19034 Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 

acting for or on behalf of Credit 

International, its representatives, agents, 

officers or employees (collectively, 

‘‘Related Person’’) may not participate, 

directly or indirectly, in any way in any 

transaction involving any commodity, 

software or technology (hereinafter 

collectively referred to as ‘‘item’’) 

exported or to be exported from the 

United States that is subject to the 

Regulations, or in any other activity 

subject to the Regulations, including, 

but not limited to: 

A. Applying for, obtaining, or using 

any license, License Exception, or 

export control document; 

B. Carrying on negotiations 

concerning, or ordering, buying, 

receiving, using, selling, delivering, 

storing, disposing of, forwarding, 

transporting, financing, or otherwise 

servicing in any way, any transaction 

involving any item exported or to be 

exported from the United States that is 

subject to the Regulations, or in any 

other activity subject to the Regulations; 

or 

C. Benefiting in any way from any 

transaction involving any item exported 

or to be exported from the United States 

that is subject to the Regulations, or in 

any other activity subject to the 

Regulations. 

II. No person may, directly or 

indirectly, do any of the following: 

A. Export or reexport to or on behalf 

of the Related Person any item subject 

to the Regulations; 

B. Take any action that facilitates the 

acquisition or attempted acquisition by 

the Related Person of the ownership, 

possession, or control of any item 

subject to the Regulations that has been 

or will be exported from the United 

States, including financing or other 

support activities related to a 

transaction whereby the Related Person 

acquires or attempts to acquire such 

ownership, possession or control; 

C. Take any action to acquire from or 

to facilitate the acquisition or attempted 

acquisition from the Related Person of 

any item subject to the Regulations that 

has been exported from the United 

States; 

D. Obtain from the Related Person in 

the United States any item subject to the 

Regulations with knowledge or reason 

to know that the item will be, or is 

intended to be, exported from the 

United States; or 

E. Engage in any transaction to service 

any item subject to the Regulations that 

has been or will be exported from the 

United States and which is owned, 

possessed or controlled by the Related 

Person, or service any item, of whatever 

origin, that is owned, possessed or 

controlled by the Related Person if such 

service involves the use of any item 

subject to the Regulations that has been 

or will be exported from the United 

States. For purposes of this paragraph, 

servicing means installation, 

maintenance, repair, modification or 

testing. 

Third, that in accordance with the 

provisions of Section 766.23(c) of the 

Regulations, the Related Person may, at 

any time, make an appeal related to this 

Order by filing a full written statement 

in support of the appeal with the Office 

of the Administrative Law Judge, U.S. 

Coast Guard ALJ Docketing Center, 40 

South Gay Street, Baltimore, Maryland 

21202–4022. 

Fourth, that this Order does not 

prohibit any export, reexport, or other 

transaction subject to the Regulations 

where the only items involved that are 

subject to the Regulations are the 

foreign-produced direct product of U.S.- 

origin technology. 

Fifth, that this Order is effective 

immediately and shall remain in effect 

until May 2, 2015. 

Sixth, that this Order shall be 

published in the Federal Register and a 

copy served on the Related Person. 

Issued this 30 day of March 2011. 

Bernard Kritzer, 

Director, Office of Exporter Services. 

[FR Doc. 2011–8194 Filed 4–5–11; 8:45 am] 

BILLING CODE 3510–DT–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–570–971] 

Multilayered Wood Flooring From the 

People’s Republic of China: 

Preliminary Affirmative Countervailing 

Duty Determination 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

preliminarily determines that 

countervailable subsidies are being 

provided to producers and exporters of 

multilayered wood flooring from the 

People’s Republic of China. For 

information on the estimated subsidy 

rates, see the ‘‘Suspension of 

Liquidation’’ section of this notice. 

DATES: Effective Date: April 6, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Shane Subler, Matthew Jordan, Patricia 

Tran, or Joshua Morris, AD/CVD 

Operations, Office 1, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–0189, (202) 482– 

1540, (202) 482–1503, and (202) 482– 

1779, respectively. 

SUPPLEMENTARY INFORMATION:

Case History 

The following events have occurred 

since the publication of the Department 

of Commerce’s (‘‘Department’’) notice of 

initiation in the Federal Register. See 

Multilayered Wood Flooring from the 

People’s Republic of China: Initiation of 

Countervailing Duty Investigation, 75 FR 

70719 (November 18, 2010) (‘‘Initiation 

Notice’’), and the accompanying 

Initiation Checklist. 

On November 18, 2010, the 

Department released the U.S. Customs 

and Border Protection (‘‘CBP’’) data for 

the instant investigation under 

administrative protective order (‘‘APO’’) 

to all parties with APO access. See 

Memorandum to File from Matthew 

Jordan, International Trade Compliance 

Analyst, ‘‘Release of Customs and 

Border Protection Entry Data to 

Interested Parties for Comment’’ 

(November 18, 2010) at Attachment 1. 

This memorandum is on file in the 

Department’s Central Records Unit 

(‘‘CRU’’) in Room 7046 of the main 

Department building. We received 

comments on this CBP data from Fine 

Furniture (Shanghai) Ltd. (‘‘Fine 

Furniture’’) on November 19, 2010, and 

Dun Hua City Jisen Wood Industry Co., 

Ltd. and Chinafloors Timber (China) 

Co., Ltd. on November 24, 2010. We 

received comments from Shanghai 

Lizhong Wood Product Co., Ltd. and the 

Coalition for American Hardwood Parity 

(Anderson Hardwood Floors, LLC; 

Award Hardwood Floors; Baker’s Creek 

Wood Floors, Inc.; From the Forest; 

Howell Hardwood Flooring; 

Mannington Mills, Inc.; Nydree 

Flooring; Shaw Industries Group, Inc.) 

(collectively, ‘‘Petitioner’’) on November 

26, 2010. 

In their comments, the interested 

parties unanimously requested that the 

Department forgo using CBP data for its 

selection of mandatory respondents. 

Instead, the parties stated, the 

Department should issue quantity and 

value (‘‘Q&V’’) questionnaires to the 

companies identified by Petitioner as 

potential producers/exporters of the 

subject merchandise. After examining 

the CBP data, the Department agreed 

that the data did not provide a basis for 

selecting respondents and determined it 

was necessary to issue Q&Vs. 

On December 2, 2010, and December 

3, 2010, the Department issued Q&Vs to 

the 174 companies listed in the Petition, 

plus two additional companies that 

identified themselves via requests for 

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Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 19035 

1A ‘‘veneer’’ is a thin slice of wood, rotary cut, 

sliced or sawed from a log, bolt, or flitch. Veneer 

is referred to as a ply when assembled. 

voluntary treatment as producers and/or 

exporters of subject merchandise before 

the Q&Vs were issued, for a total of 176 

questionnaires issued. In total, the 

Department received 70 responses. 

