time, Commerce has implemented a practice to address such a 
situation, which the agency proposes to codify in Sec.  
351.109(f)(2)(ii)(A)-(C). Specifically, Commerce first calculates the 
weighted average of the dumping margins or countervailable subsidy 
rates for the individually-investigated respondents using their 
reported data, including business proprietary data, then calculates a 
simple average of the individually-investigated respondents' dumping 
margins or countervailable subsidy rates, as well as a weighted-average 
dumping margin or countervailable subsidy rate based on the 
respondents' publicly-ranged data.\56\ Once Commerce has both the 
simple average and publicly-ranged weighted-average margins or rates, 
Commerce compares them to the margins or rates calculated using the 
companies' proprietary information.\57\ If the simple average is 
numerically closer to the weighted-average margin or rate using the 
proprietary information, Commerce would use the simple average for the 
all-others rate.\58\ If the weighted-average margin or rate based on 
publicly-ranged information is closer to the weighted-average margin or 
rate based on proprietary data, then that margin or rate, instead, 
would be the margin or rate Commerce applies to the all-other exporters 
and producers.\59\
---------------------------------------------------------------------------

    \56\ Id.; see, e.g., Aluminum Extrusions from the People's 
Republic of China: Final Results of Countervailing Duty 
Administrative Review; 2010 and 2011, 79 FR 634 (January 2, 2014), 
and accompanying IDM (Aluminum Extrusions from the People's Republic 
of China; 2010 and 2011 IDM) at Comment 3; and Certain Frozen 
Warmwater Shrimp from India: Preliminary Countervailing Duty 
Determination, 78 FR 33344 (June 4, 2013), and accompanying PDM, 
unchanged in Certain Frozen Warmwater Shrimp from India: Final 
Affirmative Countervailing Duty Determination, 78 FR 50385 (August 
19, 2013).
    \57\ See MacLean-Fogg Co., 100 F. Supp. 3d at 1360-61.
    \58\ Id.
    \59\ Id.
---------------------------------------------------------------------------

    In addition, sections 705(c)(5)(A)(ii) and 735(c)(5)(A)(ii) of the 
Act provide for an exception to the general all-others rule, which 
would be reflected in proposed Sec.  351.109(f)(2)(iii). Those 
provisions of the Act state that if the calculated rates for all 
selected respondents are zero, de minimis, or based entirely on facts 
available under section 776 of the Act, Commerce may use ``any 
reasonable method to establish an all-others rate for exporters and 
producers not individually examined.'' \60\ The Act and proposed 
regulation emphasize that one reasonable method Commerce may use under 
this exception includes ``averaging the estimated weighted average 
dumping margins or countervailable subsidy rates determined for the 
individually investigated exporters and producers'' using rates that 
are zero, de minimis, or based entirely on facts available.\61\ The SAA 
provides that ``the expected method is for Commerce to weight-average 
such rates to determine the non-selected respondents' rate.'' \62\ 
However, the SAA also states that if the expected method ``is not 
feasible, or if it results in an average that would not be reasonably 
reflective of potential dumping margins for non-investigated exporters 
or producers, Commerce may use other reasonable methods.'' \63\
---------------------------------------------------------------------------

    \60\ Sections 705(c)(5)(A)(ii) and 735(c)(5)(A)(ii) of the Act.
    \61\ Id.
    \62\ See SAA at 873.
    \63\ Id.
---------------------------------------------------------------------------

    Over the many years Commerce has applied its nonmarket economy 
country methodology, when the agency has determined that the nonmarket 
economy country entity has not participated in its proceedings or acted 
to the best of its ability in providing necessary information, Commerce 
has consistently applied a nonmarket economy country rate consisting of 
a single dumping margin applicable to all exporters and producers not 
receiving a ``separate rate'' in accordance with the facts available 
and adverse facts available provisions of sections 776(a) and (b) of 
the Act and current Sec.  351.107(d).\64\ Commerce has consistently 
explained that a nonmarket economy country entity is a singular entity, 
a nonmarket economy country rate is not an all-others rate, and the 
all-others rate provision in the Act does not apply in AD 
investigations covering nonmarket economy countries.\65\ To provide 
clarity to the public, Commerce proposes Sec.  351.109(f)(3), which 
would explain both that the rate determined for a nonmarket economy 
country entity is not an all-others rate and that unlike an all-others 
rate, which may not be increased or decreased in subsequent segments of 
an AD proceeding, a nonmarket economy country entity rate may be 
modified in subsequent segments of a proceeding if the nonmarket 
economy country entity is selected for examination.\66\
---------------------------------------------------------------------------

    \64\ See, e.g., 1,1,1,2-Tetrafluroethane from the People's 
Republic of China: Final Determination of Sales at Less Than Fair 
Value, 79 FR 62597 (October 20, 2014), and accompanying IDM at 
Comment 1.
    \65\ See Thuan An Prod. Trading & Serv. Co. v. United States, 
348 F. Supp. 3d 1340, 1349 (CIT 2018) (explaining that Commerce 
should have instead advanced the rationale ``that the {nonmarket 
economy{time}  entity is an individual entity, and therefore 
{{time}  should be considered an individually investigated rate,'' 
rather than attempting to distinguish an {nonmarket economy{time}  
entity rate from an individually investigated rate and the all-
others rate).
    \66\ See, e.g., Aluminum Extrusions from the People's Republic 
of China: Final Results of Antidumping Duty Administrative Review; 
2012-2013, 79 FR 78784 (December 31, 2014), and accompanying IDM at 
Comment 3.
---------------------------------------------------------------------------

    As explained above, the provisions in the Act that address the all-
others rate calculation apply only to CVD and market economy country AD 
investigations. However, Commerce has a long-standing practice of 
looking to the all-others provision in the Act for guidance in 
determining a rate to apply to respondents that have not been 
individually examined in nonmarket economy country AD proceedings, 
market economy country AD administrative reviews, and CVD 
administrative reviews. Specifically, in nonmarket economy country AD 
investigations and administrative reviews, Commerce has taken guidance 
from the all-others rate provision to calculate a rate for non-selected 
companies who have satisfied Commerce's separate rate requirements but 
have not been individually investigated or examined during a POI or POR 
because, like market economy exporters or producers subject to an all-
others rate, these companies will not be individually-examined during 
the relevant period of examination.\67\ In other words, a company that 
demonstrates its entitlement to separate rate status in a nonmarket 
economy country AD investigation or review receives either an 
individual rate (as a mandatory or voluntary respondent) or a separate 
rate (if not selected for individual examination) based on a

[[Page 57300]]

weighted-average of the rates calculated for the individually 
investigated or examined respondents.\68\
---------------------------------------------------------------------------

    \67\ See, e.g., Polyethylene Terephthalate Film, Sheet, and 
Strip from the People's Republic of China: Final Results of 
Antidumping Duty Administrative Review; 2010-2011, 78 FR 35245, 
(June 12, 2013), and accompanying IDM at Comment 4 (citing Amanda 
Foods (Vietnam) Ltd. v. United States, 647 F. Supp. 2d 1368, 1379 
(CIT 2009) (``To determine the dumping margin for non-mandatory 
respondents in {nonmarket economy{time}  cases (that is, to 
determine the `separate rates' margin), Commerce normally relies on 
the `all others rate' provision of {the statute{time} .''). Commerce 
is now proposing to add a new regulation, Sec.  351.108, which sets 
forth the separate rates requirements in this Proposed Rule.
    \68\ See Viet I-Mei Frozen Foods Co. v. United States, 839 F.3d 
1099, 1102 (Fed. Cir. 2016) (affirming Commerce's practice of 
establishing differing treatment between the nonmarket economy 
entity rate and the separate rate respondents.); see also Albemarle 
Corp. & Subsidiaries v. United States, 821 F.3d 1345, 1349 (Fed. 
Cir. 2016) (explaining that when all individually examined exporters 
are assigned de minimis margins or countervailable rates, the 
``expected method'' is for Commerce to assign a separate rate by 
taking the average of the de minimis margins or countervailable 
subsidy rates assigned to the individually examined respondents).
---------------------------------------------------------------------------

    Similarly, in AD administrative reviews of market economy countries 
and CVD reviews, Commerce will normally apply the weighted-average 
margin or rate of the individually examined respondents to those 
exporters or producers not selected for individual examination, despite 
a request for individual review, because, like market economy exporters 
or producers subject to an all-others rate, those non-selected 
exporters or producers will not be individually examined during the 
relevant POR.\69\
---------------------------------------------------------------------------

    \69\ See, e.g., Stainless Steel Bar from India: Final Results of 
Administrative Review of the Antidumping Duty Order; 2017- 2018, 84 
FR 56179, (October 21, 2019), and accompanying IDM at Comment 7 
(``Generally, Commerce looks to section 735(c)(5) of the Act, which 
provides instructions for calculating the all-others rate in an 
investigation, for guidance when calculating the rate for companies 
that were not selected for individual review in an administrative 
review.''); see also Circular Welded Carbon Steel Pipes and Tubes 
from the Republic of Turkey: Final Results of Countervailing Duty 
Administrative Review and Rescission of Countervailing Duty 
Administrative Review, in Part; Calendar Year 2017, 84 FR 56173 
(October 21, 2019), and accompanying IDM at 5 (explaining Commerce's 
application of the all-others rate in a CVD context).
---------------------------------------------------------------------------

    Proposed Sec.  351.109(g) would codify Commerce's practice of 
determining a dumping margin or countervailable subsidy rate to apply 
to respondents not individually investigated or examined under each of 
those scenarios, and would provide, in particular, that in each of 
these investigations and reviews, Commerce may use a simple average 
instead of a weighted-average in its calculations if the use of a 
weighted-average margin or rate would result in the release of one 
exporter's or producers' business proprietary information to 
another.\70\
---------------------------------------------------------------------------

    \70\ See, e.g., Aluminum Extrusions from the People's Republic 
of China: Final Results of Countervailing Duty Administrative 
Review; 2010 and 2011 IDM at Comment 3.
---------------------------------------------------------------------------

    Lastly, proposed Sec.  351.109(h) covers the selection of voluntary 
respondents. Under section 782(a) of the Act, even when Commerce limits 
the number of respondents selected as mandatory respondents, an 
exporter or producer may still obtain its own margin or rate as a 
voluntary respondent if its voluntary respondent submissions are timely 
and the number of exporters or producers subject to an investigation or 
review is not so large that any additional individual examination of 
such exporters or producers would be unduly burdensome for Commerce and 
inhibit the timely completion of the investigation or review.\71\ 
Although current Sec.  351.204(d) references how a firm may request 
voluntary respondent status under section 782(a) of the Act, the 
regulation does not address the order in which a voluntary respondent 
may be selected or the filing deadlines applicable to voluntary 
respondents. Accordingly, in transferring the current voluntary 
respondent provisions from Sec.  351.204(d) to proposed Sec.  
351.109(h), Commerce has proposed to add additional provisions covering 
voluntary respondents.
---------------------------------------------------------------------------

    \71\ See sections 782(a)(1)(A) and (B) of the Act; see also SAA 
at 843 (``Commerce may decline to analyze voluntary responses 
because it would be unduly burdensome and would preclude the 
completion of timely investigations or reviews.''); and Grobest & I-
Mei Indus. (Vietnam) Co. v. United States, 853 F. Supp. 2d 1352, 
1365 (CIT 2012) (citing Longkou Haimeng Machinery Co., Ltd. v. 
United States, 581 F. Supp. 2d 1344, 1353 (CIT 2012) (``When 
Commerce can show that the burden of reviewing a voluntary 
respondent would exceed that presented in the typical antidumping or 
countervailing duty review, the court will not second guess 
Commerce's decision on how to allocate its resources.'') (Longkou 
Haimeng Machinery)) Grobest & I-Mei Indus. (Vietnam).
---------------------------------------------------------------------------

    Specifically, as proposed, current Sec.  351.204(d)(1)-(3) would be 
moved to new Sec.  351.109(h)(1), (2) and (3)(i). In addition, Commerce 
has added two new provisions. First, Sec.  351.109(h)(3)(ii) states 
that if more than one exporter or producer seeks voluntary respondent 
treatment, and Commerce determines to examine one or more voluntary 
respondents individually, it will select voluntary respondents based on 
the chronological order in which the requests were filed correctly on 
the record.\72\ This approach is consistent with Commerce's current 
voluntary respondent selection policy.\73\
---------------------------------------------------------------------------

    \72\ If a voluntary respondent request is submitted on the 
record but is later determined to have been submitted incorrectly, 
then this provision would not apply to that exporter or producer and 
Commerce would select the next exporter or producer as a voluntary 
respondent which filed its voluntary respondent request correctly on 
the record.
    \73\ See, e.g., Commerce Memorandum, ``Administrative Review of 
the Countervailing Duty Order on Certain Softwood Lumber Products 
from Canada: Respondent Selection,'' dated April 26, 2022, (ACCESS 
Barcode 4235480-01), at 8-10 (``Commerce will select voluntary 
respondents based on the order in which the requests are 
received.'').
---------------------------------------------------------------------------

    In addition, Commerce proposes adding Sec.  351.109(h)(4), which 
addresses the timing of voluntary respondent submissions. The provision 
would explain that the deadlines for voluntary respondent submissions 
would generally be the same as deadlines for submissions by 
individually investigated respondents. Furthermore, it would provide 
that if there are two or more individually investigated respondents 
with different deadlines for a submission, such as when one gets an 
extension of time which is longer than the extension of time granted to 
another (or none at all), then the voluntary respondent will normally 
be required to file its submission to Commerce by the earliest deadline 
required of the respondents selected for individual examination.

6. Revising References to Persons Examined, Treatment of Voluntary 
Respondents, and Exclusion From AD and CVD Orders--Sec.  351.204

    Section 351.204 applies to certain general procedures and policies 
in an investigation once Commerce determines that a petition is 
sufficient under Sec.  351.203. The current version includes paragraphs 
covering the period of investigation, Sec.  351.204(b); the selection 
of persons to be examined, Sec.  351.204(c); the treatment of voluntary 
respondents not selected for individual examination, Sec.  351.204(d); 
and the exclusion of certain exporters and producers from an AD or CVD 
order, Sec.  351.204(e).
    Commerce proposes revising Sec.  351.204 in accordance with both 
its proposed revisions of the cash deposit regulation, Sec.  351.107, 
and the creation of a new respondent selection and all-others 
regulation, Sec.  351.109, as discussed in greater detail elsewhere in 
this Proposed Rule.
    Revising and simplifying Sec.  351.204 is the logical outgrowth of 
the proposed revisions to part 351. Commerce may limit its examination 
of potential respondents not only in investigations, but in 
administrative reviews as well. Accordingly, it is reasonable to have 
the respondent selection provision appear in a regulation that applies 
to administrative reviews as well as investigations. Accordingly, 
Commerce proposes moving the parts of current Sec.  351.204(c) that 
apply to both investigations and administrative reviews, including the 
waiver provision and the statutory reference to a single country-wide 
subsidy rate, to new Sec.  351.109. Commerce proposes to retain 
language in current Sec.  351.204(c) that applies only to 
investigations, while adding new language in that provision that 
references the more general respondent selection provision,

[[Page 57301]]

Sec.  351.109(c). Commerce also proposes to revise Sec.  351.213(f) 
pertaining to administrative reviews to reflect similar respondent 
selection language for that segment of an AD or CVD proceeding.
    Second, the same issue applies to the selection of voluntary 
respondents, pursuant to section 782(a) of the Act: Commerce may select 
voluntary respondents in both investigations and administrative 
reviews. Accordingly, Commerce proposes moving the general voluntary 
respondent selection provision from current Sec.  351.204(d) to new 
Sec.  351.109(h). Likewise, Commerce proposes to add a sentence to 
Sec.  351.204(c) that references new Sec.  351.109(h) and states that 
Commerce may determine to examine voluntary respondents in 
investigations. Similar language appears in revised Sec.  351.213(f) to 
indicate that voluntary respondents may be selected in administrative 
reviews.
    Third, with the revision of the cash deposit regulation, Sec.  
351.107, Commerce concludes that it would be logical to also revise and 
move current Sec. Sec.  351.204(e)(1) through (3) to that regulation. 
Commerce proposes language in new Sec.  351.107(c)(3) to address 
scenarios in which Commerce would apply a producer/exporter cash 
deposit combination or combinations in excluding producers and 
exporters from AD or CVD investigations and orders as currently 
addressed in Sec.  351.204(e)(1) through (3)).
    With the changes being proposed to current Sec.  351.204(d) and 
(e), Commerce therefore proposes renumbering Sec.  351.204(e)(4) to 
Sec.  351.204(d), retitling the subsection, ``Requests for exclusions 
from countervailing duty orders based on investigations conducted on an 
aggregate basis'' and removing Sec.  351.204(e) entirely.
    Finally, with these modifications to Sec.  351.204(c) and (d), 
Commerce also proposes updating the heading of the regulation and 
updating the introductory paragraph, Sec.  351.204(a), to reflect those 
changes. As proposed, the new heading would be ``Period of 
investigation; requests for exclusions from countervailing duty orders 
based on investigations conducted on an aggregate basis.'' Revised 
paragraph (a), as proposed, would reference the rules regarding the 
period of investigation and exclusion requests for countervailing duty 
investigations conducted on an aggregate basis.

7. Clarifying That Assessment Rates May Be Calculated on an Ad Valorem 
or a Per-Unit Basis--Sec.  351.212(b)(ii)

    Section 731 of the Act directs Commerce to impose duties on 
imported merchandise ``that is being, or likely to be, sold in the 
United States at less than fair value.'' Section 751(a)(2)(C) of the 
Act states that an AD margin ``shall be the basis for the assessment of 
antidumping duties on entries of merchandise covered by the 
determination and for {cash{time}  deposits of estimated duties.'' The 
cash deposit rate is based on an estimated AD rate and applied to 
future entries, \74\ whereas the assessment rate is based on the final, 
accurate AD margin for the relevant period and is applied to entries 
made during the period covered by an administrative review.\75\
---------------------------------------------------------------------------

    \74\ See section 773(d)(1)(B); see also Koyo Seiko Co. v. United 
States, 258 F.3d 1340, 1342-44 (Fed. Cir. 2001) (Koyo Seiko Co.).
    \75\ See section 751(a)(2); see also Koyo Seiko Co., 258 F.3d at 
1347-48.
---------------------------------------------------------------------------

    The Act, however, does not require any particular method for 
calculating an assessment rate.\76\ Commerce acknowledged this 
discretion in the 1997 Final Rule, stating that ``neither the Act nor 
the AD Agreement specifies whether sales or entries are to be reviewed, 
nor do they specify how {Commerce{time}  must calculate the amount of 
duties to be assessed.'' \77\ In calculating an assessment rate, the 
Federal Circuit in Torrington held that the Act simply requires that 
the difference between the foreign market value and United States price 
serve as the basis for assessed duties.\78\
---------------------------------------------------------------------------

    \76\ See section 751(a)(2) of the Act.
    \77\ 1997 Final Rule, 62 FR at 27314 (internal citations 
omitted).
    \78\ Torrington Co. v. United States, 44 F.3d 1572, 1578 (Fed. 
Cir. 1995); see also Koyo Seiko Co., 258 F.3d at 1346.
---------------------------------------------------------------------------

    Commerce's regulations codify its assessment calculation 
methodology. Currently, the regulation under Sec.  351.212(b) broadly 
states that ``the Secretary will normally calculate an assessment rate 
for each importer of subject merchandise covered by the review.'' \79\ 
The regulations explain that the assessment rate is determined by 
``dividing the dumping margin found on the subject merchandise examined 
by the entered value of such merchandise for normal customs duty 
purposes.'' \80\ This assessment rate method is also known as an ad 
valorem, or a percentage of value, basis.
---------------------------------------------------------------------------

    \79\ 19 CFR Sec.  351.212(b).
    \80\ Id.
---------------------------------------------------------------------------

    Commerce also calculates an assessment rate on a per-unit basis, 
however, when an ad valorem basis will result in an under-collection of 
duties, such as when entered sales values are unknown, undervalued, 
systematically understated, or otherwise unreliable.\81\ As explained 
above with respect to the proposed revised cash deposit regulation, 
Sec.  351.107(c), units upon which an assessment rate may be calculated 
include, but are not limited to, weight, length, volume, packaging 
(such as the type and size of packaging), and individual units of the 
product itself. The CIT has affirmed this practice, holding that 
``although Commerce normally calculates assessment rates on an ad 
valorem basis, it has discretion to revise the assessment methodology 
and adopt a reasonable method for ensuring an accurate collection of 
total duties due.'' \82\
---------------------------------------------------------------------------

    \81\ See Certain Activated Carbon from the People's Republic of 
China IDM at 34 (stating ``the regulation, however, does not 
proscribe [Commerce] from resorting to other methods of calculating 
and assigning assessment and cash deposit rates, and the agency does 
so in certain circumstances . . . {Commerce{time}  changed the cash 
deposit and assessment methodology from an ad valorem to a per-unit 
basis because the application of an ad valorem rate based on net 
U.S. price would yield an under-collection of duties due to Jacobi's 
undervaluing of its United States sales.''); see also 1-
Hydroxyethylidene-1, 1-Diphosphonic Acid from the People's Republic 
of China IDM at Comment 5; Wooden Bedroom Furniture from the 
People's Republic of China IDM at Comment 17; and Honey from the 
People's Republic of China IDM at Comment 7.
    \82\ See Wuhan Bee, Slip Op. 2008-61 at 12.
---------------------------------------------------------------------------

    Commerce is therefore proposing dividing current Sec.  351.212(b) 
into paragraphs (i) and (ii), the first paragraph applicable to 
assessment rates determined on an ad valorem basis and the second 
applicable to assessment rates determined on a per-unit basis.

8. Recognizing That Commerce May Select Respondents and Voluntary 
Respondents Practice in Administrative Reviews--Sec.  351.213(f)

    As discussed above, Commerce is proposing revisions to its 
regulations in Sec.  351.109 to reflect its practice of limiting the 
number of exporters or producers examined when it is not practicable to 
examine each known exporter producer in both investigations and 
administrative reviews. Furthermore, Commerce is also proposing moving 
and revising provisions covering voluntary respondent selection from 
Sec.  351.204(d), which covers only investigations, to Sec.  
351.109(h), because Commerce may select voluntary respondents in both 
investigations and administrative reviews, as affirmed by the CIT.\83\
---------------------------------------------------------------------------

    \83\ See Qingdao Qihang Tyre Co. v. United States, 308 F. Supp. 
3d 1329, 1363 (CIT 2018) (affirming Commerce's determination in an 
administrative review to individually examine two respondents based 
on the statutory authority to examine the ``exporters and producers 
accounting for the largest volume of the subject merchandise from 
the exporting country that can be reasonably examined.''); see also 
Grobest & I-Mei Indus. (Vietnam), 853 F. Supp. 2d at 1365 (citing 
Longkou Haimeng Machinery Co., 581 F. Supp. 2d at 1353 (``When 
Commerce can show that the burden of reviewing a voluntary 
respondent would exceed that presented in the typical antidumping or 
countervailing duty review, the court will not second guess 
Commerce's decision on how to allocate its resources.'').

---------------------------------------------------------------------------

[[Page 57302]]

    In proposed and updated Sec.  351.204(c), Commerce would 
acknowledge that in investigations, specifically, the agency may limit 
the number of exporters or producers examined, and, in accordance with 
section 782(a) of the Act, Commerce may also determine to examine 
voluntary respondents in investigations. Likewise, in Sec.  351.214(f) 
similar proposed language would recognize that in administrative 
reviews, Commerce may both limit the number of exporters or producers 
examined and select voluntary respondents. The language proposed for 
both provisions references the criteria and procedures set forth in 
Sec.  351.109(c), to limit selection of exporters and producers, and 
Sec.  351.109(h), to select voluntary respondents, in investigations 
and administrative reviews.
    As mentioned above, the current regulation does not address 
Commerce's respondent selection process during administrative reviews 
and the practicality of individually examining multiple respondents in 
an administrative review when faced with a large number of exporters 
and producers. Accordingly, the proposed changes to Sec.  351.109 and 
Sec.  351.213(f) would provide clarity on that issue. Furthermore, 
although current Sec.  351.213(f) allows for the examination of 
voluntary respondents in administrative reviews, the reference to Sec.  
351.109(h) in the proposed revision would make the regulation 
consistent with the other aforementioned proposed changes to the 
regulations.

9. Revising Header to Section 214 Identify Expedited Reviews Separately 
From New Shipper Reviews--Sec.  351.214

    Commerce proposes modifying the heading of Sec.  351.214, which 
currently reads ``New shipper reviews under section 751(a)(2)(B) of the 
Act,'' by adding to it the phrase ``and expedited reviews in 
countervailing duty proceedings.'' Section 751(a)(2)(B) of the Act 
provides Commerce the authority to determine dumping margins and 
countervailing duty rates for exporters and producers that did not 
export subject merchandise to the United States during the period of 
investigation, referred to as ``new shipper reviews,'' and Sec.  
351.214 contains several provisions with respect to the conduct and 
administration of new shipper reviews. However, current paragraph (l) 
of Sec.  351.214 does not relate to new shipper reviews but instead 
provides procedures for conducting expedited reviews of exporters not 
selected for individual examination in CVD investigations. Expedited 
reviews in CVD investigations are not derived from, or related to, 
section 751(a)(2)(B) of the Act. Accordingly, Commerce has determined 
that the revision of the section heading to reflect that a proceeding 
separate from new shipper reviews is also covered by Sec.  351.214 
would provide clarity.
    In addition, the Federal Circuit recently held that the 
``individualized-determination provisions'' of section 777A(e) of the 
Act, along with the ``regulatory-implementation authority'' of section 
103(a) of the URAA, explicitly provide Commerce with the authority to 
promulgate Sec.  351.214(l).\84\ The Court held that this regulatory 
provision ``provides one procedure for giving effect to the primary 
policy of providing individual-company rate determinations'' and that 
the ``SAA itself makes the connection between the expedited-review 
process at issue'' and the addition of section 777A(e) to the Act in 
the URAA.\85\ Commerce proposes modifying the heading to Sec.  351.214 
to make it consistent with the holding in COALITION v. U.S..
---------------------------------------------------------------------------

    \84\ Comm. Overseeing Action for Lumber Int'l Trade 
Investigations or Negots. v. United States, 66 F.4th 968, 977 (Fed. 
Cir. 2023) (COALITION v. U.S.).
    \85\ Id. (explaining that ``{u{time} nder a heading, `Company-
Specific Subsidy Rates and Expedited Reviews,' the SAA states: 
`Article 19.3 of the Subsidies Agreement provides that any exporter 
whose exports are subject to a CVD order, but which was not actually 
investigated for reasons other than a refusal to cooperate, shall be 
entitled to an expedited review to establish an individual CVD rate 
for that exporter.''' (citing SAA at 941). The Federal Circuit 
further noted that the SAA also states that ``{s{time} everal 
changes must be made to the [Tariff] Act to implement the 
requirements of Article 19.3'' and that one subsection of the SAA 
explained that the URAA ``eliminates the presumption in favor of a 
single country-wide CVD rate and amends section 777A of the Act to 
establish a general rule in favor of individual CVD rates for each 
exporter or producer individually investigated.'' (citing SAA at 
941)).
---------------------------------------------------------------------------

10. Revising Requirements for Submissions of Rebuttal Factual 
Information; Modifying Deadlines Concerning the Submission of 
Information Pertaining to Factors of Production and Benchmarks for 
Measuring the Adequacy of Remuneration--Sec.  301(b)(2), (c)(3)(i) and 
(c)(3)(ii)

    Commerce proposes to revise one of its reporting regulations, Sec.  
351.301(b)(2), to require greater detail from interested parties. 
Specifically, Sec.  351.301(b)(2), explains that if factual information 
is being provided to rebut, clarify, or correct factual information on 
the record, the submitter must identify the information already on the 
record that is being rebutted, clarified, or corrected. Current Sec.  
351.301(b)(2) does not, however, instruct the submitter to summarize 
the information being provided under this paragraph or describe how 
that new factual information rebuts the information already on the 
record.\86\ This omission creates a burden on both Commerce and 
interested parties to understand why the information being provided 
under this paragraph is being submitted and how it is particularly 
relevant to the information already on the record.
---------------------------------------------------------------------------

    \86\ See Saha Thai Steel Pipe Pub. Co. Ltd. v. United States, 
663 F. Supp. 3d 1356, 1373 (CIT 2023).
---------------------------------------------------------------------------

    Accordingly, to provide clarity to all parties regarding the 
submission of factual information being provided to rebut, clarify, or 
correct information already on the record, Commerce is proposing to 
revise Sec.  351.301(b)(2) to specify that the submitter must also 
provide a narrative summary explaining how the specific factual 
information being provided rebuts, clarifies, or corrects the 
identified factual information already on the record.
    In addition, Commerce is proposing an additional modification to 
its reporting regulation, Sec.  351.301, to update deadlines for filing 
certain information on the record. Current Sec.  351.301(c)(3)(i) and 
(ii) establish time limits for interested parties to submit factual 
information to value factors of production under Sec.  351.408(c) or to 
measure the adequacy of remuneration under Sec.  351.511(a)(2) in AD 
and CVD investigations, administrative reviews, new shipper reviews, 
and changed circumstances reviews.
    Currently, the submissions are due no later than 30 days before the 
scheduled dates of preliminary determinations and results of review. 
However, these submissions sometimes contain hundreds, if not 
thousands, of pages of information that Commerce needs to analyze in a 
short amount of time prior to issuing a preliminary determination or 
the preliminary results. The large volume of information often 
contained in these submissions makes it difficult for Commerce to meet 
its statutory deadlines to determine the appropriate surrogate values 
or benchmarks.
    In addition, since the 30-day deadlines were codified, Commerce has 
experienced a large increase in AD and CVD proceedings and orders which 
it must administer. In order to effectively administer and enforce the 
AD and CVD

[[Page 57303]]

laws, Commerce therefore proposes modifying these time limits to allow 
Commerce additional time to more fully analyze these voluminous 
submissions for purposes of its preliminary decisions.
    Specifically, Commerce proposes revising Sec.  351.301(c)(3)(i) to 
create both a subparagraph (A) and subparagraph (B) covering 
investigations. Under the proposal, Commerce would revise the time 
limit for parties to submit factual information to value factors of 
production under Sec.  351.408(c) in AD investigations to no later than 
60 days before the scheduled date of the preliminary determination and 
proposes revising Sec.  351.301(c)(3)(i)(B) to increase the time limit 
for parties to submit factual information to measure the adequacy of 
remuneration under Sec.  351.511(a)(2) in CVD investigations to no 
later than 45 days before the scheduled date of the preliminary 
determination. Commerce recognizes that the statutory deadline for the 
issuance of a preliminary determination in a CVD investigation \87\ is 
shorter than the preliminary determination in an AD investigation,\88\ 
which is the reason the agency is proposing a change of 15 fewer days 
in the time limit for CVD investigations.
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    \87\ See section 703(b)(1) (requiring Commerce to issue a 
preliminary CVD determination within 65 days after the date of 
initiation). See also Sec.  351.205(b)(1).
    \88\ See section 733(b)(1)(A) (requiring Commerce to issue a 
preliminary AD determination within 140 days after the date of 
initiation). See also 351.205(b)(1).
---------------------------------------------------------------------------

    Furthermore, for administrative reviews, new shipper reviews, and 
changed circumstances reviews, Commerce proposes revising Sec.  
351.301(c)(3)(ii) to require parties to submit factual information to 
value factors of production under Sec.  351.408(c) or to measure the 
adequacy of remuneration under Sec.  351.511(a)(2) no later than 60 
days before the scheduled date of the preliminary results of review.
    Commerce recognizes that in requiring such factual information to 
be submitted earlier in the proceeding, interested parties will have a 
shorter period of time in which to supply potential surrogate and 
benchmark information in AD and CVD proceedings. However, Commerce 
believes that the proposed deadlines will still be sufficient for 
interested parties to gather, prepare and submit that information, 
while also improving Commerce's ability to reach accurate and 
appropriate preliminary determinations in its proceedings.