On December 30, 2010, the 

Department selected three Chinese 

producers/exporters of multilayered 

wood flooring (‘‘wood flooring’’) as 

mandatory respondents: (1) Fine 

Furniture; (2) Zhejiang Layo Wood 

Industry Co., Ltd. (‘‘Layo’’); and (3) 

Zhejiang Yuhua Timber Co., Ltd. 

(‘‘Yuhua’’). See Memorandum to 

Christian Marsh, Deputy Assistant 

Secretary for Antidumping and 

Countervailing Duty Operations, 

‘‘Selection of Respondents for the 

Countervailing Duty Investigation of 

Multilayered Wood Flooring from the 

People’s Republic of China’’ (December 

30, 2010) (‘‘Respondent Selection 

Memo’’) at 4. 

On January 3, 2011, we issued 

questionnaires to the Government of the 

People’s Republic of China (‘‘GOC’’), 

Fine Furniture, Layo, and Yuhua. Also 

on January 3, 2011, the Department 

published a postponement of the 

deadline for the preliminary 

determination in this countervailing 

duty (‘‘CVD’’) investigation until March 

21, 2011. See Multilayered Wood 

Flooring from the People’s Republic of 

China: Postponement of Preliminary 

Determination in the Countervailing 

Duty Investigation, 76 FR 92 (January 3, 

2011). 

On February 7, 2011, Petitioner 

requested an extension of time to submit 

new subsidy allegations to the 

Department. On February 7, 2011, we 

partially extended the deadline; 

however, no new subsidy allegations 

were submitted. 

On February 14, 2011, we received 

responses to our questionnaires from the 

GOC, Fine Furniture, Layo, and Yuhua. 

See the GOC’s Initial CVD 

Questionnaire Response (‘‘GQR’’), the 

Countervailing Duty Questionnaire 

Response of Fine Furniture (Shanghai) 

Limited (‘‘FFQR’’), Layo’s Questionnaire 

Response (‘‘LQR’’) (as well as affiliated 

trading company Jiaxing Brilliant 

Import & Export Co., Ltd.’s 

Questionnaire Response ‘‘LQR 

(Brilliant)’’), and Yuhua’s CVD 

Questionnaire Response (‘‘YQR’’). We 

sent supplemental questionnaires to the 

GOC, Fine Furniture, Layo, and Yuhua 

on February 18, 2011. We received 

responses to these supplemental 

questionnaires from the GOC, Layo, and 

Yuhua on February 25, 2011, and Fine 

Furniture on March 2, 2011. See the 

GOC’s First Supplemental CVD 

Questionnaire Response (‘‘G1SR’’), the 

First Supplemental Countervailing Duty 

Questionnaire Response of Fine 

Furniture (Shanghai) Limited (‘‘FF1SR’’), 

Layo’s Supplemental Questionnaire 

Response (‘‘L1SR’’), and Yuhua’s 

Supplemental CVD Response (‘‘Y1SR’’). 

We sent a second supplemental 

questionnaire to Fine Furniture on 

March 8, 2011. We received a response 

to the second supplemental 

questionnaire on March 11, 2011. See 

Fine Furniture’s Second Supplemental 

Questionnaire Response (‘‘FF2SR’’). 

Scope Comments 

In accordance with the preamble to 

the Department’s regulations, we set 

aside a period of time in our Initiation 

Notice for parties to raise issues 

regarding product coverage, and 

encouraged all parties to submit 

comments within 20 calendar days of 

publication of that notice. See 

Antidumping Duties; Countervailing 

Duties, 62 FR 27296, 27323 (May 19, 

1997), and Initiation Notice, 75 FR at 

70719. We received numerous 

comments concerning the scope of the 

antidumping duty (‘‘AD’’) and CVD 

investigations of wood flooring from the 

People’s Republic of China (‘‘PRC’’), 

including requests to exclude certain 

products from the scope of the 

investigations. 

On March 14, 2011, Petitioner 

submitted a response to the individual 

scope comments and exclusion requests. 

See letter from Petitioner to the 

Department, ‘‘Multilayered Wood 

Flooring from the People’s Republic of 

China’’ (March 14, 2011). 

Because of the timing of the scope 

comments and Petitioner’s response to 

the comments, we did not have time to 

analyze the issues raised by parties prior 

to this preliminary determination. 

Therefore, after this preliminary 

determination, we intend to issue a 

preliminary analysis with respect to the 

scope issues raised by interested parties. 

Scope of the Investigation 

Multilayered wood flooring is 

composed of an assembly of two or 

more layers or plies of wood veneer(s) 1

in combination with a core. The several 

layers, along with the core, are glued or 

otherwise bonded together to form a 

final assembled product. Multilayered 

wood flooring is often referred to by 

other terms, e.g., ‘‘engineered wood 

flooring’’ or ‘‘plywood flooring.’’ 

Regardless of the particular terminology, 

all products that meet the description 

set forth herein are intended for 

inclusion within the definition of 

subject merchandise. 

All multilayered wood flooring is 

included within the definition of subject 

merchandise, without regard to: 

Dimension (overall thickness, thickness 

of face ply, thickness of back ply, 

thickness of core, and thickness of inner 

plies; width; and length); wood species 

used for the face, back and inner 

veneers; core composition; and face 

grade. Multilayered wood flooring 

included within the definition of subject 

merchandise may be unfinished (i.e., 

without a finally finished surface to 

protect the face veneer from wear and 

tear) or ‘‘prefinished’’ (i.e., a coating 

applied to the face veneer, including, 

but not exclusively, oil or oil-modified 

or water-based polyurethanes, ultraviolet light cured polyurethanes, wax, 

epoxy-ester finishes, moisture-cured 

urethanes and acid-curing formaldehyde 

finishes.) The veneers may be also 

soaked in an acrylic-impregnated finish. 

All multilayered wood flooring is 

included within the definition of subject 

merchandise regardless of whether the 

face (or back) of the product is smooth, 

wire brushed, distressed by any method 

or multiple methods, or hand-scraped. 

In addition, all multilayered wood 

flooring is included within the 

definition of subject merchandise 

regardless of whether or not it is 

manufactured with any interlocking or 

connecting mechanism (for example, 

tongue-and-groove construction or 

locking joints). All multilayered wood 

flooring is included within the 

definition of the subject merchandise 

regardless of whether the product meets 

a particular industry or similar 

standard. 

The core of multilayered wood 

flooring may be composed of a range of 

materials, including but not limited to 

hardwood or softwood veneer, 

particleboard, medium-density 

fiberboard (‘‘MDF’’), high-density 

fiberboard (‘‘HDF’’), stone and/or plastic 

composite, or strips of lumber placed 

edge-to-edge. 