11. Allowing the Provision of Business Proprietary Information to CBP 
Employees Investigating Negligence, Gross Negligence, or Fraud--Sec.  
351.306(a)(3)

    As amended in 2015, section 777(b)(1)(A)(ii) of the Act states that 
Commerce may disclose proprietary information ``to an officer or 
employee of the United States Customs Service who is directly involved 
in conducting an investigation regarding negligence, gross negligence 
or fraud under this title.'' Current Sec.  351.306(a)(3) states that 
Commerce may disclose business proprietary information to ``an employee 
of U.S. Customs and Border Protection'' involved in conducting ``a 
fraud investigation.'' However, the Act now includes ``negligence'' and 
``gross negligence'' investigations.\89\
---------------------------------------------------------------------------

    \89\ See section 413(a) of the Trade Facilitation and Trade 
Enforcement Act of 2015 (Pub. L. 114-125), 130 Stat. 122 (2016).
---------------------------------------------------------------------------

    Accordingly, Commerce is proposing amendments to Sec.  
351.306(a)(3) to expand the covered investigations to negligence and 
gross negligence investigations as well as fraud investigations. These 
proposed changes would bring Sec.  351.306(a)(3) into conformity with 
section 777(b)(1)(A)(ii) of the Act as amended in 2015.

12. Updating the Facts Available Regulations, Including Adding Language 
From the Trade Preferences Extension Act of 2015--Sec.  351.308(g), 
(h), and (i)

    On June 29, 2015, the Trade Preferences Extension Act of 2015 
(TPEA) was signed into law. Among other changes, TPEA amended 
provisions of section 776 of the Act,\90\ which governs Commerce's 
authority to rely on facts otherwise available in conducting AD and CVD 
proceedings.
---------------------------------------------------------------------------

    \90\ See TPEA of 2015, Public Law 114-27, 129 Stat. 362, 384 
(2015), Sec.  502, codified at 19 U.S.C. 1677(e).
---------------------------------------------------------------------------

    Current Sec.  351.308 addresses Commerce's practices and procedures 
arising out of section 776 of the Act, but there are certain aspects of 
Commerce's practice, and sections of the 2015 amendments, that are not 
currently reflected in Commerce's regulations.
    First, when applying facts available pursuant to section 776(a) of 
the Act, there are cases in which Commerce determines that information 
is missing or unreliable to the extent that the application of total 
facts available is warranted to all of a exporter's or producer's 
calculations and should be applied in determining the antidumping 
margin or countervailable subsidy rate as a whole.\91\ However, in 
other cases, Commerce may determine that only certain information is 
missing or unreliable and, given the facts on the record, it is 
appropriate to apply only partial facts available to a portion of its 
antidumping or countervailing duty analysis and calculations for a 
particular exporter or producer.
---------------------------------------------------------------------------

    \91\ See, e.g., Fine Denier Polyester Staple Fiber from India: 
Final Results of Antidumping Duty Administrative Review, 2018-2019, 
86 FR 29249 (June 1, 2021), and accompanying IDM at Comment 1.
---------------------------------------------------------------------------

    The CIT and the Federal Circuit have upheld Commerce's practice to 
apply ``partial'' and ``total'' facts available under section 776 of 
the Act.\92\ While the Act does not explicitly reference total or 
partial facts available,\93\ courts have recognized and affirmed 
Commerce's authority to use partial facts available when there are 
discrete gaps in the information and total facts available when none of 
a party's information is available, useable, or reliable.\94\ 
Accordingly, Commerce proposes adding Sec.  351.308(g) to codify 
Commerce's long-standing practice to apply either partial or total 
facts available in implementing sections 776(a) and (b) of the Act.
---------------------------------------------------------------------------

    \92\ See, e.g., Mukand, Ltd. v. United States, 767 F.3d 1300, 
1308 (Fed. Cir. 2014) (Mukand II) (affirming Commerce's application 
of total adverse facts available when respondent's sales and cost 
data was unusable), affirming Slip Op. 13-00041 (CIT March 25, 
2013); Kawasaki Steel Corp. v. United States, 110 F. Supp. 2d 1029, 
1043 (CIT 2000) (affirming Commerce's application of partial adverse 
facts available with respect to certain information needed to 
calculate respondent's constructed export price).
    \93\ See Mukand II, Slip Op. 13-00041 (CIT March 25, 2013), 
aff'd, 767 F.3d 1300.
    \94\ See id.
---------------------------------------------------------------------------

    In addition, Commerce also proposes adding paragraphs (h) and (i) 
to Sec.  351.308 to reflect changes incorporated into section 776 of 
the Act by the TPEA. The TPEA amended section 776(c) of the Act to 
provide that when Commerce relies on information obtained in the course 
of an AD or CVD investigation or review pursuant to subsection (c)(1), 
Commerce is not required to corroborate any dumping margin or 
countervailing duty applied in a separate segment of the same 
proceeding pursuant to subsection (c)(2).\95\ Accordingly, Commerce 
proposes adding paragraph (h) to reflect that Commerce is not required 
to conduct a corroboration analysis when applying margins or rates 
derived from separate segments of the same proceeding pursuant to 
section 776(c)(2) of the Act.
---------------------------------------------------------------------------

    \95\ See section 776(c)(2) of the Act.
---------------------------------------------------------------------------

    Furthermore, the TPEA created section 776(d) of the Act, which

[[Page 57304]]

addresses Commerce's authority to select from among the facts otherwise 
available when applying an adverse inference.\96\ Sections 
776(d)(1)(A)(i) and (ii) of the Act provide that when applying an 
adverse inference in a CVD proceeding, Commerce may use a 
countervailable subsidy rate applied for the same or a similar program 
in a CVD proceeding involving the same country and if none exists, 
Commerce may use a countervailable subsidy rate for a subsidy program 
from a proceeding that Commerce considers reasonable. Furthermore, 
section 776(d)(1)(B) provides that when applying an adverse inference 
in AD proceedings, Commerce may use any dumping margin from any segment 
of the proceeding under the applicable antidumping order. In addition, 
when selecting from the subsidy rates or dumping margins specified in 
section 776(d)(1) of the Act, section 776(d)(2) of the Act authorizes 
Commerce to apply the highest rate or margin, based on the evaluation 
of the situation that resulted in Commerce applying an adverse 
inference.
---------------------------------------------------------------------------

    \96\ Id.
---------------------------------------------------------------------------

    Finally, sections 776(d)(3)(A) and (B) of the Act provide that when 
using an adverse inference in selecting among the facts otherwise 
available, Commerce is not required to estimate what the 
countervailable subsidy rate or dumping margin would have been if the 
interested party found to have failed to cooperate under section 
776(b)(1) had cooperated nor to demonstrate that the countervailable 
subsidy rate or dumping margin reflects an alleged commercial reality 
of the interested party.
    In light of these modifications made to section 776 of the Act in 
the TPEA, Commerce proposes adding Sec.  351.308(i)(1), (2), and (3) to 
reflect the facts available language set forth in sections 776(d)(1), 
(2), and (3) of the Act.

13. Revising Case Brief and Rebuttal Brief Regulation To Include 
Executive Summaries--Sec.  351.309(c)(2) and (d)(2)

    Current Sec.  351.309(c)(2) and (d)(2) of Commerce's regulations 
address the filing requirements of case briefs and rebuttal briefs, 
including an ``encouragement'' by the agency that parties ``provide a 
summary of the arguments not to exceed five pages and a table of 
statutes, regulations, and cases cited.'' Such summaries were intended 
to enable the reader to quickly ascertain the main arguments presented 
by interested parties. However, since that language was codified in the 
regulation, Commerce has found that many such summaries submitted in 
briefs and rebuttal briefs have been so general as to be of limited use 
to interested parties and Commerce officials. Furthermore, the absence 
of shorter and more succinct summaries for each of the issues raised in 
interested parties' case and rebuttal briefs has resulted in Commerce 
officials spending considerable time paraphrasing interested parties' 
briefs and arguments in shorter summation for use in final decision 
memoranda.
    Therefore, starting in November 2023, Commerce revised the 
instructions it provided to interested parties in the ``Public 
Comment'' section of its notices of preliminary determination and 
preliminary results \97\ to request that interested parties provide at 
the beginning of their briefs a public executive summary for each issue 
raised in those submissions, defining an ``issue'' as an argument that 
Commerce would normally address in comments in its final issues and 
decision memoranda. Furthermore, since November 2023, Commerce 
requested that interested parties limit their executive summary of each 
issue in briefs and rebuttal briefs to no more than 450 words (not 
including citations). Commerce explained in its preliminary notices 
that it has requested that parties submit such summaries so that those 
summaries can appear in Commerce's issues and decision memoranda.\98\ 
This approach relieves the agency of the effort and time it takes to 
paraphrase interested parties' arguments and also helps assure 
interested parties that Commerce is reflecting their arguments 
accurately in the agency's issues and decision memoranda.
---------------------------------------------------------------------------

    \97\ See, e.g., Thermal Paper from the Republic of Korea: 
Preliminary Results of Antidumping Duty Administrative Review, 2021-
2022, 88 FR 83384, 83386 (November 29, 2023); Refillable Stainless 
Steel Kegs from the People's Republic of China: Preliminary Results 
of the Antidumping Duty Administrative Revie,; 2021-2022, 88 FR 
85230, 85231 (December 7, 2023); and Stilbenic Optical Brightening 
Agents from Taiwan: Preliminary Results of Antidumping Duty 
Administrative Review, 2022, 89 FR 7361, 7362 (February 2, 2024) 
(Brightening Agents from Taiwan Preliminary Results).
    \98\ See, e.g., Brightening Agents from Taiwan Preliminary 
Results, 89 FR at 7362.
---------------------------------------------------------------------------

    Commerce explained in those notices that it was, and is, Commerce's 
intent to use the executive summaries as the basis of the comment 
summaries included in the final decision memoranda that will accompany 
the final results of review.\99\ However, there may be instances in 
which Commerce will need to revise an interested party's executive 
summary for purposes of context, simplicity, or clarity.\100\
---------------------------------------------------------------------------

    \99\ See id., 89 FR at 7362.
    \100\ For example, Commerce may determine to remove or revise 
lengthy footnotes when it places executive summaries in its issues 
and decision memoranda if it determines that lengthy and 
argumentative footnotes were an attempt to avoid the word length 
restrictions for executive summaries requested in the regulation.
---------------------------------------------------------------------------

    Consistent with that new policy, Commerce is proposing revising 
Sec.  351.309(c)(2) and (d)(2) to request the inclusion of an executive 
summary for each argument raised in the brief and rebuttal brief. The 
regulation provides that executive summaries should be no more than 450 
words in length, not counting supporting citations. With respect to 
supporting citations, the new regulatory language is clear that, in 
general, interested parties may include all relevant citations, 
including prior Commerce decisions and Federal Court holdings, without 
concern about the 450-word length.
    In the past, Commerce has ``encouraged'' interested parties to 
include a general summary in their case and rebuttal brief. Commerce 
proposes replacing that term with the term ``request'' and eliminating 
the reference to a general summary. The revised provision would request 
that parties supply a table of contents listing each issue; a table of 
authorities, include statutes, regulations, administrative cases, 
dispute panel decisions, and court holdings cited; and an executive 
summary for each argument raised in the brief. The change from 
``encouraged'' to ``request'' is intentional, as Commerce's ability to 
effectively administer that AD and CVD laws is improved when parties 
submit tables of contents, tables of authorities, and an executive 
summary for each argument raised in the brief.\101\ In addition, the 
inclusion of a table of contents is consistent with Commerce's 
practice, and the inclusion on the list of administrative cases and 
dispute panel decisions to be cited in a table of authorities is 
intended to provide additional clarity, as those sources are frequently 
cited in briefs and rebuttal briefs.
---------------------------------------------------------------------------

    \101\ For purposes of this Proposed Rule, Commerce is 
emphasizing that if interested parties fail to provide the succinct 
450-word public executive summaries, pursuant to this revised 
provision, Commerce may request that those parties resubmit their 
entire brief or rebuttal brief with an executive summary.
---------------------------------------------------------------------------

    Finally, Commerce has proposed removing from its list of requested 
(formerly encouraged) information the five-page summaries, for the 
reasons explained above. Commerce does not find that five-page 
summaries are generally helpful, although Commerce

[[Page 57305]]

will not prohibit the submission of such summaries if interested 
parties wish to continue to supply them.

14. Revising To Include Practice of Collapsing Affiliated Producers and 
Non-Producers--Sec.  351.401(f)

    When affiliated producers share ownership, management, or have 
intertwined operations, there is a significant potential for the 
manipulation of the prices or production of the subject merchandise. 
Commerce has a longstanding and court-affirmed practice of 
``collapsing'' certain affiliated entities and treating them as a 
single entity for purposes of its AD calculations.\102\ As currently 
written, Sec.  351.401(f)(1) codifies Commerce's practice of collapsing 
affiliated producers who ``have production facilities for similar or 
identical products that would not require substantial retooling of 
either facility in order to restructure manufacturing priorities'' 
where ``there is a significant potential for the manipulation of price 
or production.'' Section 351.401 (f)(2) identifies the factors Commerce 
may consider in determining whether there is significant potential for 
the manipulation of price or production.
---------------------------------------------------------------------------

    \102\ See Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Frozen and Canned Warmwater Shrimp from Brazil, 
69 FR 76910 (December 23, 2004), and accompanying IDM (Shrimp from 
Brazil IDM) at Comment 5; see also Rebar Trade Action Coalition v. 
United States, 398 F. Supp. 3d 1359, 1366-1371 (CIT 2019) (Rebar 
Trade Action Coalition); Queen's Flowers de Colombia v. United 
States, 981 F. Supp. 617, 622 (CIT 1997) (Queen's Flowers); and 
Viraj Group. v. United States, 476 F.3d 1349, 1355-58 (Fed. Cir. 
2007).
---------------------------------------------------------------------------

    By collapsing affiliated producers and calculating a single 
weighted-average dumping margin for the combined entity, the current 
regulation discourages producers subject to antidumping duties from 
shifting their production or sales to affiliated producers to evade 
those duties. \103\
---------------------------------------------------------------------------

    \103\ See Rebar Trade Action Coalition, 475 F. Supp. at 1368.
---------------------------------------------------------------------------

    However, affiliated non-producers such as exporters, importers, and 
producers can also manipulate and influence prices and costs through 
their mutual relationships.\104\ Accordingly, to prevent manipulation 
of the prices and costs used in its dumping analysis, and prevent the 
evasion of duties, Commerce has in several AD proceedings collapsed 
non-producers with both producers and non-producers, and the CIT has 
affirmed Commerce's authority to do so.\105\ Although the Act does not 
expressly address collapsing, the CIT has held that Commerce's 
collapsing practice, as applied to both affiliated producers and non-
producers, effectuates the basic purpose of the Act: to calculate 
accurate dumping margins and to prevent the evasion of duties.\106\
---------------------------------------------------------------------------

    \104\ See Shrimp from Brazil IDM at Comment 5.
    \105\ See NACCO Materials Handling Group, Inc. v. United States, 
971 F. Supp. 586, 591-92 (CIT 1997) (NAACO Materials); Queen's 
Flowers, 981 F. Supp. at 617-622; and Echjay Forgings, 475 F. Supp. 
3d. at 1360 (CIT 2020) (citing Hontex Enterprises Inc. d/b/a 
Louisiana Packing Company v. United States of America, 248 F. Supp. 
2d. 1323 (CIT 2003)).
    \106\ See Queen's Flowers, 981 F. Supp. at 622.
---------------------------------------------------------------------------

    As such, Commerce proposes revising Sec.  351.401(f) to explicitly 
address the ability of the agency to collapse producers and non-
producers when it determines that there is a significant potential for 
the manipulation of prices or production between two or more affiliated 
parties.\107\
---------------------------------------------------------------------------

    \107\ See United States Steel Corp. v. United States, 179 F. 
Supp. 3d 1114, 1135 (CIT 2016).
---------------------------------------------------------------------------

    In practice, Commerce has found the (f)(2) factors in the current 
regulation instructive in determining whether to collapse non-producer 
affiliated parties. For example, applying the factors of Sec.  
351.401(f) relevant to non-producers, Commerce has collapsed producers 
with affiliated resellers and exporters.\108\ Accordingly, Commerce 
proposes modifying Sec.  351.401(f) to reflect Commerce's longstanding 
practice of collapsing affiliated parties, rather than only affiliated 
producers, by changing references to ``affiliated producers'' to 
``affiliated parties.'' Further, Commerce proposes moving discussion of 
whether affiliated parties have or will have access to production 
facilities for similar or identical products from paragraph (f)(1) to a 
newly created paragraph (f)(3). If applicable, paragraph (f)(3) would 
require Commerce to consider if any of those facilities would require 
substantial retooling in order to restructure manufacturing priorities. 
This modification would ensure that Sec.  351.401(f) centers Commerce's 
collapsing analysis on whether there is a significant potential for 
manipulation of prices, production, or other commercial activities--a 
factor relevant to producers and non-producers alike.\109\ Finally, 
paragraph (f)(2), with a few minor modifications, would continue to 
describe the factors Commerce may consider in determining whether there 
is a significant potential for manipulation.
---------------------------------------------------------------------------

    \108\ See Shrimp from Brazil IDM at Comment 5; see also Certain 
Welded Carbon Steel Standard Pipes and Tubes from India: Preliminary 
Results of Antidumping Duty Administrative Review, 75 FR 33578, 
33580-33581 (June 14, 2010), unchanged in Certain Welded Carbon 
Steel Standard Pipes and Tubes from India: Final Results of 
Antidumping Duty Administrative Review, 75 FR 69626 (November 15, 
2010); and Certain Preserved Mushrooms from the People's Republic of 
China: Final Results and Final Rescission, in Part, of Antidumping 
Duty Administrative Review, 70 FR 54361 (September 14, 2005), and 
accompanying IDM at Comment 9.
    \109\ See Shrimp from Brazil IDM at Comment 5; see also Rebar 
Trade Action Coalition, 475 F. Supp. at 1367.
---------------------------------------------------------------------------

15. Addressing the Submission of Multinational Corporation Provision 
Allegations and Clarification That the Provision Does Not Apply to 
Nonmarket Economy Countries--Sec.  351.404(g)

    Section 773(d) of the Act enumerates the factors necessary for 
Commerce to determine whether to apply the special rule for certain 
multinational corporations in determining normal value for purposes of 
its AD calculations. Current Sec.  351.301(c) sets forth the time 
limits for submissions of various allegations, arguments, and factual 
information relevant to that determination, but it does not refer to 
allegations that the special rule for certain multinational 
corporations should be applied given the facts on the record. In the 
past, Commerce has articulated in its communications to outside parties 
that the deadlines of Sec.  351.301(c)(2)(i) should apply to such 
allegations,\110\ and Commerce is proposing to codify that 
understanding in new Sec.  351.404(g)(1).
---------------------------------------------------------------------------

    \110\ See Commerce's Letter, ``Multinational Corporation 
Provision,'' dated April 9, 2021 (ACCESS barcode: 4108533-01) at 2 
n. 9 (stating ``Commerce intends to clarify in its initiation 
notices for subsequent proceedings that the applicable deadline for 
all interested parties to file an MNC allegation is established by 
19 CFR 351.301(c)(2)(i).'').
---------------------------------------------------------------------------

    Under section 773(d) of the Act, the special rule for certain 
multinational corporations requires a determination concerning market 
viability and the basis for determining normal value. Current Sec.  
351.301(c)(2)(i) provides interested parties the deadline for 
submitting allegations regarding market viability in an antidumping 
investigation or administrative review. Proposed Sec.  351.404(g)(1) 
would instruct interested parties to file multinational corporation 
provision allegations in accordance with the filing requirements set 
forth in Sec.  351.301(c)(2)(i).
    In addition, Commerce has previously determined that the special 
rule for certain multinational corporations does not apply when the 
non-exporting country at issue is a nonmarket economy \111\ and, thus, 
normal value is

[[Page 57306]]

determined using a factors of production methodology in accordance with 
773(c) of the Act.\112\ This is because section 773(d)(2) of the Act 
requires that section 773(a)(1)(C) of the Act apply in order for 
Commerce to use the statutory factors to determine whether to apply the 
special rule for certain multinational corporations, and section 
773(a)(1)(C) provides that Commerce will determine normal value using 
third country sales and not the factors of production methodology 
statutorily required for nonmarket economies. The Federal Circuit, in 
Ad Hoc Shrimp Trade Comm, affirmed Commerce's interpretation of section 
773(d)(2) of the Act as reasonable and in accordance with law.\113\
---------------------------------------------------------------------------

    \111\ See, e.g., Certain Frozen Warmwater Shrimp from Thailand: 
Final Results and Final Partial Rescission of Antidumping Duty 
Administrative Review, 72 FR 52065 (September 12, 2007) and 
accompanying IDM (Shrimp from Thailand IDM) at 37 (stating ``the 
legislative history suggests that Congress was primarily concerned 
with situations where the home market was not viable and yet a 
respondent's low priced exports to the United States market was 
supported by higher priced sales of its affiliate in a third country 
market. This legislative concern, however, does not appear to 
encompass respondents from {nonmarket economy{time}  countries. In 
{nonmarket economy{time}  cases, the Department disregards home 
market prices and the respondent's cost of production and calculates 
{normal value{time}  on the reported factors of production.'' 
(internal citations omitted)); see also Certain Frozen Warmwater 
Shrimp from the People's Republic of China: Notice of Final Results 
and Rescission, in Part, of 2004/2006 Antidumping Duty 
Administrative and New Shipper Reviews, 72 FR 52049 (September 12, 
2007), and accompanying IDM at Comment 12.
    \112\ In nonmarket economy cases, when there is ``likely price 
distortion due to state involvement'' and sales of merchandise do 
not reflect their fair value, Commerce is unable to determine normal 
value and must instead rely on a factors of production methodology 
in accordance with 773(c) of the Act. See Ad Hoc Shrimp Trade Action 
Comm. v. United States, 596 F.3d 1365, 1369-71 (Fed. Cir. 2010) (Ad 
Hoc Shrimp Trade Comm.).
    \113\ See Ad Hoc Shrimp Trade Comm. 596 F.3d at 1369-73.
---------------------------------------------------------------------------

    Thus, consistent with Commerce's interpretation of the Act, as 
affirmed by the Federal Circuit, Commerce is proposing new Sec.  
351.404(g)(2) which would state clearly that the special rule for 
multinational corporations will not apply where the non-exporting 
country at issue is a nonmarket economy country and normal value is 
determined using a factors of production methodology.
    Commerce believes that these two additions to the regulations will 
provide greater detail to the public with respect to the submission of 
allegations to which the special rule for multinational corporations 
would apply, as well as the application of the special rule itself.

16. Providing Criteria for Determining a Profit Rate Under the 
Constructed Value Profit Cap--Sec.  405(a) and (b)(3)

    As set forth in Sec.  351.405(a), pursuant to section 773(e) of the 
Act in certain circumstances Commerce may determine normal value by 
constructing a value based on the cost of manufacturing; selling, 
general and administrative expenses; and profit. In constructing such a 
value, the Act provides that Commerce should use the ``actual amounts 
incurred and realized by the specific exporter or producer being 
examined in the investigation or review for selling, general, and 
administrative expenses, and for profits, in connection with the 
production and sale of a foreign like product, in the ordinary course 
of trade, for consumption in the foreign country.'' \114\ However, 
there are times when the ``actual data are not available with respect'' 
to those production and sale amounts, and in those circumstances, 
section 773(e)(2)(B) of the Act establishes three alternative methods 
for calculating amounts for selling, general, and administrative 
expenses, and profits, in connection with the production and sale of a 
foreign like product, in those instances.\115\ The Act provides 
Commerce with the discretion to select from any of the three 
alternative methods, depending on the information available on the 
record.\116\
---------------------------------------------------------------------------

    \114\ Section 773(e)(2)(A) of the Act.
    \115\ See SAA at 840 (``At the outset, it should be emphasized, 
consistent with the Antidumping Agreement, new section 773(e)(2)(B) 
does not establish a hierarchy or preference among these alternative 
methods. Further, no one approach is necessarily appropriate for use 
in all cases'').
    \116\ Certain Steel Nails from the Republic of Korea: Final 
Determination of Sales at Less Than Fair Value, 80 FR 28955 (May 20, 
2015) (Certain Steel Nails from Korea), and accompanying IDM at 
Comment 4.
---------------------------------------------------------------------------

    One of those three options, described in section 773(e)(2)(B)(iii) 
of the Act, allows Commerce to use amounts incurred and realized for 
selling, general, and administrative expenses, and for profits based on 
``any other reasonable method'' with one exception. The Act provides 
that ``the amount allowed for profit may not exceed the amount normally 
realized by exporters or producers'' other than the individually 
examined exporter or producer ``in connection with the sale, for 
consumption in the foreign country, of merchandise that is in the same 
general category of productions as the subject merchandise.''
    The SAA states that ``Commerce will develop this alternative 
through practice,'' \117\ and with respect to the ``profit cap'' 
exception set forth in this provision,\118\ Commerce has done just that 
for over two decades. It has been Commerce's practice in determining 
the amount of profit normally realized by exporters or producers in 
connection with the sale, for consumption in the foreign country, of 
merchandise that is in the general category as the subject merchandise 
for use in its constructed value calculations to consider four 
criteria: (1) the similarity of the potential surrogate companies' 
business operations and products to the respondent's business 
operations and products; (2) the extent to which the financial data of 
the surrogate company reflects sales in the home market and does not 
reflect sales to the United States; (3) the contemporaneity of the data 
to the period of investigation; and (4) the extent to which the 
customer base of the surrogate company and the respondent is 
similar.\119\
---------------------------------------------------------------------------

    \117\ SAA at 841.
    \118\ Id. (``The Administration also recognizes that where, due 
to the absence of data, Commerce cannot determine amounts for profit 
under alternatives (1) and (2) or a ``profit cap'' under alternative 
(3), it might have to apply alternative (3) on the basis of `facts 
available.' This ensures that Commerce can use the alternative (3) 
when it cannot calculate the profit normally realized by other 
companies on sales of the same general category of products.'').
    \119\ See Notice of Final Determination of Sales at Less Than 
Fair Value: Pure Magnesium from Israel, 66 FR 49349 (September 27, 
2001), and accompanying IDM at Comment 8; see also Notice of Final 
Determination of Sales at Not Less Than Fair Value: Certain Color 
Television Receivers from Malaysia, 69 FR 20592 (April 16, 2004), 
and accompanying IDM at Comment 26.
---------------------------------------------------------------------------

    In elaborating the relevancy of each criterion, Commerce has 
explained that the greater the similarity in business operations, 
products, and customer base, the more likely that there is a greater 
correlation in the profit experience of the two companies.\120\
---------------------------------------------------------------------------

    \120\ See Notice of Final Determination of Sales at Not Less 
Than Fair Value: Certain Color Television Receivers from Malaysia, 
69 FR 20592 (April 16, 2004), and accompanying IDM at Comment 26.
---------------------------------------------------------------------------

    Concerning the extent to which U.S. sales are reflected in the 
surrogate's financial statements, because Commerce is typically 
comparing U.S. sales to a normal value from the home market or third 
country, Commerce has explained that it does not want to construct a 
normal value based on financial data that contains exclusively or 
predominantly U.S. sales.\121\ Further, in accordance with section 
773(e)(2)(B) of the Act generally, Commerce has explained that it 
seeks, to the extent possible, home market profit experience.\122\
---------------------------------------------------------------------------

    \121\ Id.
    \122\ Id.
---------------------------------------------------------------------------

    Finally, with respect to the contemporaneity criteria, because 
markets change over time, Commerce has explained that the more current 
the data, the more reflective it believes that data would be of the 
market in which the respondent is operating.\123\
---------------------------------------------------------------------------

    \123\ Id.

---------------------------------------------------------------------------

[[Page 57307]]

    Commerce has considered those criteria in selecting the appropriate 
financial statements to determine constructed value profit under 
section 773(e)(2)(B)(iii) of the Act for many years.\124\ Moreover, the 
Federal Circuit, in Mid Continent Steel & Wire Inc., affirmed 
Commerce's framework, based on those four criteria, as a reasonable 
interpretation of section 773(e)(2)(B)(iii) of the Act.\125\
---------------------------------------------------------------------------

    \124\ See, e.g., Certain Oil Country Tubular Goods from the 
Republic of Korean; Final Determination of Sales at Less Than Fair 
Value and Negative Final Determination of Critical Circumstances, 79 
FR 41983 (July 18, 2014), and accompany IDM at Comment 1.
    \125\ Mid Continent Steel & Wire, Inc. v. United States, 941 
F.3d 530, 542-43 (Fed. Cir. 2019) (concluding that Commerce's 
analysis applying the four-part framework was a reasonable 
interpretation of the statute).
---------------------------------------------------------------------------

    Accordingly, Commerce has determined that the public and the agency 
alike would benefit through the codification of this practice in its 
regulations. Therefore, Commerce is proposing a change to the last 
sentence of Sec.  351.405(a) to indicate that the information that 
Commerce will consider in determining a constructed value and the 
addition of a new paragraph (3) to Sec.  351.405(b), which would apply 
to determinations of ``profit and selling, general and administrative 
expenses'' to reflect the four criteria described above in selecting a 
value for CV profit under the ``profit cap'' exception set forth in 
section 773(e)(2)(B)(iii) of the Act.

17. Revising Criteria for Determining Economic Comparability in 
Calculating Normal Value From Nonmarket Economy Countries--Sec.  
351.408(b)

    Section 773(c)(2)(B) of the Act states that when Commerce is 
conducting an antidumping analysis of a nonmarket economy country, it 
will include consideration of the price of merchandise ``produced in 
one or more market economy countries that are at a level of economic 
development comparable to that of a nonmarket economy country.'' 
Furthermore, section 773(c)(4)(A) of the Act states that in valuing 
factors of production for a nonmarket economy country analysis, 
Commerce shall utilize, to the extent possible, ``the prices or costs 
of factors of production in one or more market economy countries that 
are--(A) at a level of economic development comparable to that of a 
nonmarket economy country.''
    Current Sec.  351.408(b) states that in determining whether a 
country is at a level of economic development comparable to the 
nonmarket economy under sections 773(c)(2)(B) and 773(c)(4)(A) of the 
Act, Commerce will ``place primary emphasis on per capita GDP as the 
measure of economic comparability.'' However, Commerce's general 
practice has been to use per capita GNI instead of per capita GDP as 
the measure of economic comparability \126\ because ``while the two 
measures are very similar, per capita GNI is reported across almost all 
countries by an authoritative source (the World Bank).'' \127\ 
Commerce's use of GNI has been recognized and affirmed as reasonable by 
the CIT as a measure to determine economic comparability in multiple 
holdings.\128\
---------------------------------------------------------------------------

    \126\ See Antidumping Methodologies in Proceedings Involving 
Nonmarket Economy Countries: Surrogate Country Selection and 
Separate Rates; Request for Comment, 72 FR 13246, 13246 n.2 (Mar. 
21, 2007) (Surrogate Country Notice).
    \127\ Id.
    \128\ See, e.g., Clearon Corp v. United States, 38 CIT 1122, 
1137-1140 (CIT July 24, 2014); see also Tri Union Frozen Prods. v. 
United States, 163 F. Supp. 3d. 1255, 1268, n. 8 (CIT 2016); and 
Tianjin Wanhua Co. v. United States, 253 F. Supp. 3d. 1318, 1322 
(CIT 2017).
---------------------------------------------------------------------------

    Commerce is now proposing to update Sec.  351.408(b) to reflect 
that Commerce may consider either GNI or GDP in selecting potential 
surrogate countries. Per capita GNI measures the total income earned by 
the residents of a country, whether from domestic or foreign sources, 
divided by the average population of that country. Per capita GDP, on 
the other hand, measures the total value of goods and services produced 
within a country per person in a given year. This calculation provides 
insights into overall economic output and living standards of a 
population. Higher per capita GDP suggests a greater share of economic 
output available for each citizen, which can translate into improved 
living standards. GDP remains a widely recognized measure for assessing 
a population's economic well-being and quality of life.\129\
---------------------------------------------------------------------------

    \129\ For examples using per capita GDP, see World Economic 
Outlook: Navigating Global Divergences (October 2023), International 
Monetary Fund (World Economic Outlook October 2023), available at 
https://www.imf.org/en/Publications/WEO/Issues/2023/10/10/world-economic-outlook-october-2023; World Development Indicators, World 
Bank, available at https://databank.worldbank.org/indicator/NY.GDP.PCAP.CD/1ff4a498/Popular-Indicators#; GDP per capita, 
purchasing power parity (current international $)--OECD members, 
World Bank (GDP per capita OECD member data), available at https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=OE.
---------------------------------------------------------------------------

    There are potential benefits to the use of either per capita GNI or 
per capita GDP. The use of per capita GNI as an aggregate economic 
indicator might be appropriate in some cases for the reasons explained 
in the Surrogate Country Notice. However, there may be other situations 
in which the use of per capita GDP might be a better measure of 
economic comparability. Accordingly, Commerce is proposing a 
modification to Sec.  351.408(b) which allows the agency to place 
primary emphasis on either per capita GDP or per capita GNI since both 
options can be reasonably used to determine comparable economies, 
depending on the facts before the agency.
    In addition, Commerce proposes that Sec.  351.408(b) be further 
amended to allow Commerce to consider additional factors that relate to 
economic comparability: (1) the overall size and composition of 
economic activity in those countries, as measured by either GDP or GNI; 
(2) the composition and quantity of exports from those countries; (3) 
the availability, accessibility, and quality of data from those 
countries; and (4) additional factors which Commerce determines are 
appropriate to consider in light of unique factors and circumstances. 
Consideration of such examples may assist the agency in evaluating the 
economic similarities and differences between countries.
    With respect to the first factor, Commerce believes that reviewing 
a country's overall size and composition of economic activity could 
reveal not only what a country produces and exports but might also 
provide a deeper understanding of its fundamental economic structure, 
development phase, and role in the global economy.\130\
---------------------------------------------------------------------------

    \130\ See Paul Krugman & Maurice Obstfeld, International 
Economics: Theory and Policy (5th ed. 2000), at 12-13, 66 (Ricardian 
model and Heckscher-Ohlin model showing the relationship between 
economic comparability and export patterns).
---------------------------------------------------------------------------

    With respect to countries' export compositions and quantities, such 
information could help Commerce identify economies with similar levels 
of development and industrial structures, as countries with similar 
types and quantities of exports will more likely than not be at a 
comparable economic level of development.\131\ As such, consideration 
of such information might help Commerce provide comparisons that are 
most grounded in economic reality and enhance the chances that the 
selected surrogate countries possess similar underlying economic 
structures.
---------------------------------------------------------------------------

    \131\ See id. at 31, Table 2 (citing 2013 International Trade 
Statistics, U.N.Y.B. ST/ESA/STAT/SER.G/62 vol. 1 (New York: United 
Nations, 2014), available at https://www.un-ilibrary.org/content/books/9789210566988/read).
---------------------------------------------------------------------------

    Commerce has also proposed to include the availability, 
accessibility, and quality of data from potential surrogate countries 
as a factor to

[[Page 57308]]

consider because it is Commerce's experience that sometimes the best 
sources of surrogate values for Commerce to use in its calculations are 
those from countries where data are easily available, accessible and of 
good quality.
    Lastly, Commerce proposes that it consider additional economic 
factors as appropriate in light of unique circumstances. Such factors 
could include indicators such as purchasing power parity to account for 
differences in spending power between countries.\132\ Other examples 
include regional indicators that would allow Commerce, when reasonable, 
to select a surrogate country or countries that are in the same 
geographic region as the nonmarket economy country or that are not 
going through temporary hyperinflationary periods. Consideration of 
these factors would assist Commerce in selecting appropriate surrogate 
countries when economy-wide or sector specific prices may be 
contributing to distorting economic conditions.
---------------------------------------------------------------------------

    \132\ Notably, both the World Bank and IMF use the per capita 
GDP purchasing power parity in some of their economic analyses. See 
GDP per capita OECD member data, and World Economic Outlook October 
2023.
---------------------------------------------------------------------------

18. Removing the Integral Linkage Specificity Provision, the 
Agricultural Exception to Specificity Rule and the Small- and Medium-
Sized Businesses Exception to Specificity Rule--Sec.  351.502(d), (e) 
and (f). Revising and Moving the Disaster Relief Exception to 
Specificity Rule and Creating an Employment Assistance Programs 
Exception to Specificity Rule--Sec.  351.502(d) and (e)

    In order for Commerce to find benefits provided by a particular 
program to be countervailable, the program must provide benefits that 
are legally specific, that is, not broadly available or widely used but 
narrowly focused and used by discrete segments of an economy. Commerce 
is proposing multiple changes to its specificity regulation, Sec.  
351.502. First, the agency proposes to delete the integral linkage 
provision found at current Sec.  351.502(d) pursuant to which Commerce 
may examine whether an investigated subsidy program is specific under 
section 771(5A)(D) of the Act by expanding its specificity analysis to 
programs other than the investigated subsidy program if the 
investigated subsidy program is ``integrally linked'' to other subsidy 
programs. The concept of integral linkage contained in Sec.  351.502(d) 
was a discretionary practice of Commerce at the time of its 
codification. There was, and is, no statutory requirement to expand the 
analysis of specificity under section 771(5A)(D) of the Act beyond the 
investigated subsidy program. Since Sec.  351.502(d) was put into 
place, respondents have rarely invoked the integral linkage provision, 
and Commerce has rarely found two or more subsidy programs to be 
integrally linked.\133\ For these reasons, Commerce proposes deleting 
the integral linkage provision found at current Sec.  351.502(d).
---------------------------------------------------------------------------

    \133\ See, e.g., Countervailing Duties; Final Rule, 63 FR 65348, 
65357 (November 25, 1998) (1998 Preamble); see also the Preamble to 
Countervailing Duties: Notice of Proposed Rulemaking and Request for 
Public Comments, 54 FR 23366, 23368 (May 31, 1989). The 1989 
Proposed Rules were never finalized.
---------------------------------------------------------------------------

    Second, Commerce proposes to delete the agricultural exception 
found at current Sec.  351.502(e) in order to ensure consistency with 
the specificity test set forth in the SAA.\134\ Section 351.502(e) 
currently provides that Commerce will not regard a domestic subsidy as 
being specific under section 771(5A)(D) of the Act solely because the 
subsidy is limited to the agricultural sector. When current paragraph 
(e) was issued, Commerce explained that this exception for generally 
available agricultural subsidies was consistent with prior practice and 
that Commerce would find an agricultural subsidy to be countervailable 
only if it were specific within the agricultural sector, e.g., a 
subsidy limited to livestock or livestock receive disproportionately 
large amounts of the subsidy.\135\
---------------------------------------------------------------------------

    \134\ See SAA at 911-955.
    \135\ See 1998 Preamble, 63 FR at 65357-65358.
---------------------------------------------------------------------------

    This regulation was based on Commerce's decisions in several cases 
during the 1980s, including Asparagus from Mexico,\136\ Fresh Cut Roses 
from Israel,\137\ and Certain Fresh Cut Flowers from Mexico.\138\ In 
Asparagus from Mexico, Commerce determined that the provision of water 
to agricultural producers was not countervailable, explaining: 
``{p{time} referential rates are not provided to the producers of any 
one agricultural product'' and ``{w{time} e do not consider the 
provision of water at a uniform rate to all agricultural producers in 
this region to be a benefit, which would constitute a bounty or grant, 
because Commerce considers the agricultural sector to constitute more 
than a single group of industries within the meaning of the Act.'' 
\139\ Commerce cited this finding in support of its determination that 
benefits from government-funded agricultural extension services were 
not countervailable in Fresh Cut Roses from Israel.\140\ This practice 
of considering the agricultural sector to constitute more than a 
specific industry or group of industries was reaffirmed again in 
Certain Fresh Cut Flowers from Mexico, when Commerce determined that 
loans provided under a government-sponsored loan program known as the 
Funds Established with Relationship to Agricultural (FIRA) program were 
not countervailable because they were provided to the agricultural 
sector as a whole and thus not specific.\141\ Specifically, Commerce 
elaborated that: ``Producers of a wide variety of products including 
fruits and vegetables, livestock, grains, meat products, milk, and eggs 
are eligible for FIRA financing. Producers of agricultural tools may 
also receive financing under FIRA. FIRA loans are also provided to the 
fishing and the forestry industries.'' \142\ Commerce also pointed out 
that ``{a{time} pproximately one-third of Mexico's labor force is 
employed in agriculture. The FIRA program is generally available to, 
and used by, wide ranging and diverse industries that constitute a 
substantial portion of the Mexican economy.'' \143\
---------------------------------------------------------------------------

    \136\ See Final Negative Countervailing Duty Determination: 
Fresh Asparagus from Mexico, 48 FR 21618, 21621 (May 13, 1983) 
(Asparagus from Mexico).
    \137\ See Fresh Cut Roses from Israel: Final Results of 
Administrative Review of Countervailing Duty Order, 48 FR 36635, 
36636 (August 12, 1983) (Fresh Cut Roses from Israel).
    \138\ See Certain Fresh Cut Flowers from Mexico, 49 FR 15007, 
15008 (April 16, 1984) (Certain Fresh Cut Flowers from Mexico).
    \139\ See Asparagus from Mexico, 48 FR at 21621.
    \140\ See Fresh Cut Roses from Israel, 48 FR at 36636.
    \141\ See Certain Fresh Cut Flowers from Mexico, 49 FR at 15008.
    \142\ Id.
    \143\ Id.
---------------------------------------------------------------------------

    Commerce's conclusion in this regard on the application of the CVD 
law to loans provided to the agricultural sector as a whole was upheld 
by the CIT in Roses Inc. v. United States, where the Court held that 
``Commerce's determination that a group composed of all of agriculture, 
that is, whatever is not services or manufacturing, is not within the 
meaning of the statutory words `industry or group of industries' is a 
reasonable interpretation of the statute.'' \144\
---------------------------------------------------------------------------

    \144\ See Roses Inc. v. United States, 774 F Supp. 1376, 1383-
1384 (CIT 1991).
---------------------------------------------------------------------------

    Therefore, this regulation codified Commerce's practice at the time 
as affirmed in the courts and informed by the global economic 
circumstances of the time--namely, that agriculture accounted for a 
significant part of many countries' economies and employed sizable 
portions of the labor force such that the sector as a whole could not 
be considered a discrete segment of the

[[Page 57309]]

economy for specificity purposes. However, those economic circumstances 
have changed in the forty years since the development of that practice.
    The agricultural sector's share of economic output and employment 
has steadily decreased in recent decades, especially as technology has 
advanced and many countries have prioritized diversifying their 
economies in furtherance of economic development goals.\145\ These 
broad global economic trends are reflected in data collected and 
published by international organizations. For example, World Bank data 
indicate that world employment in agriculture as a percentage of total 
employment decreased from over 43 percent in 1991 (the first year for 
which data are available) to just over 26 percent in 2021.\146\ 
Commerce specifically highlighted the level of agricultural employment 
in Certain Fresh Cut Flowers from Mexico, noting that one-third of 
Mexico's labor force was employed in agriculture.\147\ World Bank data 
also indicate that agriculture's share of total employment in Mexico 
fell from nearly 26 percent in 1991 to just over 12 percent in 
2021.\148\ Decreases of similar magnitude during the same period can be 
seen in broad ``Middle income,'' ``Least developed countries,'' and 
``Low and middle income'' categories, as well as specifically in large 
economies such as China and India that Commerce examines often in CVD 
proceedings.\149\ Similarly, World Bank data show that the value added 
of the agriculture, forestry, and fishing sectors as a percentage of 
GDP has steadily decreased since 1980, both in terms of broad 
categories (e.g., ``middle income countries'') and with respect to 
large economies such as China and India.\150\
---------------------------------------------------------------------------

    \145\ See, e.g., Anderson, K., Globalization's effects on world 
agricultural trade, 1960-2050, Philosophical Transactions of The 
Royal Society B (2010), No. 365, at 3007-08, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2935114/pdf/rstb20100131.pdf; 
see also Felipe, J., Dacuycuy, C., et. al., The Declining Share of 
Agricultural Employment in the People's Republic of China: How 
Fast?, Asian Development Bank (ADB) Economics Working Paper Series 
(2014), No. 419, at 3, available at https://www.adb.org/sites/default/files/publication/149676/ewp-419.pdf; and Cervantes-Godoy, 
D.), Aligning Agricultural and Rural Development Policies in the 
Context of Structural Change, OECD Food, Agriculture and Fisheries 
Paper (2022), No. 187, at 5, available at https://www.oecd-ilibrary.org/agriculture-and-food/aligning-agricultural-and-rural-development-policies-in-the-context-of-structural-change_1499398c-en;jsessionid=Vou3tl4a5mF09Msb_WUGWqSvi31NVlWRFqgFePau.ip-10-240-5-
115; Gale Johnson, D., Agricultural economics, Encyclopedia 
Britannica (2023), available at https://www.britannica.com/money/agricultural-economics.
    \146\ See Employment in agriculture (% of total employment) 
(modeled ILO estimate), World Bank, available at https://data.worldbank.org/indicator/SL.AGR.EMPL.ZS?view=chart (Employment 
in agriculture).
    \147\ See Certain Fresh Cut Flowers from Mexico, 49 FR at 15008.
    \148\ See Employment in agriculture.
    \149\ Id.
    \150\ See Agriculture, forestry, and fishing, value added (% of 
GDP), World Bank, available at https://data.worldbank.org/indicator/NV.AGR.TOTL.ZS?most_recent_year_desc=true&view=chart.
---------------------------------------------------------------------------

    In reexamining the impetus for the agricultural exception within 
the context of the original purpose of the specificity test, and in 
light of changing economic circumstances around the world, we find that 
the exception is no longer valid. The SAA states that the 
``Administration intends to apply the specificity test in light of its 
original purpose, which is to function as an initial screening 
mechanism to winnow out only those foreign subsidies which truly are 
broadly available and widely used throughout an economy'' and that 
``the specificity test was not intended to function as a loophole 
through which narrowly focused subsidies provided to or used by 
discrete segments of an economy could escape the purview of the CVD 
law.'' \151\ Given the declining share of countries' economies 
accounted for by the agricultural sector, both in terms of GDP and 
employment, it is no longer the general rule that subsidies provided 
solely to the agricultural sector are ``broadly available . . . 
throughout an economy.'' \152\ Rather, in many cases and in many 
countries, the agricultural sector may comprise a small and shrinking 
segment of the economy, and in light of the original purpose of the 
specificity test, subsidies to such discrete segments in that economy 
should not be exempt from the remedies provided by the CVD law.
---------------------------------------------------------------------------

    \151\ See SAA at 929.
    \152\ Id.
---------------------------------------------------------------------------

    Commerce has reconsidered whether a broad and far-reaching 
exception for agricultural subsidies is consistent with the language on 
specificity explicitly set forth in the SAA. Moreover, a blanket 
specificity exception provided to agricultural subsidy programs denotes 
a conclusion by Commerce that every country that is subject to a CVD 
investigation has an identical or similar economy with respect to the 
role played by agriculture within the economy. Such a conclusion is in 
potential conflict with the specificity test in the SAA and the 
statutory language of section 771(5A)(D) of the Act, which requires 
that Commerce analyze specificity based upon ``the jurisdiction of the 
authority providing the subsidy.'' Therefore, to ensure that Commerce's 
regulations remain consistent with CVD law and are properly adapting to 
changing economic realities, Commerce proposes removing the exception 
to the specificity rule for agricultural subsidies.
    The proposed elimination of the agriculture exception to 
specificity does not mean that Commerce will always find agricultural 
subsidies to be specific; rather, under this proposal our analysis of 
whether an agricultural subsidy is specific would be conducted on a 
case-by-case basis based on a comprehensive examination of the 
specificity criteria enacted under section 771(5A)(D) of the Act within 
the framework of the specificity test set forth in the SAA.
    Third, Commerce proposes to delete the small- and medium-sized 
business exception to the specificity rule found at current Sec.  
351.502(f), which provides that Commerce ``will not regard a subsidy as 
being specific under section 771(5A)(D) of the Act solely because the 
subsidy is limited to small firms or small- or medium-sized firms 
(SMEs).'' The specificity test discussed in the SAA indicates that 
Commerce will find not specific only those subsidy programs ``which 
truly are broadly available and widely used throughout an economy.'' 
Therefore, Commerce proposes eliminating the specificity exception 
provided to SMEs under Sec.  351.502(f) to ensure that there is no 
conflict between our regulations and the SAA.
    A blanket specificity exception provided to SME subsidy programs 
denotes a conclusion by Commerce that every country that is subject to 
a CVD investigation has an identical or similar economy with respect to 
the role played by SMEs. Such a conclusion is in potential conflict 
with the SAA and the language of section 771(5A)(D) of the Act, which 
requires that Commerce analyze specificity based upon the 
``jurisdiction of the authority providing the subsidy'' and makes clear 
that specificity can be found when a subsidy is limited to any 
``group'' of enterprises or industries. Accordingly, Commerce has 
determined that it is appropriate to delete current Sec.  351.502(f), 
as the specificity of SME subsidy programs should be determined on a 
case-by-case basis, pursuant to the language of the SAA and section 
771(5A)(D) of the Act.
    Fourth, Commerce proposes to update the disaster relief exception 
to the specificity rule and move it from Sec.  351.502(g) to Sec.  
351.502(d). The current disaster relief regulation states that Commerce 
will not regard disaster relief as being specific under section 
771(5A)(D) of the Act if such relief constitutes general assistance 
available to anyone in the area affected by the

[[Page 57310]]

disaster. With the onset of the global Covid-19 pandemic, Commerce 
encountered certain government programs that provided Covid-19 relief 
to individuals and enterprises affected by the pandemic. Where the 
assistance was generally available to any individual or enterprise in 
the area affected by the pandemic, Commerce found the assistance to be 
not specific.
    It is unclear under the current language of the disaster relief 
specificity exception whether the definition of ``disaster relief'' 
includes relief provided during a pandemic. Commerce's practice of 
finding pandemic relief (if available to any individual or enterprise 
in the affected area) not countervailable because the relief was 
determined to be not specific under section 771(5A)(D) of the Act has 
not been controversial. However, Commerce proposes a modification to 
the regulatory language to specify that Commerce would not regard 
disaster relief, including pandemic relief, as being specific under 
section 771(5A)(D) of the Act if such relief constitutes general 
assistance available to any individual or enterprise in the area 
affected by the disaster. This exception to specificity provided to 
disaster relief, including pandemic relief, would not apply when this 
relief is limited on an industry or enterprise basis because the relief 
would not be available to any individual or enterprise in the area 
affected by the disaster.
    With the proposed elimination of the integral linkage specificity 
provision and specificity exemptions granted to agricultural subsidies 
and to subsidies to small- and medium-sized businesses, the amended 
disaster relief provision at Sec.  351.502(g) would become Sec.  
351.502(d).
    Fifth, and finally, Commerce proposes to create a new employment 
assistance program exception to the specificity rule at Sec.  
351.502(e). Under Commerce's current practice, the agency does not 
generally find employment assistance programs that are created to 
promote the employment of certain classes or categories of workers or 
individuals to be specific.\153\ Under this proposal, Commerce would 
regard employment assistance programs as being not specific under 
section 771(5A)(D) of the Act if such assistance is provided solely 
with respect to employment of general categories of workers, such as 
those based on age, gender, disability, veteran, and unemployment 
status, and is available to any individual with one or more of these 
characteristics without any industry restrictions.
---------------------------------------------------------------------------

    \153\ See, e.g., Certain Steel Nails from Korea the Republic of 
Korea: Final Negative Countervailing Duty Determination, 80 FR 
289966 (May 20, 2015) and accompanying IDM at 13.
---------------------------------------------------------------------------

    In examining the specificity of these types of employment 
assistance programs, similar to unemployment programs, programs that 
focus on the general employment of certain classes of individuals 
without industry-based restrictions would not be specific within the 
meaning of section 771(5A)(D) of the Act.
    However, job creation or retention programs that provide incentives 
to certain enterprises or industries, such as those implemented to 
attract new firms or industries or to provide incentives for firms to 
expand, would not fall within this exception. Similarly, any employment 
program related to the hiring of employees with specific job skills 
such as high-tech or engineering skills would also not fall within this 
exception. Rather, such programs would be determined on a case-by-case 
basis, pursuant to the language of the SAA and section 771(5A)(D) of 
the Act.

19. Modifying the Benefit Regulation To Include General Treatment of 
Contingent Liabilities and Assets--Sec.  351.503(b)(3)

    Commerce is proposing to add a new paragraph to the benefit 
regulation at Sec.  351.503(b)(3) to provide rules for the general 
treatment of contingent liabilities and assets that are not otherwise 
addressed in the regulations. Under current Sec.  351.505(d), in the 
case of an interest-free loan for which the repayment obligation is 
contingent upon the company taking some future action or achieving some 
goal in fulfillment of the terms of the loan, Commerce normally treats 
the outstanding balance of the loan as an interest-free short-term 
loan.
    However, other types of contingencies exist which are not 
explicitly referenced in this loan regulation. Commerce has encountered 
hybrid programs which have elements of two or more types of financial 
contributions, and, thus, two or more types of benefits. For example, 
in India, a program provides for import duty waivers contingent upon 
future export performance of the recipient.\154\ With respect to Korea, 
Commerce has investigated a research and development (R&D) grant 
program in which participating companies are required to repay 40 
percent of the R&D grant if the R&D project is deemed by the government 
to be successful.\155\ In these cases, Commerce treated the outstanding 
contingent liability of the import duty exemptions in India and the R&D 
grant in Korea as contingent liability interest-free loans within the 
meaning of Sec.  351.505(d). In addition, under Sec.  351.510, which 
covers direct and indirect taxes and import charges, the benefit from 
the deferral of indirect taxes and import charges when the final waiver 
of such taxes and charges is contingent on fulfillment of other 
criteria such as realizing an amount of export earnings is also 
calculated using the methodology described under Sec.  351.505(d).
---------------------------------------------------------------------------

    \154\ See, e.g., Certain Hot-Rolled Carbon Steel Flat Products 
from India: Final Results of Countervailing Duty Administrative 
Review, 73 FR 40295 (July 14, 2008), and accompanying IDM at Comment 
42 (discussing the Export Promotion Capital Goods Scheme (EPCGS)).
    \155\ See, e.g., Corrosion-Resistant Carbon Steel Flat Products 
from the Republic of Korea: Final Results of Countervailing Duty 
Administrative Review, 76 FR 3613 (January 20, 2011), and 
accompanying IDM at 2-3 (discussing the Act on Special Measures for 
the Promotion of Specialized Enterprises for Parts and Materials).
---------------------------------------------------------------------------

    While the treatment of these contingent import duty exemptions and 
R&D grants under Sec.  351.505(d) has never been a source of 
controversy, for purposes of clarity and flexibility the agency is 
proposing a separate paragraph under the benefit regulation to 
specifically provide for the treatment of contingent liabilities and 
assets that are not otherwise addressed in the regulations. As Commerce 
encounters ever more complicated government programs, the goal is to 
have a regulation that provides for the specific treatment of 
contingent liabilities to ensure that there is no question that any 
government program that incorporates a contingent element falls within 
the purview of the CVD law and Commerce's regulations.
    Commerce has also incorporated the element of contingent assets 
into this proposal to ensure that a contingent asset that is provided 
by a government, and which has not been measured under the other rules 
within our CVD regulations, can be addressed within this benefit 
section of the CVD regulations. Therefore, for either the provision of 
a contingent liability or asset, the agency would treat the balance or 
value of the contingent liability or asset as an interest-free 
provision of funds and would calculate the benefit using a short-term 
commercial interest rate.