Multilayered wood flooring products 

generally, but not exclusively, may be in 

the form of a strip, plank, or other 

geometrical patterns (e.g., circular, 

hexagonal). All multilayered wood 

flooring products are included within 

this definition regardless of the actual or 

nominal dimensions or form of the 

product. 

Specifically excluded from the scope 

are cork flooring and bamboo flooring, 

regardless of whether any of the subsurface layers of either flooring are 

made from wood. Also excluded is 

laminate flooring. Laminate flooring 

consists of a top wear layer sheet not 

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19036 Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 

made of wood, a decorative paper layer, 

a core-layer of high-density fiberboard, 

and a stabilizing bottom layer. 

Imports of the subject merchandise 

are provided for under the following 

subheadings of the Harmonized Tariff 

Schedule of the United States 

(‘‘HTSUS’’): 4412.31.0520; 4412.31.0540; 

4412.31.0560; 4412.31.2510; 

4412.31.2520; 4412.31.4040; 

4412.31.4050; 4412.31.4060; 

4412.31.4070; 4412.31.5125; 

4412.31.5135; 4412.31.5155; 

4412.31.5165; 4412.31.3175; 

4412.31.6000; 4412.31.9100; 

4412.32.0520; 4412.32.0540; 

4412.32.0560; 4412.32.2510; 

4412.32.2520; 4412.32.3125; 

4412.32.3135; 4412.32.3155; 

4412.32.3165; 4412.32.3175; 

4412.32.3185; 4412.32.5600; 

4412.39.1000; 4412.39.3000; 

4412.39.4011; 4412.39.4012; 

4412.39.4019; 4412.39.4031; 

4412.39.4032; 4412.39.4039; 

4412.39.4051; 4412.39.4052; 

4412.39.4059; 4412.39.4061; 

4412.39.4062; 4412.39.4069; 

4412.39.5010; 4412.39.5030; 

4412.39.5050; 4412.94.1030; 

4412.94.1050; 4412.94.3105; 

4412.94.3111; 4412.94.3121; 

4412.94.3131; 4412.94.3141; 

4412.94.3160; 4412.94.3171; 

4412.94.4100; 4412.94.5100; 

4412.94.6000; 4412.94.7000; 

4412.94.8000; 4412.94.9000; 

4412.94.9500; 4412.99.0600; 

4412.99.1020; 4412.99.1030; 

4412.99.1040; 4412.99.3110; 

4412.99.3120; 4412.99.3130; 

4412.99.3140; 4412.99.3150; 

4412.99.3160; 4412.99.3170; 

4412.99.4100; 4412.99.5100; 

4412.99.5710; 4412.99.6000; 

4412.99.7000; 4412.99.8000; 

4412.99.9000; 4412.99.9500; 

4418.71.2000; 4418.71.9000; 

4418.72.2000; and 4418.72.9500. 

In addition, imports of subject 

merchandise may enter the U.S. under 

the following HTSUS subheadings: 

4409.10.0500; 4409.10.2000; 

4409.29.0515; 4409.29.0525; 

4409.29.0535; 4409.29.0545; 

4409.29.0555; 4409.29.0565; 

4409.29.2530; 4409.29.2550; 

4409.29.2560; 4418.71.1000; 

4418.79.0000; and 4418.90.4605. 

While HTSUS subheadings are 

provided for convenience and customs 

purposes, the written description of the 

subject merchandise is dispositive. 

Injury Test 

On December 17, 2010, the U.S. 

International Trade Commission (‘‘ITC’’) 

published its affirmative preliminary 

determination that there is a reasonable 

indication that an industry in the 

United States is materially injured by 

reason of allegedly subsidized imports 

of wood flooring from the PRC. See 

Multilayered Wood Flooring From 

China, 75 FR 79019 (December 17, 

2010). 

Period of Investigation 

The period for which we are 

measuring subsidies, i.e., the period of 

investigation (‘‘POI’’), is January 1, 2009, 

through December 31, 2009. 

Application of the Countervailing Duty 

Law to Imports From the PRC 

On October 25, 2007, the Department 

published Coated Free Sheet Paper from 

the People’s Republic of China: Final 

Affirmative Countervailing Duty 

Determination, 72 FR 60645 (October 

25, 2007) (‘‘CFS from the PRC’’), and the 

accompanying Issues and Decision 

Memorandum (‘‘CFS Decision 

Memorandum’’). In CFS from the PRC, 

the Department found that 

given the substantial difference between the 

Soviet-style economies and China’s economy 

in recent years, the Department’s previous 

decision not to apply the CVD law to these 

Soviet-style economies does not act as {a} bar 

to proceeding with a CVD investigation 

involving products from China. 

See CFS Decision Memorandum, at 

Comment 6. The Department has 

affirmed its decision to apply the CVD 

law to the PRC in subsequent final 

determinations. See, e.g., Circular 

Welded Carbon Quality Steel Pipe from 

the People’s Republic of China: Final 

Affirmative Countervailing Duty 

Determination and Final Affirmative 

Determination of Critical 

Circumstances, 73 FR 31966 (June 5, 

2008), and accompanying Issues and 

Decision Memorandum (‘‘CWP Decision 

Memorandum’’) at Comment 1. 

Additionally, for the reasons stated in 

the CWP Decision Memorandum, we are 

using the date of December 11, 2001, the 

date on which the PRC became a 

member of the WTO, as the date from 

which the Department will identify and 

measure subsidies in the PRC. See CWP 

Decision Memorandum at Comment 2. 

Use of Facts Otherwise Available and 

Adverse Inferences 

Sections 776(a)(1) and (2) of the Tariff 

Act of 1930, as amended (‘‘the Act’’), 

provide that the Department shall apply 

‘‘facts otherwise available’’ if necessary 

information is not on the record or an 

interested party or any other person: (A) 

Withholds information that has been 

requested; (B) fails to provide 

information within the deadlines 

established, or in the form and manner 

requested by the Department, subject to 

subsections (c)(1) and (e) of section 782 

of the Act; (C) significantly impedes a 

proceeding; or (D) provides information 

that cannot be verified as provided by 

section 782(i) of the Act. 

Section 776(b) of the Act further 

provides that the Department may use 

an adverse inference in applying the 

facts otherwise available when a party 

has failed to cooperate by not acting to 

the best of its ability to comply with a 

request for information. 

GOC—Electricity 

The GOC did not provide a complete 

response to the Department’s January 3, 

2011, questionnaire regarding the 

alleged provision of electricity for less 

than adequate remuneration (‘‘LTAR’’). 

Specifically, the Department requested 

that the GOC provide the original 

Provincial Price Proposals for 2006 and 

2008 for each province in which a 

mandatory respondent or any reported 

‘‘cross-owned’’ company is located. 

Because the requested price proposals 

are core documents for the GOC’s 

electricity price adjustment process, the 

documents are necessary for the 

Department’s analysis of the program. 