[[Page 57311]]

20. Creating an Initiation Standard for Specificity Allegations 
Regarding Government Policy Banks; Addressing the Time of Receipt of 
Benefit and Allocation of Loan Benefit to a Particular Time Period; 
Modifying a Provision Regarding Contingent Liability Interest-Free 
Loans--Sec.  351.505(a)(6)(iii), (b), (c), and (e)

    Section 351.505 applies to the procedures and policies pertaining 
to loans under the CVD law. Commerce proposes to make modifications to 
Sec. Sec.  351.505(b), (c), and (e) and add new Sec.  
351.505(a)(6)(iii).
    Section 351.505(a)(6)(ii) pertains to loans provided by government-
owned banks. Under this proposal, Commerce would add a paragraph (iii) 
to address the initiation standard for specificity allegations for 
loans provided by government-owned policy banks, special purpose banks 
established by governments. Under the proposed language in paragraph 
(iii), an interested party would meet the initiation threshold for 
specificity under subparagraph (ii)(A) of Commerce's current CVD 
regulations with respect to section 771(5A)(D) of the Act if the party 
could sufficiently allege that loan distribution information is not 
reasonably available and that the bank provides loans pursuant to 
government policies or directives.
    Commerce has found that information on the distribution of loans 
and data on the enterprises and industries that receive loans from 
government-owned policy banks is usually not published and, therefore, 
not reasonably available to U.S. petitioning industries. Thus, these 
interested parties are hindered in their ability to make a specificity 
allegation under section 771(5A)(D)(iii) of the Act due to lack of 
transparency of these government-owned entities. It has been our 
experience that government-owned policy banks are normally established 
by laws and regulations which discuss the purposes of the policy banks, 
and these laws and regulations are usually publicly available; and, 
thus, would be available to U.S. petitioning industries.
    The provision of, and access to, capital is a critical component to 
the growth and development of firms and industries. The control of the 
distribution or allocation of capital by the government has been shown 
to lead to a misallocation and distortion of resources within an 
economy.\156\ Fundamentally, a subsidy is a distortion of the market 
process for allocating an economy's resources and this principal is an 
underlying foundation of Commerce's entire CVD methodology.\157\
---------------------------------------------------------------------------

    \156\ See, e.g., Shleifer, A., State versus Private Ownership, 
National Bureau of Economic Research Working Paper 6665 at 19 (1998) 
available at https://www.nber.org/papers/w6665; Iannotta, G., 
Nocera, G., et. al., The Impact of Government Ownership on Bank 
Risk, J. Fin. Intermediation (2013), Vol. 22, Issue 2 at 152-176 
available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2233564; Gonzalez-Garcia, J. and Grigoli, F., 
State-Owned Banks and Fiscal Discipline, IMF Working Paper (2013), 
WP/13/206 at 3, available at https://www.imf.org/en/Publications/WP/Issues/2016/12/31/State-Owned-Banks-and-Fiscal-Discipline-40982; 
Sapienza, P., The Effects of Government Ownership on Bank Lending, 
J. of Fin. Economics (2004), Vol. 72, Issue 2, at 357-384; La Porta, 
R., Lopez-De-Silanes, F., et. al., Government Ownership of Banks, J. 
Finance (2002), Vol. 57, No 1, at 265-301; Levy Yeyati, E., Micco, 
A, et. al., Should the Government Be In The Banking Business? The 
Role of State-Owned and Development Banks, Inter-American 
Development Bank Working Paper #517 (2004) at 6, available at 
https://publications.iadb.org/en/publication/should-government-be-banking-business-role-state-owned-and-development-banks; Ijaz 
Khwaja, A., and Mian, A., Do Lenders Favor Politically Connected 
Firms? Rent Provision in an Emerging Financial Market, Q. J. 
Economics (2005), Vol. 120, Issue 4, at 1371-1411; Serdar Dinc, I., 
Politicians and Banks: Political Influences on Government-owned 
Banks in Emerging Markets, J. Fin. Economics (2005), at 453-479; 
Carvalho, D., The Real Effects of Government-Owned Banks: Evidence 
from an Emerging Market, J. Finance (2012), Vol. 69, issue 2, at 
577-609; and Claessens, S., Feijen, E., et. al., Political 
Connections and Preferential Access to Finance: The Role of Campaign 
Contributions, J. Fin. Economics (2008), Vol. 88, Issue 3, at 554-
580.
    \157\ See Notice of Proposed Rulemaking and Request for Public 
Comments, 54 FR 23366, 23367 (May 31, 1989).
---------------------------------------------------------------------------

    Therefore, based on the lack of publicly available data with 
respect to the distribution of loans for most of the state-owned policy 
banks that have been the subject of subsidy allegations in the past, 
Commerce proposes the addition of another paragraph to the regulation, 
Sec.  351.505(6)(iii), to address the initiation standard for an 
allegation of specificity for state-owned policy banks. Where loan 
distribution information for the state-owned policy bank is not 
reasonably available, under proposed Sec.  351.505(6)(iii) an 
interested party would normally meet the initiation threshold for 
specificity under the Act if the party sufficiently alleges that the 
bank provides loans pursuant to government policies or directives.
    Commerce proposes a number of modifications to Sec.  351.505(b) and 
(c) to establish a uniform standard with respect to the treatment of 
long-term loans. Commerce currently calculates the benefit for long-
term loans using different methodologies depending on whether the long-
term loan has a fixed interest rate, a variable interest rate, or a 
different repayment schedule. The proposal is intended to ensure 
consistency in the benefit calculation of long-term loans by focusing 
on the key aspect that the benefit in any given year is the difference 
between the amount of interest the firm paid on the investigated loan 
and the amount of interest that the firm would have paid on a 
comparable commercial loan. In addition, the use of a comparable 
commercial loan as defined under Sec.  351.505(a) already appropriately 
adjusts for any differences in the government-provided loan based on 
whether the loan is fixed rate, variable rate, or with a term based on 
a different payment schedule.
    Under this proposal, Commerce would modify and delete large parts 
of current Sec.  351.505(c), specifically both Sec.  351.505(c)(3) and 
Sec.  351.505(c)(4). Sections 351.505(c)(3) and 351.505(c)(4) 
separately address long-term loans with different repayment schedules 
and long-term loans with variable interest rates. Commerce proposes 
deleting those provisions and adding a provision that indicates that, 
instead, Commerce would calculate the benefit conferred by any type of 
long-term loan in the same manner by taking the difference between what 
the recipient of the government loan would have paid on a comparable 
commercial loan and the actual amount the recipient paid on the 
government-provided loan during the POI/POR and allocating that benefit 
amount to the relevant sales during the POI/POR. Under the proposal, 
all long-term loans would be addressed solely in Sec.  351.505(c)(2).
    Commerce is also proposing modifying current Sec.  351.505(b), 
which addresses the time of receipt of benefit for loans. That 
provision currently cites Sec. Sec.  351.505(c)(3) and (4), so if those 
provisions are deleted from the regulation, Sec.  351.505(b) has to be 
modified to remove reference to those provisions.
    In addition, Commerce proposes deleting sentences in Sec.  
351.505(c)(1) and Sec.  351.505(c)(2) that state that in no event may 
the present value of the calculated benefit in the year of receipt of 
the loan exceed the principal of the loan. Commerce is also proposing 
to delete the same sentence with respect to the provision of contingent 
liability interest-free loans at (e)(1). Commerce proposes to delete 
these sentences because section 771(5)(E) of the Act does not provide a 
cap on the benefit a loan may confer. The existing regulation appears 
to be a holdover from the 1980s when Commerce would calculate a benefit 
from a loan by calculating a grant equivalent for the loan and then 
allocate that amount over the Average Useful Life (AUL) of a firm's 
renewable physical assets, a methodology that has

[[Page 57312]]

since been abandoned by Commerce because the agency's experience has 
shown that it resulted in inaccurate measurements of loan benefits.
    Finally, Commerce proposes a modification to Sec.  351.505(e), 
which addresses the treatment of a contingent liability interest-free 
loan. Under current Sec.  351.505(e)(2), Commerce treats a contingent 
liability interest-free loan as a grant if at any point in time the 
agency determines that the event upon which repayment depends is not a 
viable contingency. However, the existing regulation does not address 
the situation where the recipient firm has either taken the required 
action or achieved the contingent goal and the government has waived 
repayment of the contingent loan. Therefore, Commerce proposes to 
modify this regulation to state that it will also treat the contingent 
loan as a grant when the loan recipient has met the contingent action 
or goal and the government has not taken any action to collect 
repayment.

21. Address the Treatment of Firms in Government Designated ``Outside 
Customs Territory'' Zones--Sec.  351.509(a)(1) and 351.510(a)

    Commerce is proposing a modification to its regulations covering 
direct taxes and indirect taxes and import charges (other than export 
programs), Sec.  351.509 and Sec.  351.510. The modification to both 
provisions is intended to clarify Commerce's treatment of the exemption 
of taxes and import charges in zones designated as being outside the 
customs territory of the country.
    In the 2012 CVD investigation of Steel Pipe from Vietnam, Commerce 
determined that the exemption of import charges on capital assets into 
an export processing zone was not countervailable.\158\ Commerce stated 
that the Government of Vietnam designated the respondent company as an 
export processing zone, and based upon that designation the operations 
of the company were outside the customs territory of the country.\159\ 
Therefore, Commerce concluded that because the company was outside the 
customs territory of Vietnam, the exemption of import duties on capital 
goods did not provide a financial contribution in the form of revenue 
forgone.\160\ However, upon further consideration of our decision in 
Steel Pipe from Vietnam, Commerce has concluded that its treatment of 
firms or zones that are designated as being ``outside the customs 
territory'' of a country in that case to be at odds with our long-term 
established practice, our regulations, and the purpose of the CVD 
statute.
---------------------------------------------------------------------------

    \158\ See Circular Welded Carbon-Quality Steel Pipe from the 
Socialist Republic of Vietnam: Final Negative Countervailing Duty 
Determination, 77 FR 64471 (October 22, 2012), and accompanying IDM 
at Comment 3.
    \159\ Id.
    \160\ Id.
---------------------------------------------------------------------------

    Under Sec.  351.102(a)(25), ``government-provided'' is a shorthand 
expression for any act or practice by a government being analyzed as a 
possible government subsidy. Critical to Commerce's analysis of whether 
a government act or practice constitutes a countervailable subsidy is a 
determination of what the situation of the firm would be in the absence 
of the government program. For example, Sec.  351.509(a), which 
addresses direct taxes, states that a benefit exists to the extent that 
the tax paid by the firm is less than the tax the firm would have paid 
in the absence of the program; under Sec.  351.510(a) regarding 
indirect taxes and import charges, a benefit exists to the extent that 
the taxes or an import charge paid by a firm as a result of the program 
are less than the taxes or import charges the firm would have paid in 
the absence of the program. Similarly, and under the benefit regulation 
at Sec.  351.503(b), Commerce will consider a benefit to be conferred 
by government programs when a firm pays less for its inputs (e.g., 
money, a good or service) than it otherwise would pay or receives more 
revenues than it otherwise would earn in the absence of the government 
program.
    The government designation of either a firm or a zone as being 
outside the customs territory constitutes a government act or program 
as defined within Commerce's regulations. By establishing areas in 
which it will not collect taxes or import charges on capital goods, the 
government has taken an explicit action to provide both a financial 
contribution and a benefit to a firm that is operating within the 
designated area. Absent the government action, the firm otherwise would 
have paid either direct taxes or import charges. These government 
actions provide incentives to exporters, and as the Supreme Court 
explained in Zenith, a purpose of the countervailing duty law and the 
imposition of countervailing duties is ``to offset the unfair 
competitive advantage that foreign producers would otherwise enjoy from 
export subsidies paid by their governments.'' \161\
---------------------------------------------------------------------------

    \161\ See Zenith Radio Corp. v. United States, 437 U.S. 443, 
455-56 (1978).
---------------------------------------------------------------------------

    Thus, to ensure the appropriate application of the CVD statute, 
Commerce proposes an amendment to both Sec.  351.509(a)(1) and Sec.  
351.510(a)(1) to close a potential loophole through which foreign 
governments might provide a countervailable subsidy including a 
prohibited export subsidy. Commerce proposes including the underlined 
language within Sec.  351.509(a)(1): ``a benefit exists to the extent 
that the tax paid by a firm as a result of the program is less than the 
tax the firm would have paid in the absence of the program, including 
as a result of being located in an area designated by the government as 
being outside the customs territory of the country'' (emphasis added). 
For Sec.  351.510(a), the amended language would read: ``a benefit 
exists to the extent that the taxes or import charges paid by a firm as 
a result of the program are less than the taxes the firm would have 
paid in the absence of the program, including as a result of being 
located in an area designated by the government as being outside the 
customs territory of the country'' (emphasis added). This new language 
would also be included in Commerce's proposed new Sec.  351.521(a)(1), 
discussed further below, that addresses indirect taxes and import 
charges on capital goods and equipment (export programs).
    Commerce is not proposing to add this language to Sec.  351.518 and 
Sec.  351.519, which address the exemption, remission, or deferral upon 
export of prior-stage cumulative indirect taxes and the remission or 
drawback of import charges upon export for inputs consumed in the 
production of an exported product. The treatment of inputs consumed in 
the production of an exported product codified under these sections of 
our regulations addresses long-established rules of global trade 
adopted by the United States that were first established under the 
General Agreement on Tariffs and Trade (GATT) and later incorporated 
into the World Trade Organization (WTO) Agreement on Subsidies and 
Countervailing Measures. For the same reason, Commerce is not 
incorporating this language into Sec.  351.517, which addresses the 
exemption or remission upon export of indirect taxes.

22. Recognizing the Use of Sales From Government Run Auctions--Sec.  
351.511(a)(2)(i)

    Section 351.511 regulates how Commerce examines and determines if 
goods or services are being sold for less than adequate remuneration 
(LTAR) in accordance with section 771(5)(E)(iv) of the Act. Section 
351.511(a)(2) defines ``adequate remuneration'' and describes the use 
of a market-determined benchmark price resulting from actual

[[Page 57313]]

transactions in the country subject to the CVD proceeding for purposes 
of evaluating the adequacy of remuneration. Pursuant to the language of 
the current provision, under certain circumstances, an in-country, 
market-determined price could also include ``actual sales from 
competitively run government auctions.'' Commerce is now proposing a 
modification to the regulation which would list the circumstances under 
which such auction prices may serve as a usable tier-one benchmark. 
Under this proposed change, Commerce would explain that for a 
government run auction to be ``competitively run,'' the government 
auction must use ``competitive bid procedures that are open without 
restriction on the use of the good or service;'' it must be ``open 
without restrictions to all bidders, including foreign enterprises, and 
protect the confidentiality of the bidders;'' it must account ``for the 
substantial majority of the actual government provision of the good or 
service in the country in question;'' and the winner of the government 
auction must be ``based solely on price.''
    While the preamble to the current regulation provides some guidance 
on when Commerce would use actual sales from a government-run auction 
to evaluate adequate remuneration,\162\ codifying a more defined set of 
auction criteria in Sec.  351.511(a)(2)(i) would ensure consistency and 
clarity in the application of this regulation and better inform the 
public of the criteria that are used by Commerce in evaluating whether 
prices from a government-run auction can be used as an in-country, 
market-determined price for purposes of evaluating the adequacy of 
remuneration.
---------------------------------------------------------------------------

    \162\ See 1998 Preamble, 63 FR at 65377.
---------------------------------------------------------------------------

23. Addition of the Purchase of Goods for More Than Adequate 
Remuneration Regulation--Sec.  351.512

    When Commerce issued its current CVD regulations in 1998, it 
designated Sec.  351.512 as ``[reserved].'' \163\ Commerce explained 
that it did not have sufficient experience with respect to the 
government purchase of a good for more than adequate remuneration 
(MTAR) at the time; thus, it concluded that it was not appropriate then 
to set forth a standard with respect to its treatment of these types of 
financial contributions.\164\ More than 25 years later, the issue of a 
subsidy in the form of the government purchase for more than adequate 
remuneration has come before Commerce in only a limited number of 
cases. Nonetheless, Commerce has developed certain methodologies with 
respect to this type of financial contribution through those cases, 
especially in regard to the situations in which the government is both 
a provider and a purchaser of the good at issue. In addition, important 
differences between the treatment of an MTAR and an LTAR analysis 
relating to the basis of a price comparison that should be set forth 
within a regulation have emerged. Accordingly, Commerce is proposing a 
regulation providing guidance on subsidies covering the purchase of a 
good for MTAR.
---------------------------------------------------------------------------

    \163\ Id., 63 FR at 65412.
    \164\ Id., 63 FR at 65379.
---------------------------------------------------------------------------

    First, proposed Sec.  351.512(a)(1), would address the benefit 
conferred from the government purchase of a good, which is derived from 
the standard in section 771(5)(E)(iv) of the Act. Under that provision, 
in the case where goods are purchased by a government or a public body, 
a benefit would exist to the extent that such goods are purchased for 
more than adequate remuneration.
    Next, proposed Sec.  351.512(a)(2) would define ``adequate 
remuneration'' within the context of an analysis of a government's 
purchase of a good. The proposed standard for adequate remuneration for 
the purchase of a good is not as detailed as the definition of the 
provision of a good or service by a government under Sec.  
351.511(a)(2) because Commerce has had a much longer history and 
experience in addressing the provision of a good or service by a 
government. Though more limited, Commerce's experience is sufficient to 
inform a proposed general standard of adequate remuneration for a 
government's purchase of a good.
    Under proposed Sec.  351.512(a)(2)(i), Commerce would measure the 
adequacy of remuneration by comparing the price paid to the firm for 
the good by the government to a market-determined price for that good 
based on actual transactions between private parties in the country in 
question or, if not available, then to a world market price or prices 
for that good. In the application of this standard, consistent with the 
statute, Commerce's preference would be to use actual transactions 
between private parties within the country in question.
    Actual transactions in the country in question must be market-based 
and, therefore, would consist of the sale of the investigated good 
between private parties. In-country market-determined prices would also 
include import prices. Similar to the treatment of actual transactions 
in Sec.  351.511, Commerce would not intend to adjust in-country prices 
to account for government distortion of the market. While Commerce 
recognizes that government involvement in a market may have some impact 
on the prices of the good, such distortion will normally be minimal 
unless the government constitutes a substantial portion of the market.
    Where it is reasonable to conclude that actual transaction prices 
are significantly distorted as a result of the government's involvement 
in the market or that market-determined in-country prices are otherwise 
not available, proposed Sec.  351.512(a)(2)(i) would also state that 
Commerce will consider the use of world market prices as the comparison 
price for measuring the adequacy of remuneration. If there is useable 
information on the record for more than one world market price, 
Commerce would average the world market prices that are on the record 
absent record evidence that one or more of those world market prices 
are otherwise distorted.
    This proposed regulation would differ from Commerce's treatment of 
world market prices under the LTAR regulation, Sec.  351.511(a)(2)(ii), 
pursuant to which Commerce uses world market prices in analyzing the 
provision of goods or services for LTAR only when it is reasonable to 
conclude that the good in question is commercially available to the 
firm. Commerce has not proposed to adopt that standard for the 
government purchase of a good, because section 771(5)(E) of the Act 
requires Commerce to assess benefit based upon the ``benefit to the 
recipient.'' The benefit analysis for the government purchase of a good 
is unrelated to whether the recipient of the benefit could purchase the 
good that it sold to the government; therefore, the availability to the 
firm of goods from outside the country is irrelevant under the 
``benefit to the recipient'' standard when the financial contribution 
is the government purchase of a good from that firm.
    Under proposed Sec.  351.512(a)(2)(ii), if there are no market-
determined domestic prices or world market prices available, then 
Commerce could measure the adequacy of remuneration by examining any 
premium provided to domestic suppliers of the good based on the 
government's procurement regulations and policies, those that are 
established in any bidding documents,\165\ or any other

[[Page 57314]]

methodology. This assessment could include comparing the costs of 
production, including a reasonable profit margin, of the recipient to 
the price that is paid by the government for the purchased good.
---------------------------------------------------------------------------

    \165\ In Aluminum Extrusions from the People's Republic of 
China: Preliminary Affirmative Countervailing Duty Determination, 75 
FR 54302 (September 7, 2010), Commerce found that the Procurement 
Law provided an incentive to domestic producers in that the 
government will purchase a good from a domestic producer as long as 
the price does not exceed the lowest offered price for that good 
from foreign producers by more than 20 percent. In the Final 
Determination Commerce found the program not used.
---------------------------------------------------------------------------

    Commerce recognizes that for certain products, such as enriched 
uranium, the primary purchasers in both the domestic and the world 
market are normally governments, government-owned entities, or 
government-controlled entities, or the purchase of such goods is highly 
controlled and regulated by the government.\166\ In such markets 
Commerce would closely examine the bidding and purchase conditions in 
assessing whether the purchase price paid by the government is 
consistent with market principles, which may include an analysis of the 
costs of producing or processing that good.
---------------------------------------------------------------------------

    \166\ See Uranium Enrichment, World Nuclear Association (2022), 
available at https://world-nuclear.org/information-library/nuclear-fuel-cycle/conversion-enrichment-and-fabrication/uranium-enrichment.aspx.
---------------------------------------------------------------------------

    Under proposed Sec.  351.512(a)(2)(iii), in measuring adequate 
remuneration under paragraph (a)(2)(i) or (a)(2)(ii) of this section, 
Commerce would use an ex-factory or ex-works comparison price and the 
price paid to the firm for the good by the government in order to 
measure the benefit conferred to the recipient within the meaning of 
section 771(5)(E) of the Act. Therefore, if necessary, Commerce would 
adjust the comparison price and the price paid to the firm by the 
government to remove all delivery charges, import duties, and taxes to 
derive an ex-factory or ex-works price. This is another important 
difference from Commerce's LTAR methodology, where Commerce uses 
delivered prices pursuant to Sec.  351.512(a)(2)(iv). Under section 
771(5)(E) of the Act, Commerce is required to determine the benefit of 
a subsidy based on the benefit conferred to the recipient. In an LTAR 
analysis under Sec.  351.511, Commerce determines the price that the 
recipient would have paid for the good or service from a private party 
and that good has to be available to the recipient. Therefore, in order 
for the good to be available to the recipient, the recipient has to 
incur delivery charges and any taxes or import changes to take 
possession of the good.
    However, in an MTAR analysis under section 771(5)(E) of the Act, 
Commerce's sole focus is the benefit that is provided to the recipient 
from the government purchase of the good. Any delivery charges or taxes 
are expenses that are ultimately incurred by the government as the 
purchaser of the good and are not relevant to the revenue and benefit 
received by the MTAR subsidy recipient. Thus, the subsidy benefit 
conferred to the recipient in a MTAR analysis is solely the additional 
revenue (funds) received from the government, beyond what the market 
would have provided, on the purchase of that good. This is an important 
distinction between LTAR and MTAR benefit analyses under Sec.  351.511 
and Sec.  351.512.
    Delivery charges could be considered the provision of a service but 
purchases of services by the government are not financial contributions 
under section 771(5)(D) of the Act. Thus, delivery charges are also not 
countervailable subsidies under the CVD law. Including delivery charges 
within an MTAR analysis would potentially place Commerce in the 
position of finding countervailable the government purchase of 
services. Accordingly, for this reason as well, it is important that 
Commerce adjust the comparison price and the price paid to the firm by 
the government to remove all delivery charges in its MTAR analysis 
under proposed Sec.  351.512.
    Under proposed Sec.  351.512(a)(3) Commerce proposes codifying its 
treatment of how it calculates a benefit when the government is both a 
provider and purchaser of the good, such as with electricity. In that 
situation, Commerce would normally measure the benefit to the recipient 
firm by comparing the price at which the government provided the good 
to the price at which the government purchased the same good from the 
firm. While Commerce has had limited experience with subsidies in the 
form of the government purchasing a good for MTAR, it has had numerous 
cases where the government is both the provider and purchaser of a 
good, e.g., the government both provided and purchased electricity from 
a respondent, in our investigations and administrative reviews.\167\
---------------------------------------------------------------------------

    \167\ See, e.g., Countervailing Duty Investigation of Certain 
Hot-Rolled Steel Flat Products from the Republic of Korea: Final 
Affirmative Determination, 81 FR 53439 (August 4, 2016), and 
accompanying IDM at 35-36; Certain Softwood Lumber Products from 
Canada: Final Affirmative Countervailing Duty Determination, and 
Final Negative Determination of Critical Circumstances, 82 FR 51814 
(November 8, 2017), and accompanying IDM at 159-74; and Certain 
Uncoated Groundwood Paper from Canada: Final Affirmative 
Countervailing Duty Determination, 83 FR 39414 (August 9, 2018), and 
accompanying IDM at 149-83.
---------------------------------------------------------------------------

    Section 771(5)(E) of the Act states that a benefit will normally be 
treated as conferred when there is a ``benefit to the recipient.'' In 
other words, section 771(5)(E) of the Act provides the standard for 
determining the existence and amount of a benefit conferred through the 
provision of a subsidy and reflects the ``benefit-to-the-recipient'' 
standard which ``long has been a fundamental basis for identifying and 
measuring subsidies under U.S. CVD practice.'' \168\ Therefore, in 
situations where the government is acting on both sides of the 
transactions--both selling a good to, and purchasing that good from, a 
respondent--under proposed Sec.  351.512(a)(3), Commerce would measure 
the benefit to the respondent by determining the difference between the 
price at which the government is selling the good to the company, and 
the price at which the government is purchasing that good from the 
company. In other words, under the ``benefit-to-the-recipient'' 
standard set forth within section 771(5)(E) of the Act, if a government 
provided a good to a company for three dollars and then purchased the 
identical good from the company for ten dollars, logic dictates that 
the benefit provided to the company by the government, all else being 
equal, would be seven dollars.
---------------------------------------------------------------------------

    \168\ See SAA at 927.
---------------------------------------------------------------------------

    Finally, proposed Sec.  351.512(b) would address the timing of the 
receipt of the benefit from the government purchase of a good. Under 
Sec.  351.512(b), Commerce would normally consider a benefit as having 
been received on the date on which the firm receives payment from the 
government for the good. Under Sec.  351.512(c), Commerce would 
normally allocate (expense) the benefit to the year in which the 
benefit is considered to have been received under paragraph (b) of this 
section. However, if the purchase is for, or tied to, capital assets 
such as land, buildings, or capital equipment, the benefit will be 
allocated over time as provided in Sec.  351.524(d)(2).

24. Removing Reserved Regulation Regarding Import Substitution 
Subsidies--and Creating a Regulation To Address Indirect Taxes and 
Import Charges on Capital Goods and Equipment (Export Programs)--Sec.  
351.521

    Import substitution subsidies are defined as subsidies that are 
``contingent upon the use of domestic goods over imported goods, alone 
or as 1 of 2 or more conditions,'' in section 771(5A)(C) of the Act. 
When Commerce published its current CVD regulations in 1998, Commerce 
held in reserve Sec.  351.521 for import substitution subsidies.\169\ 
However, in the years in

[[Page 57315]]

which that term has been defined in the Act, Commerce has had no issues 
with addressing and quantifying import substitution subsidies without 
an applicable regulation. Accordingly, Commerce is proposing to delete 
this reserved regulation as unnecessary.
---------------------------------------------------------------------------

    \169\ See 1998 Preamble, 63 FR at 65414.
---------------------------------------------------------------------------

    Instead, Commerce is proposing new Sec.  351.521, which would 
address Indirect Taxes and Import Charges on Capital Goods and 
Equipment (Export Programs). Commerce has found that programs that 
provide for an exemption from or reduction of indirect taxes and import 
charges on capital goods and equipment to be countervailable export 
subsidies and has had to address such subsidies under existing 
regulations on the treatment of direct taxes (Sec.  351.509); treatment 
of indirect taxes and import charges (other than export programs) 
(Sec.  351.510); and remission or drawback of import charges upon 
export (Sec.  351.519).\170\ However, none of these current regulations 
directly addresses programs that provide an exemption from indirect 
taxes and import charges for exporters that purchase capital goods or 
equipment.
---------------------------------------------------------------------------

    \170\ See, e.g., Certain Frozen Warmwater Shrimp from Thailand: 
Final Negative Countervailing Duty Determination, 78 FR 50379 
(August 19, 2013) and accompanying IDM at 9.
---------------------------------------------------------------------------

    A program that provides an exemption from indirect taxes and/or 
import duties for exporters that purchase capital equipment would not 
be addressed under the regulation for direct taxes (Sec.  351.509); nor 
would that program be addressed under Sec.  351.510, which is only 
applicable to domestic subsidies. In addition, Sec.  351.519 addresses 
duty drawback on inputs of raw materials that are consumed in the 
production of an exported product and thus would not be applicable to 
the exemption of indirect taxes and import charges provided on 
purchases of capital goods and equipment. Therefore, Commerce has 
proposed this new regulation to explicitly address the exemption of 
indirect taxes and import charges on capital goods and equipment that 
are export-specific.
    Specifically, proposed new Sec.  351.521(a)(1) and (2) address the 
exemption or remission of indirect taxes and import charges and the 
deferral of indirect taxes and import charges. In the case of export 
subsidies which provide full or partial exemptions from or remissions 
of an indirect tax or an import charge on the purchase or import of 
capital goods and equipment, Sec.  351.521(a)(1) would provide that a 
benefit exists to the extent that the indirect taxes or import charges 
paid by a firm are less than they would have been but for the existence 
of the program (including firms located in customs territories 
designated as outside of the customs territory of the country). For the 
deferral of indirect taxes or import charges, the proposed regulation 
would provide that a benefit exists to the extent that appropriate 
interest charges are not collected. Proposed Sec.  351.521(a)(2) would 
provide that a deferral of indirect taxes or import charges would 
normally be treated as a government-provided loan in the amount of the 
taxes or charges deferred, consistent with the methodology set forth in 
Sec.  351.505; that Commerce would use a short-term interest rate as 
the benchmark for deferrals that are a year in length or shorter; and 
that for deferrals of more than one year, Commerce would use a long-
term interest rate as the benchmark.
    Proposed Sec.  351.521(b) would provide that the time of receipt of 
benefits for the recipient for the exemption from or remission of 
indirect taxes or import charges would be when the recipient firm would 
otherwise be required to pay the indirect tax or import charge and the 
date on which the deferred tax becomes due for deferral of taxes for 
one year or shorter or the anniversary date of a deferral lasting for 
more than one year.
    Finally, proposed Sec.  351.521(c) states that Commerce would 
allocate the benefit of a full or partial exemption, remission, or 
deferral of payment of import taxes or import charges to the year in 
which the benefit was considered received under Sec.  351.521(b).