At page 48 of the GQR, the GOC 

responded that the proposals are drafted 

by the provincial governments and 

submitted to the National Development 

and Reform Commission (‘‘NDRC’’). The 

GOC stated it is unable to provide the 

internal working documents from the 

NDRC with its response. On February 

18, 2011, the Department issued a 

supplemental questionnaire and 

reiterated its request for this 

information. In response, the GOC 

stated, the ‘‘GOC maintains its position 

that the requested original provincial 

proposals are internal working 

documents for NDRC’s review and 

cannot be provided.’’ See G1SR at 4. 

Consequently, we preliminarily 

determine that the GOC has withheld 

necessary information that was 

requested of it and, thus, that the 

Department must rely on ‘‘facts 

available’’ in making our preliminary 

determination. See section 776(a)(1), 

section 776(a)(2)(A), and section 

776(a)(2)(B) of the Act. Moreover, we 

preliminarily determine that the GOC 

has failed to cooperate by not acting to 

the best of its ability to comply with our 

request for information as it did not 

respond by the deadline dates, nor did 

it explain why it was unable to provide 

the requested information. 

Consequently, an adverse inference is 

warranted in the application of facts 

available. See section 776(b) of the Act. 

In drawing an adverse inference, we 

find that the GOC’s provision of 

electricity constitutes a financial 

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Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 19037 

contribution within the meaning of 

section 771(5)(D) of the Act and is 

specific within the meaning of section 

771(5A) of the Act. We have also relied 

on an adverse inference in selecting the 

benchmark for determining the 

existence and amount of the benefit. See 

sections 776(b)(2) and 776(b)(4) of the 

Act. The benchmark rates we have 

selected are derived from information 

from the record of the instant 

investigation and are the highest 

electricity rates on this record for the 

applicable rate and user categories. See 

GQR at Exhibit E–4 and E–5. 

For details on the calculation of the 

subsidy rate for the respondents, see 

below at section I.4., ‘‘Provision of 

Electricity for LTAR.’’ 

Non-Cooperative Companies 

In this investigation, 127 companies 

did not provide a response to the 

Department’s Q&V questionnaire issued 

during the respondent selection process. 

These companies are listed below in the 

‘‘Suspension of Liquidation’’ section. We 

confirmed that each of these companies 

either received the Q&V questionnaire 

sent via United Parcel Service and did 

not respond, or refused delivery of the 

Q&V questionnaire. See Memorandum 

to the File from Matthew Jordan, 

International Trade Compliance 

Analyst, AD/CVD Operations, Office 1, 

dated March 21, 2011, re: Adverse Facts 

Available Rate for Non-Cooperating 

Companies (‘‘AFA Memo’’). 

These non-cooperating companies 

withheld requested information and 

significantly impeded this proceeding. 

Specifically, by not responding to 

requests for information concerning the 

quantity and value of their sales, the 

companies impeded the Department’s 

ability to select the most appropriate 

respondents in this investigation. Thus, 

in reaching our preliminary 

determination, pursuant to sections 

776(a)(2)(A) and (C) of the Act, we are 

basing the CVD rate for these noncooperating companies on facts 

otherwise available. 

We further preliminarily determine 

that an adverse inference is warranted, 

pursuant to section 776(b) of the Act. By 

failing to submit responses to the 

Department’s Q&V questionnaires, these 

companies did not cooperate to the best 

of their ability in this investigation. 

Accordingly, we preliminarily find that 

an adverse inference is warranted to 

ensure that the non-cooperating 

companies will not obtain a more 

favorable result than had they fully 

complied with our request for 

information. 

In deciding which facts to use as 

adverse facts available (‘‘AFA’’), section 

776(b) of the Act and 19 CFR 

351.308(c)(1) and (2) authorize the 

Department to rely on information 

derived from: (1) The petition; (2) a final 

determination in the investigation; (3) 

any previous review or determination; 

or (4) any other information placed on 

the record. The Department’s practice 

when selecting an adverse rate from 

among the possible sources of 

information is to ensure that the rate is 

sufficiently adverse ‘‘as to effectuate the 

statutory purposes of the adverse facts 

available rule to induce respondents to 

provide the Department with complete 

and accurate information in a timely 

manner.’’ See, e.g., Notice of Final 

Determination of Sales at Less Than 

Fair Value: Static Random Access 

Memory Semiconductors From Taiwan, 

63 FR 8909, 8932 (February 23, 1998). 

The Department’s practice also ensures 

‘‘that the party does not obtain a more 

favorable result by failing to cooperate 

than if it had cooperated fully.’’ See 

Statement of Administrative Action 

(‘‘SAA’’) accompanying the Uruguay 

Round Agreements Act, H.R. Rep. No. 

103–316, Vol. I, at 870 (1994), reprinted 

at 1994 U.S.C.C.A.N. 4040, 4199. 

For this preliminary determination, 

consistent with the Department’s recent 

practice, we are computing a total AFA 

rate for the non-cooperating companies 

using program-specific rates calculated 

for the cooperating respondents in the 

instant investigation. See, e.g., Certain 

Kitchen Shelving and Racks from the 

People’s Republic of China: Final 

Affirmative Countervailing Duty 

Determination, 74 FR 37012 (July 27, 

2009) and accompanying Issues and 

Decision Memorandum (‘‘Shelving 

Decision Memorandum’’) at 4–5. 

Specifically, for programs other than 

those involving income tax exemptions 

and reductions, we are applying the 

highest calculated rate for the identical 

program in this investigation. 

As explained in Certain Tow-Behind 

Lawn Groomers and Certain Parts 

Thereof from the People’s Republic of 

China: Initiation of Countervailing Duty 

Investigation, 73 FR 42324 (July 21, 

2008) and accompanying Initiation 

Checklist, where the GOC can 

demonstrate through complete, 

verifiable, positive evidence that noncooperating companies (including all 

their facilities and cross-owned 

affiliates) are not located in particular 

provinces whose subsidies are being 

investigated, the Department will not 

include those provincial programs in 

determining the countervailable subsidy 

rate for the non-cooperating companies. 

See, e.g., Shelving Decision 

Memorandum at ‘‘Use of Facts 

Otherwise Available and Adverse Facts 

Available.’’ In this investigation, the 

GOC has not provided any such 

information. Therefore, we are making 

the adverse inference that the noncooperating companies had facilities 

and/or cross-owned affiliates that 

received subsidies under all of the subnational programs on which the 

Department initiated. 

Consistent with this, we have 

calculated the non-cooperating 

companies’’ countervailable subsidies as 

follows: 

Income Tax Reduction and Exemption 

Programs 

For the income tax rate reduction or 

exemption programs, we are applying 

an adverse inference that the noncooperating companies paid no income 

taxes during the POI. The three 

programs are: (1) Two Free, Three Half 

Tax Exemptions for Foreign-Invested 

Enterprises (‘‘FIEs’’); (2) Local Income 

Tax Exemption and Reduction Program 

for Productive FIEs; and (3) Income Tax 

Benefits for FIEs Based on Geographical 

Location. 

The standard income tax rate for 

corporations in the PRC is 25 percent. 

See GQR at 12. The highest possible 

benefit for all income tax reduction or 

exemption programs combined is 25 

percent. Therefore, we are applying a 

CVD rate of 25 percent on an overall 

basis for these three income tax 

programs (i.e., these three income tax 

programs combined provide a 

countervailable benefit of 25 percent). 

This approach is consistent with the 

Department’s past practice. See, e.g., 

Aluminum Extrusions From the People’s 

Republic of China: Preliminary 

Affirmative Countervailing Duty 

Determination, 75 FR 54302, 54306 

(September 7, 2010), Lightweight 

Thermal Paper From the People’s 

Republic of China: Final Affirmative 

Countervailing Duty Determination, 73 

FR 57323 (October 2, 2008) (‘‘LWTP 

from the PRC’’), and accompanying 

Issues and Decision Memorandum 

(‘‘LWTP Decision Memorandum’’) at 

‘‘Selection of the Adverse Facts 

Available Rate,’’ and CWP Decision 

Memorandum at 2. 

Value-Added Tax (‘‘VAT’’) and Tariff 

Reduction Programs 

Among the responding companies in 

this investigation, Fine Furniture had 

the highest calculated rate for the VAT 

and Tariff Exemptions on Imported 

Equipment program. Therefore, we are 

using, as AFA, Fine Furniture’s rate of 

0.56 percent. 

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Provision of Goods and Services for 

LTAR 

Among the responding companies in 

this investigation, Fine Furniture had 

the highest calculated rate for the 

Provision of Electricity for LTAR 

program. Therefore, we are using, as 

AFA, Fine Furniture’s rate of 1.45 

percent. 

For further explanation of the 

derivation of the AFA rates, see the AFA 

Memo. 

On this basis, we preliminarily 

determine the AFA countervailable 

subsidy rate for the non-cooperating 

companies to be 27.01 percent ad 

valorem. See AFA Memo. 

Application of All-Others Rate to 

Companies Not Selected as Mandatory 

Respondents 

In addition to Fine Furniture, Layo, 

and Yuhua, we received responses to 

the Q&V questionnaire from 67 other 

companies. See Respondent Selection 

Memo at 4. Though these 67 companies 

were not chosen as mandatory 

respondents, they did cooperate fully 

with the Department’s request for 

quantity and value information. We, 

therefore, are applying the all-others 

rate to them. 

Subsidies Valuation Information 

Allocation Period 

The average useful life (‘‘AUL’’) period 

in this proceeding, as described in 19 

CFR 351.524(d)(2), is 10 years according 

to the U.S. Internal Revenue Service’s 

1977 Class Life Asset Depreciation 

Range System, as revised. See U.S. 

Internal Revenue Service Publication 

946 (2008), How to Depreciate Property, 

at Table B–2: Table of Class Lives and 

Recovery Periods. No party in this 

proceeding has disputed this allocation 

period. 

Attribution of Subsidies 

The Department’s regulations at 19 

CFR 351.525(b)(6)(i) state that the 

Department will normally attribute a 

subsidy to the products produced by the 

corporation that received the subsidy. 

However, 19 CFR 351.525(b)(6)(ii)–(v) 

directs that the Department will 

attribute subsidies received by certain 

other companies to the combined sales 

of the recipient and other companies if: 

(1) Cross-ownership exists between the 

companies; and (2) the cross-owned 

companies produce the subject 

merchandise, are a holding or parent 

company of the subject company, 

produce an input that is primarily 

dedicated to the production of the 

downstream product, or transfer a 

subsidy to a cross-owned company. 

According to 19 CFR 

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. This 

section of the Department’s regulations 

states that this standard will normally 

be met where there is a majority voting 

ownership interest between two 

corporations or through common 

ownership of two (or more) 

corporations. The preamble to the 

Department’s regulations further 

clarifies the Department’s crossownership standard. According to the 

preamble, relationships captured by the 

cross-ownership definition include 

those where 

the interests of two corporations have 

merged to such a degree that one corporation 

can use or direct the individual assets (or 

subsidy benefits) of the other corporation in 

essentially the same way it can use its own 

assets (or subsidy benefits) * * * Crossownership does not require one corporation 

to own 100 percent of the other corporation. 

Normally, cross-ownership will exist where 

there is a majority voting ownership interest 

between two corporations or through 

common ownership of two (or more) 

corporations. In certain circumstances, a 

large minority voting interest (for example, 

40 percent) or a ‘‘golden share’’ may also 

result in cross-ownership. 

See Countervailing Duties; Final Rule, 

63 FR 65348 (November 25, 1998), at 

65401. 

Thus, the Department’s regulations 

make clear that the agency must look at 

the facts presented in each case in 

determining whether cross-ownership 

exists. 

The CIT has upheld the Department’s 

authority to attribute subsidies based on 

whether a company could use or direct 

the subsidy benefits of another company 

in essentially the same way it could use 

its own subsidy benefits. See Fabrique 

de Fer de Charleroi, SA v. United States, 

166 F. Supp. 2d 593, 600–604 (CIT 

2001). 

Fine Furniture 

Fine Furniture responded to the 

Department’s original and supplemental 

questionnaires on behalf of itself and its 

affiliated parties Great Wood (Tonghua) 

Ltd. (‘‘Great Wood’’) and Fine Furniture 

Plantation (Shishou) Ltd. (‘‘FF 

Plantation’’). These companies are crossowned within the meaning of 19 CFR 

351.525(b)(6)(vi) by virtue of common 

ownership. See FFQR at 4 and 6. 

Because Fine Furniture is a producer 

of subject merchandise, we are 

preliminarily attributing subsidies 

received by Fine Furniture to its sales, 

in accordance with 19 CFR 

351.525(b)(6). 

Fine Furniture identified Great Wood 

as a supplier of kiln dried lumber, cutto-size lumber, and face veneer for 

furniture and flooring. See FFQR at 4. 

Because these products are primarily 

dedicated to the production of the 

downstream product, we are 

preliminarily attributing subsidies 

received by Great Wood to the 

combined sales of Great Wood and Fine 

Furniture (excluding intercompany 

sales), in accordance with 19 CFR 

351.525(b)(6)(iv). 

Fine Furniture identified FF 

Plantation as a supplier of plywood 

cores to Fine Furniture for the 

production of wood flooring. See FFQR 

at 6. Because these products are 

primarily dedicated to the production of 

the downstream product, we are 

preliminarily attributing subsidies 

received by FF Plantation to the 

combined sales of FF Plantation and 

Fine Furniture (excluding intercompany 

sales), in accordance with 19 CFR 

351.525(b)(6)(iv). 