25. Removing the Regulation Regarding Green Light and Green Box 
Subsidies Regulation--Sec.  351.522

    Commerce proposes deleting the Green Light and Green Box subsidies 
provision found at current Sec.  351.522 because the provisions are no 
longer relevant under U.S. law. Under section 771(5B)(G)(i) of the Act, 
the Green Light provisions under subparagraphs (B), (C), (D) and (E) 
lapsed 66 months after the WTO Agreement entered into force, circa 2000 
and 2001, as these provisions were not extended pursuant to section 
282(c) of the Uruguay Round Agreements Act.\171\ Under section 
771(5B)(G)(ii) of the Act, the provision for Green Box subsidies no 
longer applied at the end of the nine-year period beginning on January 
1, 1995. Because the statutory authority to consider Green Light and 
Green Box subsidies ended approximately 25 years ago, Commerce proposes 
eliminating these obsolete provisions.
---------------------------------------------------------------------------

    \171\ See Uruguay Round Agreements Act (URAA), Public Law 103-
465, 108 Stat. 4809 (1994).
---------------------------------------------------------------------------

26. Revising Commerce's Attribution of Subsidies to Products Where 
There are Corporations With Cross-Ownership and Trading Companies, and 
Creating a Subheading Regarding Subsidy Calculation in Economies With 
High Inflation--Sec.  351.525(b), (c), and (d)

    Under section 701(a) of the Act, Commerce is required to 
investigate and quantify countervailable subsidies that are provided 
either directly or indirectly with respect to the manufacture, 
production, or export of merchandise subject to a CVD investigation or 
administrative review. The calculation and attribution rules that are 
set forth under Sec.  351.525 are the primary tools used to quantify 
the subsidies that are being provided either directly or indirectly to 
the manufacture, production and exportation of subject merchandise.
    When Commerce developed the current attribution rules for cross-
owned companies 25 years ago, it had limited experience with the 
attribution of subsidies between affiliated companies. The practice of 
requiring information from cross-owned companies involved in the supply 
of an input product, a holding or parent company, or the production of 
subject merchandise evolved slowly for Commerce, and this practice led 
to the development of some of the attribution rules that are currently 
codified under Sec.  351.525. It was essentially not until the results 
of investigations into steel products from various countries \172\ that 
Commerce began to attribute to a respondent the subsidies that were 
provided to companies that were related to the respondent through 
cross-ownership.\173\ In those investigations, Commerce required 
``complete responses for all related companies that conducted either of 
the following types of financial transactions: (a) Any transfer of 
funds (e.g., grants, financial assets) or physical assets to the 
respondent, the benefits of which were still employed by the producer 
of the subject merchandise during the POI; or (b) Any assumption of 
debt or other financial obligation of the respondent (e.g., loan 
payments, dividend payments, wage compensation) that the respondent 
would have had to pay during the

[[Page 57316]]

POI.'' \174\ Therefore, collecting subsidy information from parent 
companies and affiliated input suppliers was a relatively recent 
practice when Commerce was developing and codifying our current 
attribution rules.
---------------------------------------------------------------------------

    \172\ See Final Affirmative Countervailing Duty Determination: 
Certain Steel Products from Austria, 58 FR 37217, 37218 (July 9, 
1993).
    \173\ Under Sec.  351.525(b)(6)(vi), cross-ownership exists 
between two or more corporations where one corporation can use or 
direct the individual assets of the other corporation(s) in 
essentially the same ways it can use its own assets.
    \174\ See Final Affirmative Countervailing Duty Determination: 
Certain Steel Products from Austria, 58 FR 37217, 37218 (July 9, 
1993).
---------------------------------------------------------------------------

    In the ensuing years, Commerce has developed a detailed practice 
with respect to the treatment of cross-owned companies and the 
attribution to respondents of subsidies received by cross-owned 
companies. Based on this experience, Commerce proposes a number of 
changes to its attribution rules that are currently codified under 
Sec.  351.525(b)(6).
    As an initial matter, cross-ownership is defined under current 
Sec.  351.525(b)(6)(vi), and Commerce is not proposing a modification 
to that paragraph, except for moving it to Sec.  351.525(b)(6)(vii) in 
light of changes to other provisions.\175\
---------------------------------------------------------------------------

    \175\ Commerce notes that the standard set forth in the 
regulation is that cross-ownership will normally be met when there 
is a majority voting ownership interest between two corporations or 
through common ownership of two (or more) corporations. However, 
Commerce's experience since 1998 has shown that other factors, such 
as certain familial relationships, may, in particular circumstances, 
warrant a finding of cross-ownership, with or without a majority 
voting ownership interest. See Coated Free Sheet Paper from 
Indonesia: Final Affirmative Countervailing Duty Determination, 72 
FR 60642 (October 25, 2007). A finding of cross-ownership is an 
entity-specific determination.
---------------------------------------------------------------------------

    Next, proposed Sec.  351.525(b)(6)(iii), which addresses holding or 
parent companies, would delete the section that states that if a 
holding company merely serves as a conduit for the transfer of the 
subsidy from a government to a subsidiary, that Commerce will attribute 
the subsidy solely to the products sold by the subsidiary. This 
language would be redundant in light of proposed revisions to the 
attribution section on the transfer of subsidies between corporations 
with cross-ownership, as described below.
    With respect to the cross-ownership attribution rule for input 
suppliers, Sec.  351.525(b)(6)(iv), Commerce is proposing a number of 
changes in order to add more clarity with respect to the analysis of 
when an input is ``primarily dedicated'' to the production of a 
downstream product. In addition, Commerce has found that the examples 
provided in the 1998 preamble to the current regulations (semolina to 
pasta; trees to lumber; and plastic to automobiles) \176\ have not 
assisted with respect to many of the input products that Commerce has 
encountered in its CVD cases. Moreover, the analysis of whether an 
input is primarily dedicated has been an issue in recent CIT 
holdings.\177\ Therefore, Commerce proposes a number of factors that it 
would consider in its analysis of whether an input is primarily 
dedicated.
---------------------------------------------------------------------------

    \176\ See 1998 Preamble, 63 FR at 65401 (providing examples of 
when it may be appropriate to attribute the subsidies received by an 
input supplier to the production of cross-owned corporations 
producing the downstream product--situations where the purpose of 
the subsidy provided to the input producers is to benefit both the 
input and downstream product.).
    \177\ See, e.g., Kaptan Demir Celik Endustrisi Ve A.S. v. United 
States, Court No. 21-00565, Slip-Op (CIT April 26, 2023); Nucor 
Corporation v. United States, Court No. 21-00182, Slip Op. 22-116 
(CIT October 5, 2022); and Gujarat Fluorochemicals Ltd. v. United 
States, 617 F. Supp. 3d 1328, 1330 (CIT 2023).
---------------------------------------------------------------------------

    In Sec.  351.525(b)(6)(iv)(A), Commerce proposes to add language to 
explicitly state that the attribution rule applies only to cross-owned 
corporations that produce the input, as opposed to cross-owned 
companies that procure the input from non-cross-owned companies and 
then provide that input to the respondent. To provide further clarity, 
Commerce has proposed to change the title of this attribution 
regulation from ``input supplier'' to ``input producer.'' The 
definition of an input under this attribution regulation would cover 
the creation or generation of by-products as a result of the production 
operations of the cross-owned input producer. With these proposed 
changes to the regulation, Commerce is not intending to change its 
current practice that a primarily dedicated input does not have to be 
used directly in the production of subject merchandise but may be used 
as an input at earlier stages of production.
    In addition, as noted above, Commerce proposes a number of criteria 
or factors that it will review when determining whether an input is 
primarily dedicated to the production of downstream products. Under 
proposed Sec.  351.525(b)(6)(iv)(B), Commerce would first determine, 
whether the input could be used in the production of a downstream 
product including subject merchandise, regardless of whether the input 
is actually used for the production of subject merchandise. The 
additional criteria, in no particular hierarchy, would allow Commerce 
to consider (1) whether the input is a link in the overall production 
chain; (2) whether the input provider's business activities are focused 
on providing the input to the downstream producer; (3) whether the 
input is a common input used in the production of a wide variety of 
products and industries; (4) whether the downstream producers in the 
overall production chain are the primary users of the inputs produced 
by the input producer; (5) whether the inputs produced by the input 
producer are primarily reserved for use by the downstream producer 
until the downstream producer's needs are met; (6) whether the input 
producer is dependent on the downstream producers for the purchases of 
the input product; (7) whether the downstream producers are dependent 
on the input producer for their supply of the input; (8) the 
coordination, nature and extent of business activities between the 
input producer and the downstream producers whether directly between 
the input producer and the downstream producers or indirectly through 
other cross-owned corporations; and (9) other factors deemed relevant 
by Commerce based upon the case-specific facts. The analysis of the 
facts on the record of whether an input is primarily dedicated is 
always guided by the statutory mandate of addressing, and including, 
countervailable subsidies provided either directly or indirectly to the 
manufacture or production of subject merchandise as required under 
section 701(a) of the Act.
    Whether an input product is primarily dedicated is a highly fact-
intensive analysis of all of the information on the record; such 
information is usually business proprietary and thus cannot be 
discussed in Commerce's public determinations. The fact that the data, 
and Commerce's analysis, usually rely on business proprietary 
information makes it a complicated process with respect to 
distinguishing specific determinations of ``primarily dedicated'' from 
one another. For some complicated input issues, just a few small 
differences in the facts on the record may be the deciding factor that 
render an input primarily dedicated or not. However, Commerce has 
concluded that the proposed criteria set forth within Sec.  
351.525(b)(6)(iv)(B) will provide additional clarity to the public with 
respect to Commerce's analysis of whether an input product is primarily 
dedicated to a downstream product.
    Since the publication of the current attribution rules, Commerce 
has increasingly faced more complex cross-ownership issues and 
corporate structures. Moreover, the transactions between these cross-
owned corporate entities and their provision of ``inputs'' as defined 
and addressed within the CVD regulations have multiplied with increased 
complexities. Therefore, with an additional 25 years of experience in 
addressing transactions between cross-owned companies since the 
publication of the current attribution rules, Commerce has concluded 
that it is appropriate now to propose an

[[Page 57317]]

additional attribution rule to cover the provision of certain 
``inputs'' that are more than just input products used in the 
manufacture or production of downstream products, specifically cross-
owned providers of electricity, natural gas or similar utility goods.
    Under proposed revisions to Sec.  351.525(b)(6)(v), titled 
``Providers of utility products,'' if there is cross-ownership between 
a company providing electricity, natural gas or other similar utility 
product and a producer of subject merchandise, Commerce would attribute 
subsidies received by that provider to the combined sales of that 
provider and the sales of products sold by the producer of subject 
merchandise if at least one of the following two conditions is met: a 
substantial percentage, normally defined as 25 percent or more, of the 
production of the electricity, natural gas, or other similar utility 
product by the cross-owned utility provider is provided to the producer 
of subject merchandise; or the producer of subject merchandise 
purchases 25 percent or more of its electricity, natural gas, or other 
similar utility product from the cross-owned provider. Commerce has 
concluded that the criteria being developed for determining whether an 
input product is primarily dedicated to the production of downstream 
products is not particularly useful for utility products such as 
electricity and natural gas. Among other considerations, electricity 
and natural gas are not the same as a physical input into the 
production of downstream products but have emerged as goods or services 
that can effectively subsidize the production or manufacture of certain 
products. Therefore, a consistent standard of analysis for the 
attribution of utility products provided by a cross-owned corporation 
would assist the agency in effectuating the requirements of section 
701(a) of the Act.
    Section 771A of the Act provides standards for determining when an 
upstream subsidy results in a subsidy being provided to the production 
or manufacture of subject merchandise. However, the upstream subsidy 
provision applies to situations beyond those in which cross-ownership 
exists. This proposed regulation would focus on the provision of 
utility products between cross-owned companies in order to provide both 
clarity to the public and consistency of treatment among Commerce's 
cases. In proposing this standard, Commerce recognizes that in most 
economies, providers of goods such as electricity and natural gas are 
government-regulated public utilities and manufacturers require utility 
goods and services to conduct their operations. In Commerce's view, a 
utility company providing 25 percent of its output to one company 
indicates a significant level of dependency and dedication to one 
customer, and a company that purchases 25 percent of its energy needs 
from one supplier has also become engaged in a significant supplier 
relationship. Therefore, the Proposed Rule establishes a 25 percent 
threshold for attributing subsidies received by the cross-owned utility 
company and the producer of subject merchandise.
    However, if the cross-owned utility company is an authority and 
there is an allegation that the government is providing the electricity 
or natural gas for less than adequate remuneration or that the private 
cross-owned utility company is entrusted or directed to provide 
electricity or natural gas for less than adequate remuneration, 
Commerce would normally analyze these types of allegations under Sec.  
351.511, its regulation on the provision of a good or service.
    Although the proposed regulation addresses only utility product 
providers, Commerce retains the authority to include subsidies received 
by certain cross-owned companies which are not utility product 
providers when it concludes the specific facts on the record warrant 
such inclusion.
    For example, Commerce has at times had to determine whether to 
include subsidies received by cross-owned companies that provide land, 
employees, and manufacturing facilities, including plants and 
equipment, to the producer of subject merchandise. In that situation, 
if the record reflects that in order to manufacture or produce 
merchandise that is subject to an investigation or administrative 
review the cross-owned company requires a manufacturing facility and 
equipment, land upon which to place its manufacturing facilities, and/
or employees, Commerce may find that government subsidies provided to 
those cross-owned companies are providing, directly or indirectly, 
subsidies to the manufacture and production of subject merchandise as 
set forth within section 701(a) of the Act. In that case, Commerce 
might determine it appropriate to attribute the subsidies received by 
that provider to the combined sales of that provider and the sales of 
products sold by the producer of subject merchandise.
    Likewise, there may be situations in which Commerce determines that 
it is appropriate to include subsidies received by certain cross-owned 
service providers in its calculations. The preamble to the current CVD 
regulations refers to the situation in which a government provides a 
subsidy to a non-producing subsidiary such as a financial subsidiary 
and notes that consistent with Commerce's treatment of holding 
companies, the agency would attribute a subsidy to a non-producing 
subsidiary to the consolidated sales of the corporate group.\178\ 
Commerce normally does not include cross-owned general service 
providers in the attribution of subsidies.\179\ Where cross-owned 
service providers provide critical inputs into the manufacture and 
production of subject merchandise, Commerce may include cross-owned 
service providers in the attribution of subsidies. In all cases, 
whether to include subsidies provided by cross-owned service providers 
in the attribution of subsidies is a case-specific determination.
---------------------------------------------------------------------------

    \178\ See 1998 Preamble, 63 FR at 65402.
    \179\ See, e.g., Bottom Mount Combination Refrigerator-Freezers 
from the Republic of Korea: Final Affirmative Countervailing Duty 
Determination, 77 FR 17410 (March 26, 2012) and accompanying IDM at 
Comment 22.
---------------------------------------------------------------------------

    For example, if there is cross-ownership with a company providing 
R&D, tolling, or engineering services directly related to the 
production or assembly of subject merchandise, Commerce may determine 
that it is appropriate to attribute subsidies received by the service 
provider to the combined sales of that provider and the producer of 
subject merchandise. In the case of a cross-owned company performing 
R&D for the respondent company or for the corporate group, Commerce 
might determine to include the subsidies provided by the government to 
that cross-owned R&D service provider. Similarly, if the respondent 
company has a cross-owned toller that assembles or manufactures the 
subject merchandise which is subsequently sold or exported by the 
respondent, Commerce might include subsidies provided by the government 
to that cross-owned toller.\180\ With respect to engineering services, 
while Commerce will not include subsidies to companies that provide 
only general engineering services to a respondent, the agency might 
include subsidies to those service providers if the services are 
directly related to the manufacture, production or export of subject 
merchandise. For example, in Fabricated Structural Steel from Canada, 
Commerce included cross-owned companies that provided

[[Page 57318]]

engineering drafting services because these services were critical to 
the production and manufacture of subject merchandise.\181\ While the 
proposed revisions to Sec.  351.525(b)(6) do not include subsidies to 
cross-owned providers of services or subsidies to cross-owned providers 
of land, employees, and manufacturing facilities, the agency may 
attribute such subsidies in its CVD calculations where supported by the 
record.
---------------------------------------------------------------------------

    \180\ See Certain Fabricated Structural Steel from Canada: 
Preliminary Negative Countervailing Duty Determination and Alignment 
of Final Determination with Final Antidumping Duty Determination, 84 
FR 33232 (July 12, 2019), and accompanying PDM at section VI. 
Subsidies Valuation.
    \181\ Id.
---------------------------------------------------------------------------

    Under the proposed language for the transfer of subsidies (formerly 
Sec.  351.525(b)(6)(v), now Sec.  351.525(b)(6)(vi)), if a cross-owned 
corporation received a subsidy and transferred it to a producer of 
subject merchandise, Commerce would attribute the subsidy only to 
products produced by the recipient of the transferred subsidy. 
Moreover, when the cross-owned corporation that transferred the subsidy 
could fall under two or more of the attribution rules under Sec.  
351.525(b)(6), the transferred subsidy would be attributed solely to 
the recipient of the transferred subsidy as set forth under Sec.  
351.525(b)(6)(vi). With these revisions to the transfer attribution 
rule, Commerce proposes to clarify and codify that when a cross-owned 
corporation transfers a subsidy, that subsidy will be attributed only 
to the recipient of the subsidy.
    In addition, the agency proposes to amend the title of Sec.  
351.525 from ``Transfer of subsidy between corporations with cross-
ownership producing different products'' to ``Transfer of subsidy 
between corporations with cross-ownership'' to indicate that the 
transfer of a subsidy can be from any cross-owned corporation, not just 
from a cross-owned corporation that is a manufacturer.
    Furthermore, for cross-owned corporations that fall under proposed 
Sec.  351.525(b)(6)(iv), Commerce will normally only request 
information or a questionnaire response for input producers that 
provide the input to the producer of subject merchandise during the POI 
or POR. Similarly, for cross-owned corporations that fall under 
proposed Sec.  351.525(b)(6)(v), Commerce will normally only request 
information or a questionnaire response for cross-owned utility 
companies that provided electricity, natural gas or other utility 
product to the producer of subject merchandise during the POI or POR. 
In addition, for corporations producing subject merchandise under Sec.  
351.525(b)(6)(ii) that were cross-owned during the POI and POR, they 
must provide information and a questionnaire response covering the AUL 
of a firm's renewable physical assets even if one or more did not 
export subject merchandise to the United States during the POI or POR. 
Due to the ease of switching export shipments of subject merchandise 
between cross-owned corporations producing the subject merchandise and 
the potential for evasion of a CVD order, Commerce will analyze 
subsidies conferred to all cross-owned corporations producing subject 
merchandise and will calculate one CVD rate for these cross-owned 
entities. Commerce will also attribute subsidies provided during the 
AUL to all holding or parent companies that are cross-owned with the 
producer of subject merchandise during the POI or POR. Finally, 
information on the transfer of non-recurring subsidies from a cross-
owned company during the AUL must be reported, even if the company that 
transferred the subsidy to the producer of subject merchandise is no 
longer cross-owned during the POI or POR or has ceased operations.
    Commerce also proposes two additions to the attribution rules under 
Sec.  351.525(b) to codify two longstanding Commerce practices with 
respect to the attribution of subsidies to plants and factories and the 
tying of a subsidy. Under proposed Sec.  351.525(b)(8), Commerce would 
not tie or attribute a subsidy on a plant- or factory-specific basis. 
Under proposed Sec.  351.525(b)(9), a subsidy would normally be 
determined to be tied to a product or market when the authority 
providing the subsidy (1) was made aware of, or otherwise had knowledge 
of, the intended use of the subsidy and (2) acknowledged that intended 
use of the subsidy prior to, or current with, the bestowal of the 
subsidy. Commerce also proposes to modify Sec.  351.525(b)(1) to 
reflect references to the above additions of paragraphs (8) and (9) to 
the regulation.
    In the preamble to the current CVD regulations, Commerce responded 
to comments supporting a regulation to allow the agency to tie or 
attribute subsidies on a plant- or factory-specific basis by rejecting 
that proposal.\182\ Commerce's practice from at least the time the 
current CVD regulations were published over 25 years ago has been 
consistent--subsidies will not be attributed or tied on a plant- or 
factory-specific basis. Commerce now proposes to codify this practice 
in its regulations.
---------------------------------------------------------------------------

    \182\ See 1998 Preamble, 63 FR at 65404.
---------------------------------------------------------------------------

    Commerce's approach to tying goes back over 42 years. In Certain 
Steel Products from Belgium, Commerce stated that it determines that a 
grant is ``tied when the intended use is known to the subsidy giver and 
so acknowledged prior to or concurrent with the bestowal of the 
subsidy.'' \183\ When Commerce examines whether a subsidy is tied to a 
product or market, it has consistently used this test and proposes to 
codify it in proposed Sec.  351.525(b)(9).
---------------------------------------------------------------------------

    \183\ See Final Affirmative Countervailing Duty Determinations; 
Certain Steel Products from Belgium, 47 FR 39304, 39316-17 
(September 7, 1982).
---------------------------------------------------------------------------

    Under the proposed regulation, Commerce would continue to carefully 
examine all claims that a subsidy is tied to a product or market based 
on the case-specific facts on the record, To support a claim that a 
subsidy is tied, the documents on the record must demonstrate, in 
accordance with Sec.  351.525(b)(9), that the authority providing the 
subsidy explicitly acknowledged the intended purpose of the subsidy 
prior to, or concurrent with, the bestowal of the subsidy. Because the 
authority and the respondent company have access to all the program-
specific documentation related to the bestowal of a subsidy, the 
authority and the respondent company would be required to submit these 
documents to support any claim that a subsidy is tied. In general, 
these documents include all application documents submitted by the 
respondent company to the authority providing the subsidy and all the 
subsidy approval documents from that authority. A mere claim that a 
subsidy is tied to a product or market absent the submission of 
supporting documents would not be sufficient.
    Because interested parties other than the respondent government and 
company may not have access to documents related to the application and 
approval of the subsidy, such interested parties may make arguments 
that a subsidy is tied to a product or market based on information that 
is reasonably available to them. The tying of R&D subsidies raises a 
number of difficult and challenging issues due to the complex and 
highly technical nature of certain R&D projects. Therefore, in general, 
the documents submitted to support a tying claim for R&D subsidies 
should clearly set forth the products that are the focus of the R&D 
project.
    Finally, as Commerce noted in the 1998 Preamble, if subsidies that 
are allegedly tied to a particular product are in fact provided to the 
overall operations of a company, Commerce would continue to attribute 
the subsidy to all products produced by the company.\184\
---------------------------------------------------------------------------

    \184\ See 1998 Preamble, 63 FR at 65400.
---------------------------------------------------------------------------

    In addition to the aforementioned changes to Sec.  351.525(b), and 
consistent

[[Page 57319]]

with its authority to limit examinations and administer the CVD law, 
Commerce further proposes to add text to Sec.  351.525(b)(1) that would 
explain that when record information and resource availability supports 
limiting the number of cross-owned corporations examined, Commerce may 
so limit its examination before conducting a subsidy attribution 
analysis under any subsidy attribution provisions.
    For example, Commerce has determined in past cases that a 
limitation of examination was warranted when a respondent had a large 
number of cross-owned input suppliers and examination of each of those 
input suppliers would have been unduly burdensome based on the record 
information and its available resources. In such a situation, Commerce 
would have the discretion to limit the number of cross-owned input 
suppliers it may examine. This language is not intended to restrict the 
situations in which Commerce may determine that a limitation on 
examination of cross-owned corporations is appropriate or change 
Commerce's current practice of limiting examination of entities besides 
cross-owned corporations when appropriate under Sec.  351.525.
    The agency proposes to revise Sec.  351.525(c), which pertains to 
trading companies. When Commerce codified its trading company practice 
in 1998 under Sec.  351.525(c), trading companies were not selected as 
respondents in Commerce's investigations or administrative reviews. 
However, when Commerce started using CBP import data to identify the 
largest producers/exporters of subject merchandise for purposes of 
selecting respondents, Commerce discovered that in many cases the 
largest exporters were trading companies. Commerce used the current 
trading company regulation to cumulate the subsidies provided to the 
trading company with those provided to the producers from which the 
trading company has sourced the subject merchandise that it exported to 
the United States.\185\ However, in order to provide consistency and 
clarity with respect to its cumulation methodology when a trading 
company is selected as a respondent, Commerce proposes codifying this 
methodology within its trading company regulation.
---------------------------------------------------------------------------

    \185\ Commerce's practice of cumulating subsidies provided to 
trading companies with the subsidies provided to the producer of 
subject merchandise began in 1984 with the Final Affirmative 
Countervailing Duty Determination; Oil Country Tubular Goods from 
Korea, 49 FR 46776, 46777 (November 28, 1984). When Commerce 
codified this practice in our current CVD regulations in 1998, 
Commerce did not set forth a detailed methodology but stated that 
the subsidy benefits provided to trading companies would be 
cumulated with the subsidy benefits provided to the producer of the 
subject merchandise. See 1998 Preamble, 63 FR at 65404. The Preamble 
to the trading company regulation did not provide guidance as to how 
these subsidy benefits were to be cumulated. Id. While this approach 
provided Commerce with some flexibility as to how the subsidy 
benefits provided to trading companies were to be cumulated with the 
subsidy benefits conferred to the producer of subject merchandise, 
this lack of clarity in the language of the regulation also led to 
inconsistencies in the application of the methodology.
---------------------------------------------------------------------------

    Thus, in proposed Sec. Sec.  351.525(c)(i) through (iii), Commerce 
has included language stating that when the producer of subject 
merchandise exports through a trading company, Commerce will pro-rate 
the subsidy rate calculated for the trading company by using the ratio 
of the producer's total exports of subject merchandise to the United 
States sold through the trading company to the producer's total exports 
of subject merchandise to the United States and add the resultant rate 
to the producer's calculated subsidy rate. If the producer exports 
subject merchandise to the United States through more than one trading 
company, this calculation would be performed for each trading company 
and added, or cumulated, to the producer's calculated subsidy rate. 
Such an addition to the regulation would provide consistency in the 
application of the trading company regulation and provide clarity to 
the public with respect to this practice.\186\
---------------------------------------------------------------------------

    \186\ See, e.g., Certain Cold-Rolled Steel Flat Products from 
the Republic of Korea: Final Results of Countervailing Duty 
Administrative Review, 2019, 87 FR 20821 (April 8, 2022), and the 
accompanying IDM at Comment 6.
---------------------------------------------------------------------------

    With respect to proposed Sec.  351.525(d), Commerce has observed 
instances where the country whose imports were the subject of 
investigation or review was experiencing high inflation during either 
the POI or POR or had experienced levels of high inflation during the 
AUL period of the firm's renewable physical assets when the government 
had provided large non-recurring subsidies such as equity infusions to 
the respondent company. In those cases, Commerce addressed the high 
inflation rate in order to prevent distortions in the calculated ad 
valorem subsidy rate. However, the agency's treatment of high inflation 
has been inconsistent. For example, in cases on CTL Plate from Mexico 
in 2000, 2001, and 2004,\187\ Turkish Pasta \188\ in 2001, Steel Wire 
Rod from Turkey \189\ in 2002, Cold-Rolled Steel from Brazil \190\ in 
2002, and CTL Plate from Mexico Reviews \191\ in 2004, Commerce made 
adjustments to its subsidy calculations to account for periods of high 
inflation but did not do so in Honey from Argentina \192\ in 2004 and 
Biodiesel from Argentina \193\ in 2017.\194\ Therefore, to clarify its 
practice and to improve consistency as to when the agency will adjust 
its subsidy calculations for high inflation, Commerce is proposing new 
paragraph Sec.  351.525(d) to provide that Commerce would normally 
adjust its subsidy calculations for when inflation is higher than 25 
percent per annum during the relevant period. Commerce has used a 
variety of methodologies to account for high inflation and proposed 
Sec.  351.525(d) would allow for any of them to be used in the 
appropriate context. Consistent with Steel Wire Rod from Turkey, 
Commerce is defining

[[Page 57320]]

``high inflation'' as an annual inflation rate above 25 percent.
---------------------------------------------------------------------------