Entered Value (‘‘EV’’) Adjustment 

Fine Furniture has reported that its 

affiliate, Double F Ltd. (‘‘Double F’’), 

issued invoices for Fine Furniture’s 

sales of subject merchandise to the 

United States. Thus, Fine Furniture has 

requested the Department make an 

adjustment to the calculated subsidy 

rate to account for the mark-up between 

the export value from the PRC and the 

entered value of subject merchandise 

into the United States. 

Citing the Coated Paper Decision 

Memorandum, Fine Furniture states that 

the adjustment is appropriate for six 

reasons. See Certain Coated Paper 

Suitable for High-Quality Print Graphics 

Using Sheet-Fed Presses from Indonesia: 

Final Affirmative Countervailing Duty 

Determination, 75 FR 59209 (September 

27, 2010) and accompanying Issues and 

Decision Memorandum (‘‘Coated Paper 

Decision Memorandum’’) at Comment 

32. The six reasons are: (1) The U.S. 

invoice is issued through Fine 

Furniture’s affiliate, Double F, and 

includes a mark-up from the invoice 

issued from Fine Furniture to Double F; 

(2) the exporter, Fine Furniture, and the 

party that invoices the customer, Double 

F, are affiliated; (3) the U.S. invoice 

establishes the customs value to which 

CVDs are applied; (4) there is a one-toone correlation between the Double F 

invoice and the Fine Furniture invoice; 

(5) the merchandise is shipped directly 

to the United States; and (6) the invoices 

can be tracked as back-to-back invoices 

that are identical except for price. See 

FFQR at 26. 

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As indicated by the determination 

cited by Fine Furniture, the Department 

has a practice of making an adjustment 

to the calculated subsidy rate when the 

sales value used to calculate that 

subsidy rate does not match the entered 

value of the merchandise, i.e., where 

subject merchandise exported to the 

United States is exported with a markup from an affiliated company, and 

where the respondent can provide data 

to demonstrate that the six criteria 

above are met. In the instant case, the 

information submitted by Fine 

Furniture supports its claim and the 

information also permits an accurate 

calculation of the adjustment. Therefore, 

we have made the adjustment for this 

preliminary determination. 

The information submitted by Fine 

Furniture in support of its claim and the 

amounts used to calculate the 

adjustment are business proprietary. See 

Memorandum from Matthew Jordan, 

International Trade Compliance 

Analyst, ‘‘Preliminary Results 

Calculations for Fine Furniture,’’ (March 

21, 2011). 

Layo 

Layo responded on behalf of itself, a 

producer of subject merchandise, as 

well as on behalf of Jiaxing Brilliant 

Import & Export Co., Ltd. (‘‘Brilliant’’), 

an affiliated trading company. See LQR 

at 3. 

Because Layo is a producer of subject 

merchandise, we are preliminarily 

attributing subsidies received by Layo to 

its sales, in accordance with 19 CFR 

351.525(b)(6). 

Layo reported that it made export 

sales of subject merchandise to the 

United States during the POI through 

Brilliant. See LQR (Brilliant) at 2. Thus, 

in accordance with 19 CFR 351.525(c), 

we are preliminarily cumulating the 

benefit from subsidies provided to 

Brilliant with the benefit from subsidies 

provided to Layo. 

Yuhua 

Yuhua responded on behalf of itself, 

a producer of subject merchandise. 

Yuhua identified affiliated companies 

but reported that these affiliates do not 

produce the subject merchandise or 

provide inputs primarily dedicated to 

the production of the downstream 

products. See YQR at Exhibit 1. Because 

these companies do not fall within the 

situations described in 19 CFR 

351.525(b)(6)(iii)–(v), we do not reach 

the issue of whether these companies 

and Yuhua are cross-owned within the 

meaning of 19 CFR 351.525(b)(6)(vi), 

and we are not including these 

companies in our subsidy calculations. 

Discount Rates for Allocating NonRecurring Subsidies 

Consistent with 19 CFR 

351.524(d)(3)(i)(C), we have used, as our 

discount rate, the long-term interest rate 

calculated according to the methodology 

described below for the year in which 

the government agreed to provide the 

subsidy. 

Short-Term RMB Interest Rate 

Benchmark 

The Department’s regulations at 19 

CFR 351.524(d)(3) state that Department 

will use as a discount rate the following, 

in order of preference: (A) The cost of 

long-term, fixed-rate loans of the firm in 

question, excluding any loans that the 

Department has determined to be 

countervailable subsidies; (B) the 

average cost of long-term, fixed-rate 

loans in the country in question; or (C) 

a rate that the Department considers to 

be most appropriate. For the reasons 

explained in CFS from the PRC, loans 

provided by Chinese banks reflect 

significant government intervention in 

the banking sector and do not reflect 

rates that would be found in a 

functioning market. See CFS Decision 

Memorandum at Comment 10. Because 

of this, any loans received by 

respondents from private Chinese or 

foreign-owned banks would be 

unsuitable for use as a discount rate 

under 19 CFR 351.524(d)(3)(i)(A). 

Similarly, we cannot use a national 

interest rate for commercial loans as 

envisaged by 19 CFR 351.524(d)(3)(i)(A). 

Therefore, because of the special 

difficulties inherent in using a Chinese 

benchmark for loans, the Department is 

selecting an external market-based 

benchmark interest rate. The use of an 

external benchmark is consistent with 

the Department’s practice. For example, 

in lumber from Canada, the Department 

used U.S. timber prices to measure the 

benefit for government-provided timber 

in Canada. See Notice of Final 

Affirmative Countervailing Duty 

Determination and Final Negative 

Critical Circumstances Determination: 

Certain Softwood Lumber Products 

From Canada, 67 FR 15545 (April 2, 

2002) and accompanying Issues and 

Decision Memorandum at ‘‘Analysis of 

Programs, Provincial Stumpage 

Programs Determined to Confer 

Subsidies, Benefit.’’ 

We are calculating the external 

benchmark using the regression-based 

methodology first developed in CFS 

from the PRC and updated in LWTP 

from the PRC. See CFS Decision 

Memorandum at Comment 10 and 

LWTP Decision Memorandum at 8–10. 

This benchmark interest rate is based on 

the inflation-adjusted interest rates of 

countries with per capita gross national 

incomes (‘‘GNIs’’) similar to the PRC, 

and takes into account a key factor 

involved in interest rate formation, that 

of the quality of a country’s institutions, 

that is not directly tied to the stateimposed distortions in the banking 

sector discussed above. 

Following the methodology 

developed in CFS from the PRC, we first 

determined which countries are similar 

to the PRC in terms of GNI, based on the 

World Bank’s classification of countries 

as low income, lower-middle income, 

upper-middle income, and high income. 

The PRC falls in the lower-middle 

income category, a group that includes 

55 countries. See The World Bank 

Country Classification, http:// 

econ.worldbank.org/. As explained in 

CFS from the PRC, this pool of countries 

captures the broad inverse relationship 

between income and interest rates. 

Many of these countries reported 

lending and inflation rates to the 

International Monetary Fund, and they 

are included in that agency’s 

international financial statistics (‘‘IFS’’). 

With the exceptions noted below, we 

have used the interest and inflation 

rates reported in the IFS for the 

countries identified as ‘‘low middle 

income’’ by the World Bank. First, we 

did not include those economies that 

the Department considered to be nonmarket economies for AD purposes for 

any part of the years in question, for 

example: Armenia, Azerbaijan, Belarus, 

Georgia, Moldova, Turkmenistan. 

Second, the pool necessarily excludes 

any country that did not report both 

lending and inflation rates to IFS for 

those years. Third, we removed any 

country that reported a rate that was not 

a lending rate or that based its lending 

rate on foreign-currency denominated 

instruments. For example, Jordan 

reported a deposit rate, not a lending 

rate, and the rates reported by Ecuador 

and Timor L’Este are dollardenominated rates; therefore, the rates 

for these three countries have been 

excluded. Finally, for each year the 

Department calculated an inflationadjusted short-term benchmark rate, we 

have also excluded any countries with 

aberrational or negative real interest 

rates for the year in question. 

The resulting inflation-adjusted 

benchmark lending rates are provided in 

the Memorandum from Shane Subler to 

the File, ‘‘Discount Rates for Allocating 

Non-recurring Subsidies’’ (March 10, 

2011). 

Benchmarks for Long-Term Loans 

The lending rates reported in the IFS 

represent short- and medium-term 

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lending, and there are not sufficient 

publicly available long-term interest rate 

data upon which to base a robust 

benchmark for long-term loans. To 

address this problem, the Department 

has developed an adjustment to the 

short- and medium-term rates to convert 

them to long-term rates using Bloomberg 

U.S. corporate BB-rated bond rates. See, 

e.g., Light-Walled Rectangular Pipe and 

Tube From People’s Republic of China: 

Final Affirmative Countervailing Duty 

Investigation Determination, 73 FR 

35642 (June 24, 2008) and 

accompanying Issues and Decision 

Memorandum at 8. In Citric Acid from 

the PRC, this methodology was revised 

by switching from a long-term mark-up 

based on the ratio of the rates of BBrated bonds to applying a spread which 

is calculated as the difference between 

the two-year BB bond rate and the nyear BB bond rate, where n equals or 

approximates the number of years of the 

term of the loan in question. See Citric 

Acid and Certain Citrate Salts From the 

People’s Republic of China: Final 

Affirmative Countervailing Duty 

Determination, 74 FR 16836 (April 13, 

2009) (‘‘Citric Acid from the PRC’’) and 

accompanying Issues and Decision 

Memorandum (‘‘Citric Acid Decision 

Memorandum’’) at Comment 14. 

Analysis of Programs 

Based upon our analysis of the 

petition and the responses to our 

questionnaires, we preliminarily 

determine the following: 

I. Programs Preliminarily Determined To 

Be Countervailable 

Income Tax Subsidies for FIEs Based on 

Geographic Location 

To promote economic development 

and attract foreign investment, 

‘‘productive’’ FIEs located in coastal 

economic zones, special economic 

zones or economic and technical 

development zones in the PRC were 

subject to preferential tax rates of 15 

percent or 24 percent, depending on the 

zone. See GQR at Exhibit A–1. These 

preferential rates were established on 

June 15, 1988, pursuant to the 

Provisional Rules on Exemption and 

Reduction of Corporate Income Tax and 

Business Tax of FIEs in Coastal 

Economic Development Zone issued by 

the Ministry of Finance, and continued 

under Article 7 of the FIE Tax Law on 

July 1, 1991. The Department has 

previously found the preferential tax 

rates for FIEs based on geographic 

location to be countervailable. See Citric 

Acid Decision Memorandum at 14–15 

and CFS Decision Memorandum at 12. 

As a result of the transition provisions 

of the new Enterprise Income Tax Law, 

which came into force on January 1, 

2008, enterprises that were eligible for 

the reduced rates of 15 percent or 24 

percent are to be gradually transitioned 

to the uniform rate of 25 percent over 

a five-year period. See G1SR at SGQ1– 

2. 

Fine Furniture reported using this 

program during the POI. See FFQR at 

18. In particular, because of its location 

Fine Furniture was entitled to a 15 

percent rate until December 31, 2007. 

See FFQR at 18. Under the transition 

rules, the State Council Notice on 

Implementation of Transnational 

Preferential Policies, Fine Furniture’s 

maximum tax rate increased to 18 

percent in 2008. See G1SR at SGQ1–2. 

We preliminarily determine that the 

reduced income tax rate paid by 

productive FIEs under this program 

confers a countervailable subsidy. The 

reduced rate is a financial contribution 

in the form of revenue forgone by the 

GOC and it provides a benefit to the 

recipient in the amount of the tax 

savings. See section 771(5)(D)(ii) of the 

Act and 19 CFR 351.509(a)(1). We 

further determine preliminarily that the 

reduction afforded by this program is 

limited to enterprises located in 

designated geographic regions and, 

hence, is specific under section 

771(5A)(D)(iv) of the Act. 

To calculate the benefit, we treated 

the income tax savings enjoyed by Fine 

Furniture as a recurring benefit, 

consistent with 19 CFR 351.524(c)(1). 

To compute the amount of the tax 

savings, we compared the income tax 

Fine Furniture would have paid in the 

absence of the program (i.e., 25 percent) 

with the maximum tax rate applicable to 

the company for the tax return filed 

during the POI (i.e., 18 percent). 

We divided the benefits received by 

Fine Furniture in the POI by its sales 

during the POI, in accordance with 19 

CFR 351.525(b)(6)(i). On this basis, we 

preliminarily determine that Fine 

Furniture received a countervailable 

subsidy of 0.09 percent ad valorem 

under this program. 

2. Income Tax Exemption/Reduction 

Under the Two Free/Three Half Program 

Under Article 8 of the FIE Tax Law, 

an FIE that is ‘‘productive’’ and is 

scheduled to operate for more than ten 

years may be exempted from income tax 

in the first two years of profitability and 

pay income taxes at half the standard 

rate for the subsequent three years. See 

GQR at Exhibit A–1. The Department 

has previously found this program 

countervailable. See, e.g., CFS Decision 

Memorandum at 10–11. 