    \187\ See Certain Cut-to-Length Carbon Steel Plate from Mexico: 
Final Results of Administrative Review, 65 FR 13368 (March 13, 2000) 
(CTL Plate from Mexico 2000), and accompanying IDM at 3-4; see also 
Certain Cut-to-Length Carbon Steel Plate from Mexico: Final Results 
of Administrative Review, 66 FR 14549 (March 13, 2001) (CTL Plate 
from Mexico 2001), and accompanying IDM at 5-6; and Certain Cut-to-
Length Carbon Steel Plate from Mexico: Final Results of 
Administrative Review, 69 FR 1972 (January 13, 2004) (CTL Plate from 
Mexico 2004) (CTL Plate from Mexico 2004), and accompanying IDM at 
4.
    \188\ See Certain Pasta from Turkey: Final Results of 
Countervailing Duty Administrative Review, 66 FR 64398 (December 13, 
2001) and accompanying IDM at 3.
    \189\ See Final Negative Countervailing Duty Determination: 
Carbon and Certain Alloy Steel Wire Rod from Turkey, 67 FR 55815 
(August 30, 2002), and accompanying IDM at 3 (Steel Wire Rod from 
Turkey).
    \190\ See Final Affirmative Countervailing Duty Determination: 
Certain Cold-Rolled Carbon Steel Flat Products from Brazil, 67 FR 
621128 (October 3, 2002) and accompanying IDM (Cold-Rolled Carbon 
Steel Flat Products from Brazil) at 7.
    \191\ See CTL Plate from Mexico 2000 IDM at 3-4; see also CTL 
Plate from Mexico 2001 IDM at 5-6; and CTL Plate from Mexico 2004 
IDM at 4.
    \192\ See Honey from Argentina: Final Results of Countervailing 
Duty Administrative Review, 69 FR 29518 (May 24, 2004), and 
accompanying IDM (making no adjustments to account for high 
inflation).
    \193\ See Biodiesel from the Republic of Argentina: Final 
Affirmative Countervailing Duty Determination, 82 FR 53477 (November 
16, 2017), and accompanying IDM (making no adjustments to account 
for high inflation).
    \194\ Neither Honey nor Biodiesel reference high inflation in 
Argentina, although the companion antidumping cases completed at the 
same time made adjustments to account for high inflation. See Honey 
from Argentina: Final Results of Antidumping Duty Administrative 
Review, 69 FR 30283 (May 27, 2004), and accompanying IDM at Comment 
4; see also 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), and 
accompanying IDM at Comment 6.
---------------------------------------------------------------------------

    In Steel Wire Rod from Turkey, the annual inflation rate in Turkey 
exceeded 25 percent during the POI. Therefore, to prevent any 
distortions in its calculated subsidy rate due to the high level of 
inflation, Commerce adopted a methodology to adjust for inflation 
during the POI. Adjusting the subsidy benefits and the sales figures 
for inflation neutralizes any potential distortion in Commerce's 
subsidy calculations caused by high inflation and the timing of the 
receipt of the subsidy. To calculate the ad valorem subsidy rates for 
each program Commerce indexed the benefits received in each month and 
the sales made in each month to the last year of the POI/POR to 
calculate inflation-adjusted values for benefits and the relevant sales 
denominators. In these high inflation calculation adjustments, Commerce 
used the changes in the Wholesale Price Index for Turkey as reported in 
the International Monetary Fund's (IMF's) International Financial 
Statistics. In other cases where a country was experiencing high 
inflation, the agency used government-published indexes that are used 
by companies to adjust their accounting records on a monthly basis in 
its analysis.\195\
---------------------------------------------------------------------------

    \195\ See, e.g., Final Affirmative Countervailing Determination; 
Steel Wheels from Brazil, 54 FR 15523, 15526 (April 18, 1989).
---------------------------------------------------------------------------

    Commerce has also investigated non-recurring subsidies, normally 
the provision of equity, where the provision of the subsidy occurred 
during a period within the AUL in which the country experienced high 
inflation. The issue before Commerce in those cases was how to account 
for the periods of high inflation in order to accurately calculate the 
benefit. In Cold-Rolled Steel from Brazil, Commerce found that from 
1984 through 1994, Brazil experienced persistent high inflation.\196\ 
There were no long-term fixed-rate commercial loans made in domestic 
currencies during those years with interest rates that could be used as 
discount rates. Commerce determined that the most reasonable way to 
account for the high inflation in the Brazilian economy through 1994, 
given the lack of an appropriate Brazilian currency discount rate, was 
to convert values of the equity infusions provided in Brazilian 
currency into U.S. dollars.\197\ If the date of receipt of the equity 
infusion was provided, Commerce applied the exchange rate applicable on 
the day the subsidies were received or, if that date was unavailable, 
the average exchange rate in the month the subsidies were 
received.\198\ Then Commerce applied as the discount rate a 
contemporaneous long-term dollar lending rate in Brazil.\199\ 
Therefore, for Commerce's discount rate, it used data for U.S. dollar 
loans in Brazil for long-term, non-guaranteed loans from private 
lenders, as published in the World Bank Debt Tables: External Finance 
for Developing Countries.\200\
---------------------------------------------------------------------------

    \196\ See, e.g., Cold-Rolled Carbon Steel Flat Products from 
Brazil at 7.
    \197\ Id.
    \198\ Id.
    \199\ Id.
    \200\ Id.
---------------------------------------------------------------------------

    In three reviews of CTL Plate from Mexico, Commerce determined, 
based on information from the Government of Mexico (GOM), that Mexico 
experienced significant inflation from 1983 through 1988 and 
significant, intermittent inflation during the period 1991 through 
1997.\201\ In accordance with past practice, because Commerce found 
significant inflation in Mexico and because the respondent AHMSA 
adjusted for inflation in its financial statements, Commerce made 
adjustments, where necessary, in each of those reviews to account for 
inflation in the benefit calculations.\202\ Because Mexico experienced 
significant inflation during only a portion of the 15-year allocation 
period, had Commerce either indexed for the entire period or converted 
the non-recurring benefits into U.S. dollars at the time of receipt 
(i.e., dollarization) for use in Commerce's calculations, such actions 
would have inflated the benefit from these infusions by adjusting for 
inflationary as well as non-inflationary periods. Thus, in the CTL 
Plate from Mexico \203\ reviews, Commerce used a loan-based methodology 
instead to reflect the effects of intermittent high inflation.
---------------------------------------------------------------------------

    \201\ See CTL Plate from Mexico 2000 IDM at 3-4; see also CTL 
Plate from Mexico 2001 IDM at 5-6; and CTL Plate from Mexico 2004 
IDM at 4.
    \202\ Id.
    \203\ Id.
---------------------------------------------------------------------------

    The methodology Commerce used in the CTL Plate from Mexico reviews 
assumed that, in lieu of a government equity infusion/grant, a company 
would have had to take out a 15-year loan that was rolled over each 
year at the prevailing nominal interest rate. The benefit in each year 
of the 15-year period equaled the principal plus interest payments 
associated with the loan at the nominal interest rate prevailing in 
that year. Because Commerce assumed that an equity infusion/grant given 
was equivalent to a 15-year loan at the current rate in the first year, 
a 14-year loan at current rates in the second year and so on, the 
benefit after the 15-year period would be zero, just as with Commerce's 
grant amortization methodology. Because nominal interest rates were 
used, the effects of inflation were already incorporated into the 
benefit. The use of this methodology had been upheld by the Federal 
Circuit in British Steel III.\204\ Commerce used the loan-based 
methodology in the CTL Plate from Mexico reviews, described above, for 
all non-recurring, peso-denominated grants received since 1987.
---------------------------------------------------------------------------

    \204\ British Steel plc v. United States, 127 F.3d 1471 (Fed. 
Cir. 1997) (British Steel III).
---------------------------------------------------------------------------

    It is Commerce's intent that the proposed language at Sec.  
351.525(d) addressing the calculation of subsidy rates will provide 
enhanced consistency in the treatment of economies experiencing high 
inflation. To implement this methodology for countries experiencing 
high inflation during the POI or POR, Commerce normally will follow the 
methodology used in Steel Wire Rod from Turkey. For cases where the 
high inflation occurred during the AUL period at the time of a 
provision of equity or other nonrecurring subsidies, Commerce may rely 
on the methodology employed in CTL Plate from Mexico or Cold-Rolled 
Steel from Brazil.

27. Removing Regulation Regarding Program-Wide Changes and Creating a 
Regulation Regarding Subsidy Extinguishment From Changes in Ownership--
Sec.  351.526

    Under current Sec.  351.526, Commerce may take into account a 
program-wide change to lower the cash deposit rate from the subsidy 
rate that was calculated for the firm during the POI or POR in 
establishing an estimated countervailing duty cash deposit rate if 
certain conditions are met. While program-wide changes that result in 
the adjustment of the cash deposit rate are extremely rare, Commerce is 
proposing to eliminate the program-wide change regulation because it 
treats differently the interests of the interested parties by providing 
an avenue only for respondent-interested parties to lower the cash 
deposit rate but no comparable avenue for the U.S. industry, a 
situation that Commerce has concluded is fundamentally unfair and at 
odds with the neutral application of the countervailing duty law. 
Moreover, there is nothing in the Act that supports or requires the 
practice of a recognizing program-wide change for this purpose. Indeed, 
section 705(c)(1)(B)(ii) of the Act indicates that the cash deposit 
rate shall be based on the estimated countervailable subsidy rate and 
makes

[[Page 57321]]

no reference to exceptions for changes of any sort to such subsidy 
programs.
    In proposing to delete this program and cease to adjust cash 
deposit rates to account for the termination of a subsidy program, 
whether the termination occurred during the POI, POR, or AUL, Commerce 
is not seeking to change its practice with respect to determining when 
an investigated program is terminated. Commerce would maintain its 
long-standing practice to find a program to be terminated only if the 
termination is effectuated by an official act, such as the enactment of 
a statute, regulation, or decree, or the termination date of the 
program is explicitly set forth in the statute, regulation, or decree 
that established the program.\205\
---------------------------------------------------------------------------

    \205\ See Drawn Stainless Steel Sinks from the People's Republic 
of China: Final Results of the Expedited First Sunset Review of the 
Countervailing Duty Order, 83 FR 35212 (July 25, 2018), and 
accompanying IDM at ``Likelihood of Continuation or Recurrence of a 
Countervailable Subsidy'' (``[I]n order to determine whether a 
program has been terminated, we will consider the legal method by 
which the government eliminated the program and whether the 
government is likely to reinstate the program. Commerce normally 
expects a program to be terminated by means of the same legal 
mechanism used to institute it. Where a subsidy is not bestowed 
pursuant to a statute, regulation or decree, Commerce may find no 
likelihood of continued or recurring subsidization if the subsidy in 
question was a one-time, company-specific occurrence that was not 
part of a broader government program.'').
---------------------------------------------------------------------------

    Moreover, Commerce would continue its practice of investigating 
terminated programs that potentially provided a benefit during the POI 
or POR. For example, if Commerce was reviewing a company during a POR 
with a calendar year of 2023, but during the underlying CVD 
investigation Commerce found that a program providing grants for the 
purchase of capital equipment was terminated in 2016, Commerce might 
still include this terminated program in the 2023 administrative review 
if the AUL, and therefore the benefit stream of the grant, lasted to or 
beyond the review period. Depending on the AUL, under this practice 
Commerce would continue to include that program in all future 
administrative reviews until the non-recurring benefit was fully 
allocated.
    In the place of the removed Sec.  351.526, Commerce proposes adding 
a new regulation which would address subsidy extinguishment from 
changes in ownership. Section 771(5)(f) of the Act provides that a 
change in ownership of all or part of a foreign enterprise or the 
productive assess of a foreign enterprise does not, by itself, require 
a determination that a past countervailable subsidy received by the 
enterprise no longer continues to be countervailable, even if the 
change in ownership is accomplished through an arm's length 
transaction. The SAA explained that ``the term `arm's-length 
transaction' means a transaction negotiated between unrelated parties, 
each acting in its own interest, or between related parties such that 
the terms of the transaction are those that would exist if the 
transaction had been negotiated between unrelated parties.'' \206\ In 
addition, the SAA stated that ``[s]ection 771(5)(F) is being added to 
clarify that the sale of a firm at arm's length does not automatically, 
and in all cases, extinguish any prior subsidies conferred'' because 
the ``issue of the privatization of a state-owned firm can be extremely 
complex and multifaceted.'' \207\
---------------------------------------------------------------------------

    \206\ See SAA, at 258.
    \207\ Id. (``While it is the Administration's intent that 
Commerce retain the discretion to determine whether, and to what 
extent, the privatization of a government-owned firm eliminates any 
previously conferred countervailable subsidies, Commerce must 
exercise this discretion carefully through its consideration of the 
facts of each case and its determination of the appropriate 
methodology to be applied.'').
---------------------------------------------------------------------------

    Consistent with the Act and SAA, and against a broader background 
of domestic litigation and WTO dispute settlement findings, in 2003 
Commerce published a modification to its change-in-ownership 
methodology for sales by a government to private buyers (i.e., 
privatizations).\208\ In a subsequent CVD proceeding in 2004 involving 
pasta from Italy, Commerce extended that methodology to address sales 
by a private seller to a private buyer (private-to-private sales).\209\ 
The agency has implemented the methodology set forth in Pasta From 
Italy in numerous CVD proceedings since.
---------------------------------------------------------------------------

    \208\ See Notice of Final Modification of Agency Practice Under 
Section 123 of the Uruguay Round Agreements Act, 68 FR 37125 (June 
23, 2003) (Final Modification).
    \209\ See Certain Pasta from Italy: Final Results of the Seventh 
Countervailing Duty Administrative Review, 69 FR 70657 (December 7, 
2004) (Pasta from Italy), and accompanying IDM at 2-5.
---------------------------------------------------------------------------

    Commerce therefore proposes to codify that methodology in proposed 
Sec.  526(a), which would establish the presumption that non-recurring 
subsidies continue to benefit a recipient in full over an allocation 
period determined consistent with Commerce's regulations,\210\ 
notwithstanding an intervening change in ownership. However, under 
proposed Sec.  351.526(b), the recipient would be able to rebut the 
presumption of the existence of the subsidy by demonstrating with 
sufficient evidence that a change in ownership occurred in which the 
seller sold all (or substantially all) of its company assets, retained 
no control of the company and its assets, and, in the case of 
government-to-private sales, that the sale was either at an arm's 
length transaction for fair market value, or, in the case of a private-
to-private sale, was an arm's-length transaction and no one 
demonstrated that the sale was not for fair market value.
---------------------------------------------------------------------------

    \210\ See 19 CFR 351.524.
---------------------------------------------------------------------------

    Proposed Sec.  351.526(b)(2) and (3) sets forth the factors 
Commerce would consider in determining whether the transactions at 
issue were conducted at arm's-length and for fair market value. In 
determining if the transactions were for fair market value, proposed 
Sec.  351.526(b)(3)(ii) would set forth a non-exhaustive list of 
considerations including: (1) whether the seller performed or obtained 
an objective analysis in determining the appropriate sales price and 
implemented recommendations pursuant to an objective analysis for 
maximizing its return on the sale; (2) whether the seller imposed 
restrictions on foreign purchasers or purchased from other industries, 
overly burdensome or unreasonable bidder qualification requirements, or 
any other restrictions that artificially suppressed the demand for or 
the purchase price of the company; (3) whether the seller accepted the 
highest bid reflecting the full amount that the company or its assets 
were actually worth under the prevailing market conditions and whether 
the final purchase price was paid through monetary or close equivalent 
compensation; and (4) whether there were price discounts or other 
inducements in exchange for promises of additional future investment 
that private, commercial sellers would not normally seek and, if so, 
whether such committed investment requirements were a barrier to entry 
or in any way distorted the value that bidders were willing to pay.
    Proposed Sec.  351.526(b)(4) states that Commerce would not find 
the presumption of continued benefits during the POR to be rebutted if 
an interested party has demonstrated that, at the time of the change in 
ownership, the broader market conditions necessary for the transaction 
price to accurately reflect the subsidy benefit were not present or 
were severely distorted by government action or inaction such that the 
transaction price was meaningfully different from what it would have 
been absent the distortive government action or inaction. Proposed 
Sec.  351.526(b)(i) and (ii) would provide that Commerce may consider 
certain fundamental conditions and legal and fiscal incentives provided 
by the government in reaching this determination.

[[Page 57322]]

    Finally, proposed Sec.  351.526(c) addresses the situation in which 
an interested party has rebutted the presumption of continued benefits 
during the POR. In that case, the full amount of pre-transaction 
subsidy benefits, including the benefits of any concurrent subsidy 
meeting certain criteria, would be found to be extinguished and 
therefore not countervailable. Under proposed Sec.  351.526(c)(2), 
concurrent subsidies would be defined as ``subsidies given to 
facilitate, encourage, or that are otherwise bestowed concurrent with a 
change in ownership.'' The same provision provides three criteria that 
Commerce normally would consider in determining if the value of a 
concurrent subsidy has been fully reflected in the fair market value 
prices of an arm's-length change in ownership and is therefore fully 
extinguished.

28. Modifications to Four Provisions to Address Cross-Reference Changes 
Pursuant to This Proposed Rule--Sec. Sec.  351.104(a)(2)(iii), 
351.214(1)(1), 351.214(l)(3)(iii), 351.301(c)(1), and 351.302(d)(1)(ii)

    Commerce proposes updating the following provisions to bring them 
into accordance with the proposed regulatory language:
     In Sec.  351.104(a)(2)(iii), revise the citation from 
Sec.  351.204(d) to Sec.  351.109(h);
     In Sec.  351.214(l)(1) revise the citation from Sec.  
351.204(d) to Sec.  351.109(h);
     In Sec.  351.214(l)(3)(iii), revise the citation from 
Sec.  351.204(e)(1) to Sec.  351.107(c)(3)(ii);
     In 351.301(c)(1), revise the citation from Sec.  
351.204(d)(2) to 351.109(h)(2);
     In Sec.  351.302(d)(1)(ii), revise the citation from Sec.  
351.204(d)(2) to Sec.  351.109(h)(2).

Classifications

Executive Order 12866

    The Office of Management and Budget has determined that this 
proposed rule is significant for purposes of Executive Order 12866.

Executive Order 13132

    This proposed rule does not contain policies with federalism 
implications as that term is defined in section 1(a) of Executive Order 
13132 of August 4, 1999, 64 FR 43255 (August 10, 1999)).

Paperwork Reduction Act

    This proposed rule does not contain a collection of information 
subject to the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.

Regulatory Flexibility Act

    The Chief Counsel for Regulation has certified to the Chief Counsel 
for Advocacy of the Small Business Administration under the provisions 
of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that the proposed 
rule would not have a significant economic impact on a substantial 
number of small business entities. A summary of the need for, 
objectives of, and legal basis for this rule is provided in the 
preamble and is not repeated here.
    The entities upon which this rulemaking could have an impact 
include foreign governments, foreign exporters and producers, some of 
whom are affiliated with U.S. companies, and U.S. importers. 
Enforcement and Compliance currently does not have information on the 
number of these entities that would be considered small under the Small 
Business Administration's size standards for small businesses in the 
relevant industries. However, some of the entities may be considered 
small entities under the appropriate industry size standards. Although 
this proposed rule may indirectly impact small entities that are 
parties to individual AD and CVD proceedings, it would not have a 
significant economic impact on any such entities because the proposed 
rule clarifies and establishes streamlined procedures for 
administrative enforcement actions; it does not impose any significant 
costs on regulated entities. Therefore, the proposed rule would not 
have a significant economic impact on a substantial number of small 
entities. For this reason, an Initial Regulatory Flexibility Analysis 
is not required and one has not been prepared.

List of Subjects in 19 CFR Part 351

    Administrative practice and procedure, Antidumping, Business and 
industry, Confidential business information, Countervailing duties, 
Freedom of information, Investigations, Reporting and recordkeeping 
requirements.

    Dated: July 3, 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.

    For the reasons stated in the preamble, the U.S. Department of 
Commerce proposes to amend 19 CFR part 351 as follows:

PART 351--ANTIDUMPING AND COUNTERVAILING DUTIES

0
1. The authority citation for 19 CFR part 351 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 1202 note; 19 U.S.C. 1303 
note; 19 U.S.C. 1671 et seq.

0
2. Revise the heading to Subpart A to read as follows:

Subpart A--Scope, Definitions, the Record of Proceedings, Cash 
Deposits, Nonmarket Economy Antidumping Rates, All-Others Rate, and 
Respondent Selection

* * * * *
0
3. In Sec.  351.104, revise paragraphs (a)(2)(iii) and (a)(7) to read 
as follows:


Sec.  351.104   Record of proceedings.

    (a) * * *
    (2) * * *
    (iii) In no case will the official record include any document that 
the Secretary rejects as untimely filed or any unsolicited 
questionnaire response unless the response is a voluntary response 
accepted under Sec.  351.109(h) (see Sec.  351.302(d)).
* * * * *
    (7) Special rules for public versions of documents originating with 
the Department with no associated ACCESS barcode numbers. Public 
versions of documents originating with Commerce in other segments or 
proceedings under paragraph (a)(6)(iii) through (xii) of this section 
but not associated with an ACCESS barcode number, including documents 
issued before the implementation of ACCESS, must be submitted on the 
record in their entirety to be considered by the Secretary in its 
analysis and determinations and are subject to the timing and filing 
restrictions of Sec.  351.301. Preliminary and final issues and 
decision memoranda issued by the Secretary in investigations and 
administrative reviews before the implementation of ACCESS pursuant to 
Sec. Sec.  351.205, 210 and 213 may be cited in full without placing 
the memoranda on the record.
* * * * *
0
4. Revise Sec.  351.107to read as follows:


Sec.  351.107   Cash deposit rates; producer/exporter combination 
rates.

    (a) Introduction. Sections 703(d)(1)(B), 705(d), 733(d)(1)(B), and 
735(c) of the Act direct the Secretary to order the posting of cash 
deposits, as determined in preliminary and final determinations of 
antidumping and countervailing duty investigations, and additional 
provisions of the Act, including section 751, direct the

[[Page 57323]]

Secretary to establish a cash deposit rate in accordance with various 
reviews. This section covers the establishment of cash deposit rates 
and the instructions which the Secretary issues to U.S. Customs and 
Border Protection to collect those cash deposits.
    (b) In general. The Secretary will instruct U.S. Customs and Border 
Protection to suspend liquidation of merchandise subject to an 
antidumping duty or countervailing duty proceeding and apply cash 
deposit rates determined in that proceeding to all imported merchandise 
for which a cash deposit rate was determined by the Secretary in 
proportion to the estimated value of the merchandise as reported to 
U.S. Customs and Border Protection on an ad valorem basis.
    (c) Exceptions--(1) Application of cash deposit rates on a per-unit 
basis. If the Secretary determines that the information normally used 
to calculate an ad valorem cash deposit rate is not available or the 
use of an ad valorem cash deposit rate is otherwise not appropriate, 
the Secretary may instruct U.S. Customs and Border Protection to apply 
the cash deposit rate on a per-unit basis. Units to which a cash 
deposit rate may be applied include, but are not limited to, weight, 
length, volume, packaging, and individual units of the product itself.
    (2) Application of cash deposit rates to producer/exporter 
combinations. The Secretary may instruct U.S. Customs and Border 
Protection to apply a determined cash deposit rate only to imported 
merchandise both produced by an identified producer and exported by an 
identified exporter if the Secretary determines that such an 
application is appropriate. Such an application is called a producer/
exporter combination.
    (i) Example. Exporter A exports to the United States subject 
merchandise produced by Producers W, X, and Y. In such a situation, the 
Secretary may establish a cash deposit rate applied to Exporter A that 
is limited to merchandise produced by Producers W, X, and Y. If 
Exporter A begins to export subject merchandise produced by Producer Z, 
that cash deposit rate would not apply to subject merchandise produced 
by Producer Z.
    (ii) In general. The Secretary will instruct U.S. Customs and 
Border Protection to apply a cash deposit rate to a producer/exporter 
combination or combinations when the cash deposit rate is determined as 
follows:
    (A) Pursuant to a new shipper review, in accordance with section 
751(a)(2)(B) of the Act and Sec.  351.214;
    (B) Pursuant to an antidumping investigation of merchandise from a 
nonmarket economy country, in accordance with sections 733 and 735 of 
the Act and Sec. Sec.  351.205 and 210, for merchandise exported by an 
examined exporter;
    (C) Pursuant to scope, circumvention, and covered merchandise 
segments of the proceeding, in accordance with Sec. Sec.  351.225(m), 
351.226(m) and 351.227(m), when the Secretary makes a segment-specific 
determination on the basis of a producer/exporter combination; and
    (D) Additional segments of a proceeding in which the Secretary 
determines that the application of a cash deposit rate to a producer/
exporter combination is warranted based on facts on the record.
    (3) Exclusion from an antidumping or countervailing duty order--(i) 
Preliminary determinations. In general, in accordance with sections 
703(b) and 733(b) of the Act, if the Secretary makes an affirmative 
preliminary antidumping or countervailing duty determination and the 
Secretary preliminarily determines an individual weighted-average 
dumping margin or individual net countervailable subsidy rate of zero 
or de minimis for an investigated exporter or producer, the exporter or 
producer will not be excluded from the preliminary determination or the 
investigation. However, the Secretary will not instruct U.S. Customs 
and Border Protection to suspend liquidation of entries or collect cash 
deposits on the merchandise produced and exported from the producer/
exporter combinations examined in the investigation and identified in 
the Federal Register, as the investigated combinations will not be 
subject to provisional measures under sections 703(d) or 733(d) of the 
Act.
    (ii) Final determinations. In general, in accordance with sections 
705(a), 735(a), 706(a), and 736(a) of the Act, if the Secretary makes 
an affirmative final determination, issues an antidumping or 
countervailing duty order and determines an individual weighted-average 
dumping margin or individual net countervailable subsidy rate of zero 
or de minimis for an investigated producer or exporter, the Secretary 
will exclude from the antidumping or countervailing duty order only 
merchandise produced and exported in the producer/exporter combinations 
examined in the investigation and identified in the Federal Register. 
An exclusion applicable to a producer/exporter combination shall not 
apply to resellers. Excluded producer/exporter combinations may include 
transactions in which the exporter is both the producer and exporter, 
transactions in which the producer's merchandise has been exported to 
the United States through multiple exporters individually examined in 
the investigation, and transactions in which the exporter has sourced 
from multiple producers identified in the investigation.
    (iii) Example. If during the period of investigation, Exporter A 
exports to the United States subject merchandise produced by Producer 
X, based on an examination of Exporter A the Secretary may determine 
that the dumping margins with respect to the examined merchandise are 
de minimis. In that case, the Secretary would normally exclude only 
subject merchandise produced by Producer X and exported by Exporter A. 
If Exporter A began to export subject merchandise produced by Producer 
Y, that merchandise would be subject to the antidumping duty order.
    (4) Certification requirements. If the Secretary determines that 
parties must maintain or provide a certification in accordance with 
Sec.  351.228, the Secretary may instruct U.S. Customs and Border 
Protection to apply a cash deposit requirement that is based on the 
facts of the case and effectuates the administration and purpose of the 
certification.
    (d) The antidumping duty order cash deposit hierarchies. (1) In 
general. If the Secretary has not previously established a combination 
cash deposit rate under paragraph (c)(2) of this section for the 
producer and exporter in question, the following will apply:
    (i) A market economy country proceeding. In a proceeding covering 
merchandise produced in a market economy country:
    (A) If the Secretary has established a current cash deposit rate 
for the exporter of the subject merchandise, the Secretary will 
instruct U.S. Customs and Border Protection to apply the cash deposit 
rate established for the exporter to entries of the subject 
merchandise;
    (B) If the Secretary has not established a current cash deposit 
rate for the exporter, but the Secretary has established a current cash 
deposit rate for the producer of the subject merchandise, the Secretary 
will instruct U.S. Customs and Border Protection to apply the cash 
deposit rate established for the producer of the subject merchandise to 
entries of the subject merchandise; and
    (C) If the Secretary has not established a current cash deposit 
rate for either the producer or the exporter of the subject 
merchandise, the Secretary will instruct U.S. Customs and Border 
Protection to apply the all-others rate determined in the investigation 
to entries of the subject

[[Page 57324]]

merchandise, pursuant to section 735(c) of the Act and Sec.  
351.109(f).
    (ii) A nonmarket economy country proceeding. In a proceeding 
covering merchandise originating from a nonmarket economy country:
    (A) If the Secretary has established a current separate cash 
deposit rate for the exporter of the subject merchandise, the Secretary 
will instruct U.S. Customs and Border Protection to apply the cash 
deposit rate for the exporter to entries of the subject merchandise;
    (B) If the Secretary has not established a current separate cash 
deposit rate for an exporter of the subject merchandise, the Secretary 
will instruct U.S. Customs and Border Protection to apply the cash 
deposit rate determined by the Secretary for the nonmarket economy 
entity to entries of the subject merchandise, pursuant to Sec.  
351.108(b); and
    (C) If the entries of subject merchandise were resold to the United 
States through a third-country reseller, the Secretary will normally 
instruct U.S. Customs and Border Protection to apply the current 
separate cash deposit rate applicable to the nonmarket economy country 
exporter (or the applicable producer/exporter combination, if 
warranted) that supplied the subject merchandise to the reseller to 
those entries of the subject merchandise.
    (2) Exception. If the Secretary determines that an application of 
cash deposit rates other than that described in paragraph (d)(1) of 
this section to particular producers or exporters is warranted, the 
Secretary may instruct U.S. Customs and Border Protection to use an 
alternative methodology in applying those cash deposit rates to entries 
of subject merchandise.
    (e) The countervailing duty order cash deposit hierarchy. (1) In 
general. If the Secretary has not previously established a combination 
cash deposit rate under paragraph (c)(2) of this section for the 
producer and exporter in question and the exporter and producer have 
differing cash deposit rates, the following will apply:
    (i) If the Secretary has established current cash deposit rates for 
both the producer and the exporter of the subject merchandise, the 
Secretary will instruct U.S. Customs and Border Protection to apply the 
higher of the two rates to the entries of subject merchandise;
    (ii) If the Secretary has established a current cash deposit rate 
for the producer but not the exporter of the subject merchandise, the 
Secretary will instruct U.S. Customs and Border Protection to apply the 
producer's cash deposit rate to entries of subject merchandise;
    (iii) If the Secretary has established a current cash deposit rate 
for the exporter but not the producer of the subject merchandise, the 
Secretary will instruct U.S. Customs and Border Protection to apply the 
exporter's cash deposit rate to entries of subject merchandise; and
    (iv) If the Secretary has not established current cash deposit 
rates for either the producer or the exporter of the subject 
merchandise, the Secretary will instruct U.S. Customs and Border 
Protection to apply the all-others rate determined in the investigation 
pursuant to section 705(c)(5) of the Act and Sec.  351.109(f) to the 
entries of subject merchandise.
    (2) Exception. If the Secretary determines that an application of 
cash deposit rates other than that described in paragraph (e)(1) of 
this section to particular producers or exporters is warranted, the 
Secretary may instruct U.S. Customs and Border Protection to use an 
alternative methodology in applying those cash deposit rates to the 
entries of subject merchandise.
    (f) Effective dates for amended preliminary and final 
determinations and results of review upon correction of a ministerial 
error. If the Secretary amends an agency determination in accordance 
with sections 703, 705(e), 733 and 735(e) of the Act and Sec. Sec.  
351.224 (e) through (g):
    (1) If the Secretary amends a preliminary or final determination in 
an investigation for a ministerial error and the amendment increases 
the dumping margin or countervailing duty rate, the new cash deposit 
rate will be effective to entries made on or after the date of 
publication of the amended determination;
    (2) If the Secretary amends a preliminary or final determination in 
an investigation for a ministerial error and the amendment decreases 
the dumping margin or countervailing duty rate, the new cash deposit 
rate will be retroactive to the date of publication of the original 
preliminary or final determination, as applicable;
    (3) If the Secretary amends the final results of an administrative 
review pursuant to a ministerial error, the effective date of the 
amended cash deposit rate will be retroactive to entries following the 
date of publication of the original final results of administrative 
review regardless of whether the antidumping duty margin or 
countervailing duty rate increases or decreases; and
    (4) If the Secretary amends the final results of an investigation 
or administrative review pursuant to litigation involving alleged or 
disputed ministerial errors, the effective date of the amended cash 
deposit rate may differ from the effective dates resulting from the 
application of paragraphs (f)(1) through (f)(3) of this section and 
normally will be identified in a Federal Register notice.
0
5. Add Sec.  351.108 to subpart A to read as follows:


Sec.  351.108   Rates for entities from nonmarket economies in 
antidumping proceedings.

    (a) Introduction. When the Secretary determines that a country is a 
nonmarket economy country in an antidumping proceeding pursuant to 
section 771(18) of the Act, the Secretary may determine that all 
entities located in that nonmarket economy country are subject to 
government control and thus part of a single, government-controlled 
entity. All entities determined by the Secretary to be part of the 
government-controlled entity will be assigned the antidumping cash 
deposit or assessment rate applied to the government-controlled entity. 
That rate is called the nonmarket economy entity rate.
    (b) Separate rates. An entity may receive its own rate, separate 
from the nonmarket economy entity rate, if it demonstrates on the 
record to the Secretary that its particular activities operate 
sufficiently independent from government control to justify the 
application of a separate rate. In determining whether an entity 
operates its particular activities sufficiently independent from 
government control to receive a separate rate, the Secretary will 
normally consider the following:
    (1) Government ownership and control. When a government, at a 
national, provincial, or other level, holds an ownership share of an 
entity, either directly or indirectly, the level of ownership and other 
factors may indicate that the government exercises or has the potential 
to exercise control over an entity's general operations. No separate 
rate will be applied when the government either directly or indirectly 
holds:
    (i) A majority ownership share (over fifty percent ownership) of an 
entity; or
    (ii) An ownership interest in the entity of fifty percent or less 
and any one of the following criteria applies:
    (A) The government's ownership share provides it with a 
disproportionately larger degree of influence or control over the 
entity's production and commercial decisions than the ownership share 
would normally entail, and the Secretary determines that the degree of 
influence or control is significant;

[[Page 57325]]

    (B) The government has the authority to veto or control the 
entity's production and commercial decisions;
    (C) Officials, employees, or representatives of the government have 
been appointed as officers of the entity, members of the board of 
directors, or other governing authorities in the entity that have the 
ability to make or influence production and commercial decisions for 
the entity; or
    (D) The entity is obligated by law or its foundational documents, 
such as articles of incorporation, or other de facto requirements to 
maintain one or more officials, employees, or representatives of the 
government as officers, members of the board of directors, or other 
governing authorities in the entity that have the ability to make or 
influence production and commercial decisions for the entity.
    (2) Absence of de jure government control. If an entity 
demonstrates that neither Sec.  351.108(b)(1)(i) nor Sec.  
351.108(b)(1)(ii) applies to the entity, the entity must then 
demonstrate that the government has no control in law (de jure) of the 
entity's export activities. The following criteria may indicate the 
lack of government de jure control of the entity's export activities:
    (i) The absence of a legal requirement that one or more officials, 
employees, or representatives of the government serve as officers of 
the entity, members of the board of directors, or other governing 
authorities in the entity that make or influence export activity 
decisions;
    (ii) The absence of restrictive stipulations by the government 
associated with an entity's business and export licenses;
    (iii) Legislative enactments decentralizing government control of 
entities; and
    (iv) Other formal measures by the government decentralizing control 
of companies.
    (3) Absence of de facto government control. If the entity 
demonstrates that Sec. Sec.  351.108(b)(1)(i) and (ii) and (b)(2) do 
not apply to the entity, the entity must then demonstrate that the 
government has no control in fact (de facto) of the entity's export 
activities. The following criteria may indicate the lack of de facto 
government control of the entity's export activities:
    (i) Whether the entity must maintain one or more officials, 
employees, or representatives of the government as officers, members of 
the board of directors, or other governing authorities in the entity 
which have the ability to make or influence export activity decisions;
    (ii) Whether export prices are set by or are subject to the 
approval of a government agency;
    (iii) Whether the entity has authority to negotiate and sign 
contracts and other agreements without government involvement;
    (iv) Whether the entity has autonomy from the government in making 
decisions regarding the selection of its management;
    (v) Whether the entity retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses; and
    (vi) Whether there is any additional evidence on the record 
suggesting that the government has no direct or indirect influence over 
the entity's export activities.
    (c) Entities wholly owned by foreign entities incorporated and 
headquartered in a market economy. In general, if the Secretary 
determines that an entity located in a nonmarket economy and subject to 
a nonmarket economy country antidumping proceeding is wholly owned by a 
foreign entity both incorporated and headquartered in a market economy 
country or countries, then the Secretary will consider the entity 
independent from control of the nonmarket economy government and an 
analysis under paragraph (b) of this section will not be necessary.
    (d) Separate Rate Applications and Certifications. In order to 
demonstrate separate rate eligibility, an entity subject to a nonmarket 
economy country antidumping proceeding will be required to timely 
submit a separate rate application, as made available by the Secretary, 
or a separate rate certification, as applicable:
    (1) In an antidumping investigation, the entity will normally file 
a separate rate application on the record of the investigation no later 
than fourteen days following publication of the notice of initiation in 
the Federal Register;
    (2) In a new shipper review or an administrative review in which 
the entity has not been previously assigned a separate rate, the entity 
will normally file a separate rate application on the record no later 
than fourteen days following publication of the notice of initiation in 
the Federal Register. In both new shipper reviews and administrative 
reviews, documentary evidence of an entry of subject merchandise for 
which liquidation was suspended during the period of review must 
accompany the separate rate application.
    (3) In an administrative review, if the entity has been previously 
assigned a separate rate in the proceeding, no later than fourteen days 
following publication of the notice of initiation in the Federal 
Register, the entity will instead file a certification on the record in 
which the entity certifies that it had entries of subject merchandise 
for which liquidation was suspended during the period of review and 
that it otherwise continues to meet the criteria for obtaining a 
separate rate. If the Secretary determined in a previous segment of the 
proceeding that certain exporters and producers should be treated as a 
single entity for purposes of the antidumping proceeding, then a 
certification filed under this paragraph must identify and certify that 
that the certification applies to all of the companies comprising that 
single entity.
    (e) Examined Respondents and Questionnaire Responses. Entities that 
submit separate rate applications or certifications and are 
subsequently selected to be an examined respondent in an investigation 
or review by the Secretary must fully respond to the Secretary's 
questionnaires in order to be eligible for separate rate status.
* * * * *
0
6. Add Sec.  351.109 to subpart A to read as follows:


Sec.  351.109   Selection of examined respondents; single-country 
subsidy rate; calculating an all-others rate; calculating rates for 
unexamined respondents; voluntary respondents.

    (a) Introduction. Sections 777A(c)(2) and 777A(e)(2)(A) of the Act 
provide that when the Secretary determines in an antidumping or 
countervailing duty investigation or administrative review that it is 
not practicable to determine individual dumping margins or 
countervailable subsidy rates for all potential respondents, the 
Secretary may determine individual dumping margins or countervailable 
subsidy rates for a reasonable number of exporters or producers using 
certain criteria set out in the Act. This section sets forth those 
criteria, describes the methodology the Secretary generally applies to 
select examined producers and exporters, and provides the means by 
which the Secretary determines the ``all-others rate'' set forth in 
sections 705(c)(5) and 735(c)(5) of the Act, separate rates in 
nonmarket economy antidumping proceedings, and review-specific margins 
or rates in administrative reviews. This section also addresses the 
treatment of voluntary respondents in accordance with section 782(a) of 
the Act.
    (b) Examining each known exporter or producer when practicable. In 
an investigation or administrative review, the Secretary will 
determine, where

[[Page 57326]]

practicable, an individual weighted-average dumping margin or 
individual countervailable subsidy rate for each known exporter or 
producer of the subject merchandise.
    (c) Limiting exporters or producers examined. (1) In general. If 
the Secretary determines in an investigation or administrative review 
that it is not practicable to determine individual dumping margins or 
countervailable subsidy rates because of the large number of exporters 
or producers involved in the investigation or review, the Secretary may 
determine individual margins or rates for a reasonable number of 
exporters or producers, In accordance with sections 777A(c)(2) and 
777A(e)(2)(A) of the Act, the Secretary will normally limit the 
examination to either a sample of exporters or producers that the 
Secretary determines is statistically valid based on record information 
or exporters and producers accounting for the largest volume of the 
subject merchandise from the exporting country that the Secretary 
determines can be reasonably examined.
    (2) Limiting examination to the largest exporters or producers. In 
general, if the Secretary determines to limit the number of exporters 
or producers for individual examination, otherwise known as 
respondents, based on the largest volume of the subject merchandise 
from the exporting country that the Secretary determines can be 
reasonably examined, the Secretary will apply the following 
methodology:
    (i) Selecting the data source to determine the largest exporters or 
producers of subject merchandise. The Secretary will normally select 
respondents based on data for entries of subject merchandise made 
during the relevant time period derived from U.S. Customs and Border 
Protection. If the Secretary determines that the use of the U.S. 
Customs and Border Protection data source is not appropriate based on 
record information, the Secretary may use another reasonable means of 
selecting potential respondents in an investigation or review 
including, but not limited to, the use of quantity and value 
questionnaire responses derived from a list of possible exporters of 
subject merchandise.
    (ii) Selecting the largest exporters or producers of subject 
merchandise based on volume or value. The Secretary will normally 
select the largest exporters or producers based on the volume of 
imports of subject merchandise. However, the Secretary may determine at 
times that volume data are unreliable or inconsistent, depending on the 
product at issue. In those situations, the Secretary may instead select 
the largest exporters of subject merchandise based on the value of the 
imported products instead of the volume of the imported products.
    (iii) Determining whether the number of exporters or producers is 
too large to make individual examination of each known exporter or 
producer of subject merchandise practicable. The Secretary will 
determine on a case-specific basis whether the number of exporters or 
producers is too large to make individual examination of each known 
exporter or producer of subject merchandise practicable based on the 
potential exporters or producers identified in a petition, the 
exporters or producers identified in the data source considered in 
paragraph (c)(1) of this provision, or the exporters or producers for 
which an administrative review is requested. In determining whether the 
number of exporters or producers is too large to make individual 
examination of each known exporter or producer of subject merchandise 
practicable, the Secretary will normally consider:
    (A) The amount of resources and detailed analysis which will be 
necessary to examine each potential respondent's information;
    (B) The current and future workload of the office administering the 
antidumping or countervailing duty proceeding; and
    (C) The Secretary's overall current resource availability.
    (iv) Determining the number of exporters or producers that can be 
reasonably examined. In determining the number of exporters or 
producers (respondents) that can be reasonably examined on a case-
specific basis, the Secretary will normally:
    (A) Consider the total and relative volumes (or values) of entries 
of subject merchandise during the relevant period for each potential 
respondent derived from the data source considered in paragraph (c)(2) 
of this section;
    (B) Rank the potential respondents by the total volume (or values) 
of entries into the United States during the relevant period; and
    (C) Determine the number of exporters or producers the Secretary 
can reasonably examine, considering resource availability and statutory 
requirements, and select the exporters or producers with the largest 
volume (or values) of entries consistent with that number.
    (v) Selecting additional respondents for examination. Once the 
Secretary has determined the number of exporters or producers that can 
be reasonably examined and has selected the potential respondents for 
examination, the Secretary will issue questionnaires to those selected 
exporters or producers. If a potential respondent does not respond to 
the questionnaires or elects to withdraw from participation in the 
segment of the proceeding soon after filing questionnaire responses, or 
the Secretary otherwise determines early in the segment of the 
proceeding that a selected exporter or producer is no longer 
participating in the investigation or administrative review or that the 
exporter's or producer's sales of subject merchandise are not bona 
fide, the Secretary may select the exporter or producer with the next 
largest volume or value of entries to replace the respondents initially 
selected by the Secretary for examination.
    (d) Waiver for certain selected respondents. The Secretary may 
waive individual examination of an exporter or producer selected to be 
an examined respondent if both the selected respondent and the 
petitioner file waiver requests for that selected respondent no later 
than five days after the Secretary has selected respondents. If the 
Secretary provides such a waiver and previously selected the waived 
respondent in accordance with paragraph (c)(2) of this section, the 
Secretary may select the respondent with the next largest volume or 
value of entries for examination to replace the initially selected 
respondent.
    (e) Single country-wide subsidy rate. In accordance with 
777A(e)(2)(B) of the Act, in limiting exporters or producers examined 
in countervailing duty proceedings, including countervailing duty 
investigations under sections 703(d)(1)(A)(ii) and 705 (c)(5)(B) of the 
Act, the Secretary may determine, in the alternative, a single country-
wide subsidy rate to be applied to all exporters and producers.
    (f) Calculating the all-others rate. In accordance with sections 
705(c)(1)(B), 705(c)(5), 735(c)(1)(B)(i), and 735(c)(5) of the Act, if 
the Secretary makes an affirmative antidumping or countervailing duty 
determination, the Secretary will determine an estimated all-others 
rate as follows:
    (1) In general. (i) For an antidumping proceeding involving a 
market economy country, the all-others rate will normally equal the 
weighted average of the estimated weighted-average dumping margins 
established for the individually investigated exporters or producers, 
excluding any zero and de minimis margins and any margins determined 
entirely under section 776 of the Act.
    (ii) For a countervailing duty proceeding, the all-others rate will 
normally equal the weighted average of the countervailable subsidy 
rates

[[Page 57327]]

established for the individually investigated exporters and producers, 
excluding any zero and de minimis countervailable subsidy rates and any 
rates determined entirely under section 776 of the Act.
    (2) Exceptions to the general rules for calculating the all-others 
rate. The Secretary may determine not to apply the general rules 
provided in paragraph (f)(1) of this section:
    (i) If the Secretary determines that only one individually 
investigated exporter or producer has a calculated weighted-average 
dumping margin or countervailable subsidy rate that is not zero, de 
minimis, or determined entirely under section 776 of the Act, the 
Secretary may apply that weighted-average dumping margin or 
countervailable subsidy rate as the all-others rate.
    (ii) If the Secretary determines that weight-averaging calculated 
dumping margins or countervailable subsidy rates established for 
individually investigated exporters or producers could result in the 
inadvertent release of proprietary information among the individually 
investigated exporters or producers, the Secretary may apply the 
following analysis:
    (A) First, the Secretary will calculate the weighted-average 
dumping margin or countervailable subsidy rate for the individually 
investigated exporters or producers using their reported data, 
including business proprietary data;
    (B) Second, the Secretary will calculate both a simple average of 
the individually investigated exporters' or producers' dumping margins 
or countervailable subsidy rates and a weighted-average dumping margin 
or countervailable subsidy rate using the individually investigated 
exporters' or producers' publicly-ranged data; and
    (C) Third, the Secretary will compare the two averages calculated 
in paragraph (f)(2)(ii)(B) of this section with the weighted-average 
margin or rate determined in paragraph (f)(2)(ii)(A) of this section. 
The Secretary will apply, as the all-others rate, the average 
calculated in paragraph (f)(2)(ii)(B) of this section which is 
numerically the closest to the margin or rate calculated in paragraph 
(f)(2)(ii)(A) of this section.
    (iii) If the estimated weighted average dumping margins or 
countervailable subsidy rates established for all individually 
investigated exporters and producers are zero, de minimis, or 
determined entirely under section 776 of the Act, the Secretary may use 
any reasonable method to establish an all-others rate for exporters and 
producers not individually examined, including averaging the estimated 
weighted average dumping margins or countervailable subsidy rates 
determined for the individually investigated exporters and producers.
    (3) A nonmarket economy country entity rate is not an all-others 
rate. The all-others rate determined in a market economy antidumping 
investigation or countervailing duty investigation may not be increased 
in subsequent segments of a proceeding. The rate determined for a 
nonmarket economy country entity determined in an investigation is not 
an all-others rate and may be modified in subsequent segments of a 
proceeding if selected for examination.
    (g) Calculating a rate for unexamined exporters and producers. In 
determining a separate rate in an investigation or administrative 
review covering a nonmarket economy country pursuant to Sec.  
351.108(b), a margin for unexamined exporters and producers in an 
administrative review covering a market economy country, or a 
countervailable subsidy rate for unexamined exporters and producers in 
a countervailing duty administrative review, the Secretary will 
normally apply the methodology set forth in paragraphs (f)(1) and (2) 
of this section. If the Secretary determines that weight-averaging 
calculated dumping margins or countervailable subsidy rates established 
for individually investigated exporters or producers could result in 
the inadvertent release of proprietary information among the 
individually examined exporters or producers, then the Secretary may 
establish a separate rate, review-specific margin, or countervailable 
subsidy rate using a reasonable method other than the weight-averaging 
of dumping margins or countervailable rates, such as the use of a 
simple average of the calculated dumping margins or countervailable 
subsidy rates.
    (h) Voluntary respondents--(1) In general. If the Secretary limits 
the number of exporters or producers to be individually examined under 
sections 777A(c)(2) or 777A(e)(2)(A) of the Act, the Secretary may 
choose to examine voluntary respondents (exporters or producers, other 
than those initially selected for individual examination) in accordance 
with section 782(a) of the Act.
    (2) Acceptance of voluntary respondents. The Secretary will 
determine, as soon as practicable, whether to examine a voluntary 
respondent individually. A voluntary respondent accepted for individual 
examination under paragraph (h)(1) of this section will be subject to 
the same filing and timing requirements as an exporter or producer 
initially selected by the Secretary for individual examination under 
sections 777A(c)(2) or 777A(e)(2)(A) of the Act, and, where applicable, 
the use of the facts available under section 776 of the Act and Sec.  
351.308.
    (3) Requests for voluntary treatment. (i) An interested party 
seeking treatment as a voluntary respondent must so indicate by 
including as a title on the first page of the first submission, 
``Request for Voluntary Respondent Treatment.''
    (ii) If multiple exporters or producers seek voluntary respondent 
treatment and the Secretary determines to examine a voluntary 
respondent individually, the Secretary will select voluntary 
respondents in the chronological order in which complete requests were 
filed correctly on the record.
    (4) Timing of voluntary respondent submissions. The deadlines for 
voluntary respondent submissions will generally be the same as the 
deadlines for submissions by individually investigated respondents. If 
there are two or more individually investigated respondents with 
different deadlines for a submission, such as when one respondent has 
received an extension and the other has not, voluntary respondents will 
normally be required to file their submissions with the Secretary by 
the earliest deadline of the individually investigated respondents.
0
7. In Sec.  351.204:
0
a. Revise the section heading and paragraphs (a), (c), and (d); and
0
b. Remove paragraphs (e).
    The revisions read as follows:


Sec.  351.204   Period of investigation; requests for exclusions from 
countervailing duty orders based on investigations conducted on an 
aggregate basis.

    (a) Introduction. Because the Act does not specify the precise 
period of time that the Secretary should examine in an antidumping or 
countervailing duty investigation, this section sets forth rules 
regarding the period of investigation (``POI''). In addition, this 
section covers exclusion requests in countervailing duty investigations 
conducted on an aggregate basis.
* * * * *
    (c) Limiting exporters or producers examined and voluntary 
respondents. Once the Secretary has initiated the antidumping or 
countervailing duty investigation, the Secretary may determine that it 
is not practicable to examine each known exporter or producer. In 
accordance with Sec.  351.109(c) the Secretary may select a limited 
number of exporters or producers to examine. Furthermore, in

[[Page 57328]]

accordance with section 782(a) of the Act and Sec.  351.109(h), the 
Secretary may determine to examine voluntary respondents.
    (d) Requests for exclusions from countervailing duty orders based 
on investigations conducted on an aggregate basis. When the Secretary 
conducts a countervailing duty investigation on an aggregate basis 
under section 777A(e)(2)(B) of the Act, the Secretary will consider and 
investigate requests for exclusion to the extent practicable. An 
exporter or producer that desires exclusion from an order must submit:
    (i) A certification by the exporter or producer that it received 
zero or de minimis net countervailable subsidies during the period of 
investigation;
    (ii) If the exporter or producer received a countervailable 
subsidy, calculations demonstrating that the amount of net 
countervailable subsidies received was de minimis during the period of 
investigation;
    (iii) If the exporter is not the producer of subject merchandise, 
certifications from the suppliers and producers of the subject 
merchandise that those persons received zero or de minimis net 
countervailable subsidies during the period of investigation; and
    (iv) A certification from the government of the affected country 
that the government did not provide the exporter (or the exporter's 
supplier) or producer with more than de minimis net countervailable 
subsidies during the period of investigation.
0
8. In Sec.  351.212 revise paragraph (b) to read as follows:


Sec.  351.212   Assessment of antidumping and countervailing duties; 
provisional measures deposit cap; interest on certain overpayments and 
underpayments.

* * * * *
    (b) Assessment of antidumping and countervailing duties as the 
result of a review--(1) Antidumping Duties--(i) In general. If the 
Secretary has conducted a review of an antidumping duty order under 
Sec.  351.213 (administrative review), Sec.  351.214 (new shipper 
review), or Sec.  351.214 (expedited antidumping review), the Secretary 
normally will calculate an assessment rate for each importer of subject 
merchandise covered by the review by dividing the dumping margin found 
on the subject merchandise examined by the estimated entered value of 
such merchandise for normal customs duty purposes on an ad valorem 
basis. If the resulting assessment rate is not zero or de minimis, the 
Secretary will then instruct U.S. Customs and Border Protection to 
assess antidumping duties by applying the assessment rate to the 
entered value of the merchandise.
    (ii) Assessment on a per-unit basis. If the Secretary determines 
that the information normally used to calculate an ad valorem 
assessment rate is not available or the use of an ad valorem rate is 
otherwise not appropriate, the Secretary may instruct U.S. Customs and 
Border Protection to assess duties on a per-unit basis. Units on which 
duties may be assessed include, but are not limited to, weight, length, 
volume, packaging, and individual units of the product itself.
* * * * *
0
9. In Sec.  351.213, revise paragraph (f) to read as follows:


Sec.  351.213   Administrative review of orders and suspension 
agreements under section 751(a)(1) of the Act.

* * * * *
    (f) Limiting exporters or producers examined and voluntary 
respondents. Once the Secretary has initiated an antidumping or 
countervailing duty administrative review, the Secretary may determine 
that it is not practicable to examine each known exporter or producer. 
In accordance with Sec.  351.109(c), the Secretary may select a limited 
number of exporters or producers to examine. Furthermore, in accordance 
with section 782(a) of the Act and Sec.  351.109(h), the Secretary may 
determine to examine voluntary respondents.
* * * * *
0
10. In Sec.  351.214, revise the section heading and paragraphs (l)(1) 
and (l)(3)(iii) to read as follows:


Sec.  351.214   New shipper reviews under section 751(a)(2)(B) of the 
Act; expedited reviews in countervailing duty proceedings.

* * * * *
    (l) * * *
    (1) Request for review. If, in a countervailing duty investigation, 
the Secretary limited the number of exporters or producers to be 
individually examined under section 777A(e)(2)(A) of the Act, an 
exporter that the Secretary did not select for individual examination 
or that the Secretary did not accept as a voluntary respondent (see 
Sec.  351.109(h)) may request a review under this paragraph (l). An 
exporter must submit a request for review within 30 days of the date of 
publication in the Federal Register of the countervailing duty order. A 
request must be accompanied by a certification that:
* * * * *
    (3) * * *
    (iii) The Secretary may exclude from the countervailing duty order 
in question any exporter for which the Secretary determines an 
individual net countervailable subsidy rate of zero or de minimis (see 
Sec.  351.107(c)(3)(ii)), provided that the Secretary has verified the 
information on which the exclusion is based.
* * * * *
0
11. In Sec.  351.301, revise paragraphs (b)(2), (c)(1) and (c)(3) to 
read as follows:


Sec.  351.301   Time limits for submission of factual information.

* * * * *
    (b) * * *
    (2) If the factual information is being submitted to rebut, 
clarify, or correct factual information on the record, the submitter 
must provide a written explanation identifying the information which is 
already on the record that the factual information seeks to rebut, 
clarify or correct, including the name of the interested party that 
submitted the information and the date on which the information was 
submitted. The submitter must also provide a narrative summary 
explaining how the factual information provided under this paragraph 
rebuts, clarifies, or corrects the factual information already on the 
record.
    (c) * * *
    (1) Factual information submitted in response to questionnaires. 
During a proceeding, the Secretary may issue to any person 
questionnaires, which includes both initial and supplemental 
questionnaires. The Secretary will not consider or retain in the 
official record of the proceeding unsolicited questionnaire responses, 
except as provided under Sec.  351.109(h)(2), or untimely filed 
questionnaire responses. The Secretary will reject any untimely filed 
or unsolicited questionnaire response and provide, to the extent 
practicable, written notice stating the reasons for rejection (see 
Sec.  351.302(d)).
* * * * *
    (3) * * *
    (i) Antidumping and countervailing duty investigations. (A) All 
submissions of factual information to value factors of production under 
Sec.  351.408(c) in an antidumping investigation are due no later than 
60 days before the schedule date of the preliminary determination.
    (B) All submissions of factual information to measure the adequacy 
of remuneration under Sec.  351.511(a)(2) in a countervailing duty 
investigation are due no later than 45 days before the scheduled date 
of the preliminary determination.
    (ii) Administrative reviews, new shipper reviews, and changed 
circumstances reviews. All submissions of factual information to value 
factors

[[Page 57329]]

under Sec.  351.408(c) or to measure the adequacy of remuneration under 
Sec.  351.511(a)(2) in administrative reviews, new shipper reviews and 
changed circumstances reviews are due no later than 60 days before the 
scheduled date of the preliminary results of review;
* * * * *
0
12. In Sec.  351.302 revise paragraph (d)(1)(ii) to read as follows:


Sec.  351.302   Extension of time limits; return of untimely filed or 
unsolicited material.

* * * * *
    (d) * * *
    (1) * * *
    (ii) Unsolicited questionnaire responses, except as provided for 
voluntary respondents under Sec.  351.109(h)(2).
* * * * *
0
13. In Sec.  351.306 revise paragraph (a)(3) to read as follows:


Sec.  351.306   Use of business proprietary information.

    (a) * * *
    (3) An employee of U.S. Customs and Border Protection directly 
involved in conducting an investigation regarding negligence, gross 
negligence, or fraud relating to an antidumping or countervailing duty 
proceeding:
* * * * *
0
14. In Sec.  351.308 add paragraphs (g) through (i) to read as follows:


Sec.  351.308   Determinations on the basis of the facts available.

* * * * *
    (g) Partial or total facts available. In accordance with section 
776(a) of the Act, if the Secretary determines to apply facts 
available, regardless of the use of an adverse inference under section 
776(b) of the Act, the Secretary may apply facts available to only a 
portion of its antidumping or countervailing duty analysis and 
calculations, referred to as partial facts available, or to all of its 
analysis and calculations, referred to as total facts available, as 
appropriate on a case-specific basis.
    (h) Segment-specific dumping and countervailable subsidy rates. If 
the Secretary has determined dumping margins or countervailable subsidy 
rates in separate segments of the same proceeding in which the 
Secretary is applying facts available, in accordance with section 
776(c)(2) of the Act the Secretary may apply those margins or rates as 
facts available without being required to conduct a corroboration 
analysis.
    (i) Selection of adverse facts available. If the Secretary 
determines to apply adverse facts available, in accordance with 
sections 776(d)(1), (2) and (3) of the Act the following applies:
    (1) In an antidumping proceeding, the Secretary may use a dumping 
margin from any segment of the proceeding as adverse facts, including 
the highest dumping margin available. The Secretary may use the highest 
dumping margin available if the Secretary determines that such an 
application is warranted after evaluating the situation that resulted 
in an adverse inference;
    (2) In a countervailing duty segment of the proceeding, the 
Secretary may use a countervailing subsidy rate applied to the same or 
similar program in a countervailing duty proceeding involving the same 
country or, if there is no same or similar program, use a 
countervailing subsidy rate from a proceeding that the Secretary 
determines is reasonable to use. In accordance with the hierarchy set 
forth in paragraph (j) of this section, the Secretary may use the 
highest countervailing duty rate available if the Secretary determines 
that such an application is warranted after evaluating the situation 
that resulted in an adverse inference; and
    (3) In applying adverse facts available, the Secretary will not be 
required to:
    (i) Estimate what a countervailable subsidy or dumping margin would 
have been if an interested party that was found to have failed to 
cooperate under section 776(b)(1) of the Act had cooperated; or
    (ii) Demonstrate that the countervailable subsidy rate or dumping 
margin used by the Secretary as adverse facts available reflects an 
alleged ``commercial reality'' of the interested party.
* * * * *
0
15. In Sec.  351.309 revise paragraphs (c)(2) and (d)(2) to read as 
follows:


Sec.  351.309   Written argument.

* * * * *
    (c) * * *
    (2) The case brief must present all arguments that continue in the 
submitter's view to be relevant to the Secretary's final determination 
or final results, including any arguments presented before the date of 
publication of the preliminary determination or preliminary results. As 
part of the case brief, parties are requested to provide the following:
    (i) A table of contents listing each issue;
    (ii) A table of authorities, including statutes, regulations, 
administrative cases, dispute panel decisions and court holdings cited; 
and
    (iii) A public executive summary for each argument raised in the 
brief. Executive summaries should be no more than 450 words in length, 
not counting supporting citations.
* * * * *
    (d) * * *
    (2) The rebuttal brief may respond only to arguments raised in case 
briefs and should identify the arguments raised in case briefs and 
should identify the arguments to which it is responding. As part of the 
rebuttal brief, parties are requested to provide the following:
    (i) A table of contents listing each issue;
    (ii) A table of authorities, including statutes, regulations, 
administrative cases, dispute panel decisions and court holdings cited; 
and
    (iii) A public executive summary for each argument raised in the 
rebuttal brief. Executive summaries should be no more than 450 words in 
length, not counting supporting citations.
* * * * *
0
16. In Sec.  351.401, revise paragraph (f) to read as follows:


Sec.  351.401   In general.

* * * * *
    (f) Treatment of affiliated parties in antidumping proceedings. (1) 
In general. In an antidumping proceeding under this part, the Secretary 
will normally treat two or more affiliated parties as a single entity 
if the Secretary concludes that there is a significant potential for 
manipulation of prices, production, or other commercial activities.
    (2) Significant potential for manipulation. In identifying a 
significant potential for the manipulation of price, production or 
other commercial activities, the factors the Secretary may consider for 
all affiliated parties include:
    (i) The level of common ownership;
    (ii) The extent to which managerial employees or board members of 
one firm sit on the board of directors of an affiliated firm; and
    (ii) Whether operations are intertwined, such as through the 
sharing of sales and export information; involvement in production, 
pricing, and other commercial decisions; the sharing of facilities or 
employees; or significant transactions between the affiliated parties.
    (3) Additional considerations for affiliated parties with access to 
production facilities in determining the significant potential for 
manipulation. In determining whether there is a significant potential 
for manipulation, if the Secretary determines that affiliated parties 
have, or will have, access to production facilities for similar or

[[Page 57330]]

identical products, the Secretary shall consider if any of those 
facilities would require substantial retooling in order to restructure 
manufacturing priorities.
* * * * *
0
17. In Sec.  351.404 add paragraph (g) to read as follows:


Sec.  351.404   Selection of the market to be used as the basis for 
normal value.

* * * * *
    (g) Special rule for certain multinational corporations. In the 
course of an antidumping investigation, if the Secretary determines 
that the factors listed in section 773(d) of the Act are present, the 
Secretary will apply the special rule for certain multinational 
corporations and determine the normal value of the subject merchandise 
by reference to the normal value at which the foreign like product is 
sold in substantial quantities from one or more facilities outside the 
exporting country. In making a determination under this provision, the 
following will apply:
    (1) Interested parties alleging that the Secretary should apply the 
special rule for certain multinational corporations must submit the 
allegation in accordance with the filing requirements set forth in 
Sec.  351.301(c)(2)(i).
    (2) If the Secretary determines that the non-exporting country at 
issue is a nonmarket economy country and, in accordance with Sec.  
351.408, normal value is to be determined using a factors of production 
methodology, the Secretary will not apply the special rule for certain 
multinational corporations.
* * * * *
0
18. In Sec.  351.405 revise paragraph (a) and add paragraph (b)(3) to 
read as follows:


Sec.  351.405   Calculation of normal value based on constructed value.

    (a) Introduction. In certain circumstances, the Secretary may 
determine normal value by constructing a value based on the cost of 
manufacturing, selling, general and administrative expenses and profit. 
The Secretary may use constructed value as the basis for normal value 
when: neither the home market nor a third country market is viable; 
sales below the cost of production are disregarded; sales outside the 
ordinary course of trade or sales for which the prices are otherwise 
unrepresentative are disregarded; sales used to establish a fictitious 
market are disregarded; no contemporaneous sales of comparable 
merchandise are available; or in other circumstances where the 
Secretary determines that home market or third country prices are 
inappropriate. (See section 773(e) and section 773(f) of the Act.) This 
section clarifies the meaning of certain terms and sets forth certain 
information which the Secretary will normally consider in determining a 
constructed value.
    (b) * * *
    (3) Under section 773(e)(2)(B)(iii) of the Act, the Secretary will 
normally consider the following criteria in selecting an amount for 
profit normally realized by exporters or producers (other than the 
exporter or producer under examination) in connection with the sale, 
for consumption in the foreign country, of merchandise that is in the 
same general category of products as the subject merchandise:
    (A) The similarity of the potential surrogate companies' business 
operations and products to the examined producer's or exporter's 
business operations and products;
    (B) The extent to which the financial data of the surrogate company 
reflects sales in the home market and does not reflect sales to the 
United States;
    (C) The contemporaneity of the surrogate company's data to the 
period of investigation or review; and
    (D) The extent of similarity between the customer base of the 
surrogate company and the customer base of the examined producer or 
exporter.
0
19. In Sec.  351.408 revise paragraph (b) to read as follows:


Sec.  351.408   Calculation of normal value of merchandise from 
nonmarket economy countries.

* * * * *
    (b) Economic comparability. In determining whether market economy 
countries are at a level of economic development comparable to the 
nonmarket economy under sections 773(c)(2)(B) or 773(c)(4)(A) of the 
Act, the Secretary will place primary emphasis on either per capita 
gross domestic product (GDP) or per capita gross national income (GNI). 
As part of its analysis, the Secretary may also consider additional 
factors that relate to economic comparability, such as:
    (1) The overall size and composition of economic activity in those 
countries as measured by either GDP or GNI;
    (2) The composition and quantity of exports from those countries;
    (3) The availability, accessibility, and quality of data from those 
countries; and
    (4) Additional factors which are appropriate to consider in light 
of unique facts or circumstances.
* * * * *
0
20. In Sec.  351.502:
0
a. Revise paragraphs (d) and (e); and
0
b. Remove paragraphs (f) and (g).
    The revisions read as follows:


Sec.  351.502   Specificity of domestic subsidies.

* * * * *
    (d) Disaster relief. The Secretary will not regard disaster relief 
including pandemic relief as being specific under section 771(5A)(D) of 
the Act if such relief constitutes general assistance available to 
anyone in the area affected by the disaster.
    (e) Employment assistance. The Secretary will not regard employment 
assistance programs as being specific under section 771(5A)(D) if such 
assistance is provided solely with respect to employment of categories 
of workers such as those based on age, gender, disability, long-term 
unemployment, veteran, rural or urban status and is available to 
everyone hired within those categories without any industry 
restrictions.
0
21. In Sec.  351.503 add paragraph (b)(3) to read as follows:


Sec.  351.503   Benefit.

* * * * *
    (b) * * *
    (3) Contingent liabilities and assets. For the provision of a 
contingent liability or asset not otherwise addressed under a specific 
rule identified under paragraph (a) of this section, the Secretary will 
treat the balance or value of the contingent liability or assets as an 
interest-free provision of funds and will calculate the benefit using a 
short-term commercial interest rate.
* * * * *
0
22. In Sec.  351.505:
0
a. Add paragraph (a)(6)(iii); and
0
b. Revise paragraphs (b), (c), and (e).
    The additions read as follows:


Sec.  351.505   Loans.

    (a) * * *
    (6) * * *
    (iii) Initiation standard for government-owned policy banks. An 
interested party will normally meet the initiation threshold for 
specificity under paragraph (a)(6)(ii)(A) of this section with respect 
to section 771(5A)(D) of the Act if the party can sufficiently allege 
that the government-owned policy bank provides loans pursuant to 
government policies or directives and loan distribution information for 
the bank is not reasonably available. A policy bank is a government-
owned special purpose bank.
    (b) Time of receipt of benefit. The Secretary normally will 
consider a benefit as having been received in the year in which the 
firm otherwise would have had to make a payment on the comparable 
commercial loan.
    (c) Allocation of benefit to a particular time period. (1) Short-
term

[[Page 57331]]

loans. The Secretary will allocate (expense) the benefit from a short-
term loan to the year(s) in which the firm is due to make interest 
payments on the loan.
    (2) Long-term loans. The Secretary normally will calculate the 
subsidy amount to be assigned to a particular year by calculating the 
difference in interest payments for that year, i.e., the difference 
between the interest paid by the firm in that year on the government-
provided loan and the interest the firm would have paid on the 
comparison loan.
* * * * *
    (e) Contingent liability interest-free loans. (1) Treatment as 
loans. In the case of an interest-free loan for which the repayment 
obligation is contingent upon the company taking some future action or 
achieving some goal in fulfillment of the loan's requirements, the 
Secretary normally will treat any balance on the loan outstanding 
during a year as an interest-free, short-term loan in accordance with 
paragraphs (a), (b), and (c)(1) of this section. However, if the event 
upon which repayment of the loan depends will occur at a point in time 
more than one year after the receipt of the contingent liability loan, 
the Secretary will use a long-term interest rate as the benchmark in 
accordance with paragraphs (a), (b), and (c)(2) of this section.
    (2) Treatment as grants. If at any point in time the Secretary 
determines that the event upon which repayment depends is not a viable 
contingency or the loan recipient has met the contingent action or goal 
and the government has not taken action to collect repayment, the 
Secretary will treat the outstanding balance of the loan as a grant 
received in the year in which this condition manifests itself.
* * * * *
0
23. In Sec.  351.509 revise paragraph (a)(1) to read as follows:


Sec.  351.509   Direct taxes.

    (a) * * *
    (1) Exemption or remission of taxes. In the case of a program that 
provides for a full or partial exemption or remission of a direct tax 
(for example, an income tax), or a reduction in the base used to 
calculate a direct tax, a benefit exists to the extent that the tax 
paid by a firm as a result of the program is less than the tax the firm 
would have paid in the absence of the program, including as a result of 
being located in an area designated by the government as being outside 
the customs territory of the country.
* * * * *
0
24. In Sec.  351.510 revise paragraph (a)(1) to read as follows:


Sec.  351.510   Indirect taxes and import charges (other than export 
programs).

    (a) * * *
    (1) Exemption or remission of taxes. In the case of a program other 
than an export program that provides for the full or partial exemption 
or remission of an indirect tax or an import charge, a benefit exists 
to the extent that the taxes or import charges paid by a firm as a 
result of the program are less than the taxes the firm would have paid 
in the absence of the program, including as a result of being located 
in an area designated by the government as being outside the customs 
territory of the country.
* * * * *
0
25. In Sec.  351.511 revise paragraph (a)(2)(i) to read as follows:


Sec.  351.511   Provision of goods or services.

    (a) * * *
    (2) * * *
    (i) In general. The Secretary will normally seek to measure the 
adequacy of remuneration by comparing the government price to a market-
determined price for the good or service resulting from actual 
transactions in the country in question. Such a price could include 
prices stemming from actual transactions between private parties, 
actual imports, or, in certain circumstances, actual sales from 
competitively run government auctions. In choosing such transactions or 
sales, the Secretary will consider product similarity; quantities sold, 
imported, or auctioned; and other factors affecting comparability. The 
Secretary may use actual sales from competitively run government 
auctions if the government auction:
    (A) Uses competitive bid procedures that are open without 
restriction on the use of the good or service;
    (B) Is open without restriction to all bidders, including foreign 
enterprises, and protects the confidentiality of the bidders;
    (C) Accounts for the substantial majority of the actual government 
provision of the good or service in the country in question; and
    (D) Determines the winner based solely on price.
* * * * *
0
26. Add Sec.  351.512 to read as follows:


Sec.  351.512   Purchase of goods.

    (a) Benefit--(1) In general. In the case where goods are purchased 
by the government from a firm, in accordance with section 771(5)(E)(iv) 
of the Act a benefit exists to the extent that such goods are purchased 
for more than adequate remuneration.
    (2) Adequate remuneration defined--(i) In general. The Secretary 
will normally seek to measure the adequacy of remuneration by comparing 
the price paid to the firm for the good by the government to a market-
determined price for the good based on actual transactions, including 
imports, between private parties in the country in question, but if 
such prices are not available, then to a world market price or prices 
for the good.
    (ii) Actual market-determined prices unavailable. If there are no 
market-determined domestic or world market prices available, the 
Secretary may measure the adequacy of remuneration by analyzing any 
premium in the request for bid or government procurement regulations 
provided to domestic suppliers of the good or use any other methodology 
to assess whether the price paid to the firm for the good by the 
government is consistent with market principles.
    (iii) Use of ex-factory or ex-works price. In measuring adequate 
remuneration under paragraph (a)(2)(i) or (ii) of this section, the 
Secretary will use an ex-factory or ex-works comparison price and price 
paid to the firm for the good by the government in order to measure the 
benefit conferred to the recipient within the meaning of section 
771(5)(E) of the Act. The Secretary will, if necessary, adjust the 
comparison price and the price paid to the firm by the government to 
remove all delivery charges, import duties, and taxes to derive an ex-
factory or ex-works price.
    (3) Exception when the government is both a provider and purchaser 
of the good. When the government is both a provider and a purchaser of 
the good, such as electricity, the Secretary will normally measure the 
benefit to the recipient firm by comparing the price at which the 
government provided the good to the price at which the government 
purchased the same good from the firm.
    (b) Time of receipt of benefit. In the case of the purchase of a 
good, the Secretary normally will consider a benefit as having been 
received as of the date on which the firm receives payment for the 
purchased good.
    (c) Allocation of benefit to a particular time period. In the case 
of the purchase of a good, the Secretary will normally allocate 
(expense) the benefit to the year in which the benefit is considered to 
have been received under paragraph (b) of this section. However, if the 
Secretary considers this purchase to be for or tied to capital assets 
such

[[Page 57332]]

as land, buildings, or capital equipment, the benefit will normally be 
allocated over time as defined in Sec.  351.524(d)(2).
0
27. Add Sec.  351.521 to read as follows:


Sec.  351.521   Indirect taxes and import charges on capital goods and 
equipment (export programs).

    (a) Benefit. (1) Exemption or remission of taxes and import 
charges. In the case of a program determined to be an export subsidy 
that provides for the full or partial exemption or remission of an 
indirect tax or an import charge on the purchase or import of capital 
goods and equipment, a benefit exists to the extent that the taxes or 
import charges paid by a firm as a result of the program are less than 
the taxes the firm would have paid in the absence of the program, 
including as a result of being located in an area designated by the 
government as being outside the customs territory of the country.
    (2) Deferral of taxes and import charges. In the case that the 
program provides for a deferral of indirect taxes or import charges, a 
benefit exists to the extent that appropriate interest charges are not 
collected. Normally, a deferral of indirect taxes or import charges 
will be treated as a government-provided loan in the amount of the 
taxes deferred, according to the methodology described in Sec.  
351.505. The Secretary will use a short-term interest rate as the 
benchmark for tax deferrals of one year or less. The Secretary will use 
a long-term interest rate as the benchmark for tax deferrals of more 
than one year.
    (b) Time of receipt of benefit. (1) Exemption or remission of taxes 
and import charges. In the case of a full or partial exemption or 
remission of an indirect tax or import charge, the Secretary normally 
will consider the benefit as having been received at the time the 
recipient firm otherwise would be required to pay the indirect tax or 
import charge.
    (2) Deferral of taxes and import charges. In the case of the 
deferral of an indirect tax or import charge of one year or less, the 
Secretary normally will consider the benefit as having been received on 
the date on which the deferred tax becomes due. In the case of a multi-
year deferral, the Secretary normally will consider the benefit as 
having been received on the anniversary date(s) of the deferral.
    (c) Allocation of benefit to a particular time period. The 
Secretary normally will allocate (expense) the benefit of a full or 
partial exemption, remission or deferral of taxes or import charges 
described in paragraph (a) of this section to the year in which the 
benefit is considered to have been received under paragraph (b) of this 
section.


Sec.  351.522   [Removed and Reserved]

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28. Remove and reserve Sec.  351.522.
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29. In Sec.  351.525:
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a. Revise paragraph (b)(1);
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b. Revise paragraphs (b)(6)(iii), (iv), (v), and (vi);
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c. Add paragraphs (b)(6)(vii), (b)(8) and (9);
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d. Revise paragraph (c); and
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e. Add paragraph (d).
    The revisions and additions read as follows:


Sec.  351.525   Calculation of ad valorem subsidy rate and attribution 
of subsidy to a product.

* * * * *
    (b) * * *
    (1) In general. In attributing a subsidy to one or more products, 
the Secretary will apply the rules set forth in paragraphs (b)(2) 
through (9) of this section. The Secretary may determine to limit the 
number of cross-owned corporations examined under this section based on 
record information and resource availability.
    (6) * * *
    (iii) Holding or parent companies. If the firm that received a 
subsidy is a holding company, including a parent company with its own 
business operations, the Secretary will attribute the subsidy to the 
consolidated sales of the holding company and its subsidiaries.
    (iv) Input producer--(A) In general. If there is cross-ownership 
between an input producer that supplies a downstream producer and 
production of the input product is primarily dedicated to production of 
the downstream products, the Secretary will attribute subsidies 
received by the input producer to the combined sales of the input and 
downstream products produced by both corporations (excluding the sales 
between the two corporations).
    (B) Primarily dedicated. In determining whether the input product 
is primarily dedicated to production of the downstream product, the 
Secretary will determine, as a threshold matter, whether the input 
could be used in the production of a downstream product including 
subject merchandise, regardless of whether the input is actually used 
for the production of subject merchandise. The Secretary may also 
consider the following factors, which are not in hierarchical order: 
whether the input is a link in the overall production chain; whether 
the input provider's business activities are focused on providing the 
input to the downstream producer; whether the input is a common input 
used in the production of a wide variety of products and industries; 
whether the downstream producers in the overall production chain are 
the primary users of the inputs produced by the input producer; whether 
the inputs produced by the input producer are primarily reserved for 
use by the downstream producer until the downstream producer's needs 
are met; whether the input producer is dependent on the downstream 
producers for the purchases of the input product; whether the 
downstream producers are dependent on the input producer for their 
supply of the input; the coordination, nature and extent of business 
activities between the input producer and the downstream producers 
whether directly between the input producer and the downstream 
producers or indirectly through other cross-owned corporations; and any 
other factor deemed relevant by the Secretary based upon the case-
specific facts.
    (v) Providers of utility products. If there is cross-ownership 
between a corporation providing electricity, natural gas or other 
similar utility product and a producer of subject merchandise, the 
Secretary will attribute subsidies received by that provider to the 
combined sales of that provider and the sales of products sold by the 
producer of subject merchandise if at least one of the following two 
conditions are met:
    (A) A substantial percentage, normally defined as 25 percent or 
more, of the production of the cross-owned utility provider is provided 
to the producer of subject merchandise, or
    (B) The producer of subject merchandise purchases a substantial 
percentage, normally defined as 25 percent or more, of its electricity, 
natural gas, or other similar utility product from the cross-owned 
provider.
    (vi) Transfer of subsidy between corporations with cross-ownership. 
If a cross-owned corporation received a subsidy and transferred the 
subsidy to a producer of subject merchandise, the Secretary will only 
attribute the subsidy to products produced by the recipient of the 
transferred subsidy. When the cross-owned corporation that transferred 
the subsidy could fall under two or more of the paragraphs under 
paragraph (b)(6) of this section the transferred subsidy will be 
attributed solely under this paragraph.
    (vii) Cross-ownership defined. Cross-ownership exists between two 
or more corporations when one corporation can use or direct the 
individual assets of the other corporation(s) in essentially the

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same ways it can use its own assets. Normally, this standard will be 
met when there is a majority voting ownership interest between two 
corporations or through common ownership of two (or more) corporations.
* * * * *
    (8) Attribution of subsidies to plants or factories. The Secretary 
will not tie or attribute a subsidy on a plant- or factory-specific 
basis.
    (9) General standard for finding tying. A subsidy will normally be 
determined to be tied to a product or market when the authority 
providing the subsidy was made aware of, or otherwise had knowledge of, 
the intended use of the subsidy and acknowledged that intended use of 
the subsidy prior to, or concurrent with, the bestowal of the subsidy.
    (c) Trading companies--(1) In general. Benefits from subsidies 
provided to a trading company that exports subject merchandise shall be 
cumulated with benefits from subsidies provided to the firm which is 
producing subject merchandise that is sold through the trading company, 
regardless of whether the trading company and the producing firm are 
affiliated.
    (2) The individually examined respondent exports through trading 
company. To cumulate subsidies when the trading company is not 
individually examined as a respondent, the Secretary will pro-rate the 
subsidy rate calculated for the trading company by using the ratio of 
the producer's total exports of subject merchandise to the United 
States sold through the trading company divided by producer's total 
exports of subject merchandise to the United States and add the 
resultant rate onto the producer's calculated subsidy rate.
    (3) The individually examined respondent is a trading company. To 
cumulate subsidies when the trading company is individually examined as 
a respondent, the Secretary will pro-rate the subsidy rate calculated 
for the producer(s) by the ratio of the producer's sales of subject 
merchandise to the United States purchased or sourced by the trading 
company to total sales to the United States of subject merchandise from 
all selected producers sourced by the respondent trading company and 
add the resultant rates to the trading company's calculated subsidy 
rate.
    (d) Ad valorem subsidy rate in countries with high inflation. For 
countries experiencing an inflation rate greater than 25 percent per 
annum during the relevant period, the Secretary will normally adjust 
the benefit amount (numerator) and the sales data (denominator) to 
account for the rate of inflation during the relevant period of 
investigation or review in calculating the ad valorem subsidy rate.
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30. Revise Sec.  351.526 to read as follows:


Sec.  351.526   Subsidy extinguishment from changes in ownership.

    (a) In general. The Secretary will normally presume that non-
recurring subsidies continue to benefit a recipient in full over an 
allocation period determined consistent with Sec. Sec.  351.507(d), 
351.508(c)(1), or 351.524, notwithstanding an intervening change in 
ownership.
    (b) Rebutting the presumption of subsidy continuation 
notwithstanding a change in ownership.
    (1) An interested party may rebut the presumption in paragraph (a) 
of this section by demonstrating with sufficient evidence that, during 
the allocation period, a change in ownership occurred in which the 
seller sold its ownership of all or substantially all of a company or 
its assets, retaining no control of the company or its assets, and
    (i) In the case of a government-to-private sale, that the sale was 
an arm's-length transaction for fair market value, or
    (ii) In the case of a private-to-private sale, that the sale was an 
arm's-length transaction, unless a party demonstrates that the sale was 
not for fair market value.
    (2) Arm's-length. In determining whether the evidence presented in 
paragraph (b)(1) of this section demonstrates that the transaction was 
conducted at arm's length, the Secretary will be guided by the SAA, 
which defines an arm's-length transaction as a transaction negotiated 
between unrelated parties, each acting in its own interest, or between 
related parties such that the terms of the transaction are those that 
would exist if the transaction had been negotiated between unrelated 
parties.
    (3) Fair Market Value. (i) In determining whether the evidence 
presented by parties pursuant to paragraph (b)(1) of this section 
demonstrates that the transaction was for fair market value, the 
Secretary will determine whether the seller, including in the case of a 
privatization through the government in its capacity as seller, acted 
in a manner consistent with the normal sales practices of private, 
commercial sellers in that country, taking into account evidence 
regarding whether the seller failed to maximize its return on what it 
sold.
    (ii) In making the determination under paragraph (b)(3)(i) of this 
section, the Secretary may consider, inter alia, information regarding 
comparable benchmark prices as well as information regarding the 
process through which the sale was made. The following is a non-
exhaustive list of specific considerations that the Secretary may find 
to be relevant in this regard:
    (A) Objective analysis. Whether the seller performed or obtained an 
objective analysis in determining the appropriate sales price and, if 
so, whether it implemented the recommendations of such objective 
analysis for maximizing its return on the sale, including in regard to 
the sales price recommended in the analysis;
    (B) Artificial barriers to entry. Whether the seller imposed 
restrictions on foreign purchasers or purchasers from other industries, 
overly burdensome or unreasonable bidder qualification requirements, or 
any other restrictions that artificially suppressed the demand for, or 
the purchase price of, the company;
    (C) Highest bid. Whether the seller accepted the highest bid, 
reflecting the full amount that the company or its assets (including 
the value of any subsidy benefits) were actually worth under the 
prevailing market conditions and whether the final purchase price was 
paid through monetary or close equivalent compensation; and
    (D) Committed investment. Whether there were price discounts or 
other inducements in exchange for promises of additional future 
investment that private, commercial sellers would not normally seek 
(for example, retaining redundant workers or unwanted capacity) and, if 
so, whether such committed investment requirements were a barrier to 
entry or in any way distorted the value that bidders were willing to 
pay for what was being sold.
    (4) Market distortion. Information presented under paragraphs 
(b)(2) and (3) of this section notwithstanding, the Secretary will not 
find the presumption in paragraph (a) of this section to be rebutted if 
an interested party has demonstrated that, at the time of the change in 
ownership, the broader market conditions necessary for the transaction 
price to accurately reflect the subsidy benefit were not present or 
were severely distorted by government action or inaction such that the 
transaction price was meaningfully different from what it would 
otherwise have been absent the distortive government action or 
inaction. In assessing such claims, the Secretary may consider, among 
other things, the following factors:

[[Page 57334]]

    (i) Fundamental conditions. Whether the fundamental requirements 
for a properly functioning market are sufficiently present in the 
economy in general as well as in the particular industry or sector, 
including, for example, free interplay of supply and demand, broad-
based and equal access to information, sufficient safeguards against 
collusive behavior, and effective operation of the rule of law; and
    (ii) Legal and fiscal incentives. Whether the government has used 
the prerogatives of government in a special or targeted way that makes 
possible or otherwise significantly distorts the terms of a change in 
ownership in a way that a private seller could not. Examples of such 
incentives include, but are not limited to, the following:
    (A) Special tax or duty rates that make the sale more attractive to 
potential purchasers;
    (B) Regulatory exemptions particular to the privatization (or to 
privatizations generally) affecting worker retention or environmental 
remediation; or
    (C) Subsidization or support of other companies to an extent that 
severely distorts the normal market signals regarding company and asset 
values in the industry in question.
    (c) Subsidy benefit extinguishment. (1) In general. If the 
Secretary determines that any evidence presented by interested parties 
under paragraph (b) of this section rebuts the presumption under 
paragraph (a) of this section, the full amount of pre-transaction 
subsidy benefits, including the benefit of any concurrent subsidy 
meeting the criteria in paragraph (c)(2) of this section, will be found 
to be extinguished and therefore not countervailable. Absent such a 
finding, the Secretary will not find that a change in ownership 
extinguishes subsidy benefits.
    (2) Concurrent subsidies. For purposes of paragraph (c)(1) of this 
section, concurrent subsidies are those subsidies given to facilitate 
or encourage or that are otherwise bestowed concurrent with a change in 
ownership. The Secretary will normally consider the value of a 
concurrent subsidy to be fully reflected in the fair market value price 
of an arm's-length change in ownership and, therefore, to be fully 
extinguished in such a transaction under paragraph (c)(1) of this 
section, if the following criteria are met:
    (i) The nature and value of the concurrent subsidies are fully 
transparent to all potential bidders and, therefore, reflected in the 
final bid values of the potential bidders,
    (ii) The concurrent subsidies are bestowed prior to the sale, and
    (iii) There is no evidence otherwise on the record demonstrating 
that the concurrent subsidies are not fully reflected in the 
transaction price.

[FR Doc. 2024-15086 Filed 7-11-24; 8:45 am]
BILLING CODE 3510-DS-P