Fine Furniture reported that it and 

Great Wood used this program during 

the POI. See FFQR at 14. Specifically, in 

2008, Fine Furniture was in the second 

year of paying taxes at half its normal 

tax rate. See FFQR at 16. Great Wood 

was in its first of two tax-free years. See 

FFQR at 16. 

We preliminarily determine that the 

exemption or reduction of the income 

tax paid by productive FIEs under this 

program confers a countervailable 

subsidy. The exemption/reduction is a 

financial contribution in the form of 

revenue forgone by the GOC, and it 

provides a benefit to the recipient in the 

amount of the tax savings. See section 

771(5)(D)(ii) of the Act and 19 CFR 

351.509(a)(1). We also preliminarily 

determine that the exemption/reduction 

afforded by this program is limited as a 

matter of law to certain enterprises, i.e., 

‘‘productive’’ FIEs and, hence, is specific 

under section 771(5A)(D)(i) of the Act. 

See CFS Decision Memorandum at 

Comment 14. 

To calculate the benefit, we treated 

the income tax savings enjoyed by Fine 

Furniture and Great Wood as a recurring 

benefit, consistent with 19 CFR 

351.524(c)(1). To compute the amount 

of the tax savings, we compared the 

income tax the above companies would 

have paid in the absence of the program 

(i.e., at the rates of 18 percent for Fine 

Furniture and 25 percent for Great 

Wood) with the income tax the 

companies actually paid during the POI 

(i.e., at the rates of nine percent for Fine 

Furniture and zero percent for Great 

Wood). 

For Fine Furniture, we divided the 

benefits received in the POI by its sales 

during the POI, in accordance with 19 

CFR 351.525(b)(6)(i). For Great Wood, 

we divided the benefits received in the 

POI by the combined sales of Fine 

Furniture and Great Wood, less 

intercompany sales, in accordance with 

19 CFR 351.525(b)(6)(iv). On this basis, 

we preliminarily determine that Fine 

Furniture received a countervailable 

subsidy of 0.15 percent ad valorem 

under this program. 

3. VAT and Tariff Exemptions on 

Imported Equipment 

Enacted in 1997, the Circular of the 

State Council on Adjusting Tax Policies 

on Imported Equipment (GUOFA No. 

37) exempts both FIEs and certain 

domestic enterprises from the value 

added tax (‘‘VAT’’) and tariffs on 

imported equipment used in their 

production so long as the equipment 

does not fall into prescribed lists of noneligible items. Qualified enterprises 

receive a certificate of entitlement either 

from the NDRC or its provincial branch. 

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The Department has previously found 

this program to be countervailable. See 

Citric Acid Decision Memorandum at 

19–20, CFS Decision Memorandum at 

14, and Certain Seamless Carbon and 

Alloy Steel Standard, Line, and Pressure 

Pipe from the People’s Republic of 

China: Final Affirmative Countervailing 

Duty Determination, Final Affirmative 

Critical Circumstances Determination, 

75 FR 57444 (September 21, 2010) and 

accompanying Issues and Decision 

Memorandum at 23–25. 

Fine Furniture and Great Wood 

reported using this program and 

provided a list of VAT and tariff 

exemptions that they received for 

imported capital equipment since 

December 11, 2001. See FFQR at 21 and 

Exhibit 14. 

We preliminarily determine that VAT 

and tariff exemptions on imported 

equipment confer a countervailable 

subsidy. The exemptions are a financial 

contribution in the form of revenue 

forgone by the GOC and they provide a 

benefit to the recipients in the amount 

of the VAT and tariff savings. See 

section 771(5)(D)(ii) of the Act and 19 

CFR 351.510(a)(1). We further determine 

the VAT and tariff exemptions under 

this program are specific under section 

771(5A)(D)(i) because the program is 

limited to certain enterprises, i.e., FIEs 

and domestic enterprises with 

government-approved projects. See CFS 

Decision Memorandum at Comment 16. 

Normally, we treat exemptions from 

indirect taxes and import charges, such 

as the VAT and tariff exemptions, as 

recurring benefits, consistent with 19 

CFR 351.524(c)(1), and expense these 

benefits in the year in which they were 

received. However, when an indirect tax 

or import charge exemption is provided 

for, or tied to, the capital structure or 

capital assets of a firm, the Department 

may treat it as a non-recurring benefit 

and allocate the benefit to the firm over 

the AUL. See 19 CFR 351.524(c)(2)(iii) 

and 19 CFR 351.524(d)(2). Because these 

VAT and tariff exemptions were 

received for capital equipment, we are 

applying the allocation rules described 

in 19 CFR 351.524(b), as explained 

below. 

For Fine Furniture and Great Wood, 

we applied the ‘‘0.5 percent test,’’ 

pursuant to 19 CFR 351.524(b)(2), for 

each of the years in which exemptions 

were reported (treating the year of 

receipt as the year of approval). For the 

years in which the amount was less than 

0.5 percent, we have expensed the 

exempted amounts in the year of 

receipt, consistent with 19 CFR 

351.524(b)(2). For those years in which 

the VAT and tariff exemptions were 

greater than or equal to 0.5 percent, we 

have allocated the benefit over the AUL, 

consistent with 19 CFR 351.524(b)(1). 

We used the discount rate described 

above in the ‘‘Benchmarks and Discount 

Rates’’ section to calculate the amount of 

the benefit for the POI. 

For Fine Furniture, we divided the 

benefits received in or allocated to the 

POI by its sales during the POI, in 

accordance with 19 CFR 

351.525(b)(6)(i). For Great Wood, we 

divided the benefits received in or 

allocated to the POI by the combined 

POI sales of Fine Furniture and Great 

Wood, less intercompany sales, in 

accordance with 19 CFR 

351.525(b)(6)(iv). 

On this basis, we preliminarily 

determine that Fine Furniture received 

a countervailable subsidy of 0.56 

percent ad valorem. 

4. Electricity for LTAR 

For the reasons explained in the ‘‘Use 

of Facts Otherwise Available and 

Adverse Inferences’’tion above, we are 

basing our determination regarding the 

government’s provision of electricity in 

part on AFA. 

In a CVD case, the Department 

requires information from both the 

government of the country whose 

merchandise is under investigation and 

the foreign producers and exporters. 

When the government fails to provide 

requested information concerning 

alleged subsidy programs, the 

Department, as AFA, typically finds that 

a financial contribution exists under the 

alleged program and that the program is 

specific. However, where possible, the 

Department will normally rely on the 

responsive producer’s or exporter’s 

records to determine the existence and 

amount of the benefit to the extent that 

those records are useable and verifiable. 

Consistent with this practice, the 

Department finds that the GOC’s 

provision of electricity confers a 

financial contribution, under section 

771(5)(D)(iii) of the Act, and is specific, 

under section 771(5A) of the Act. To 

determine the existence and amount of 

any benefit from this program, we relied 

on the companies’’ reported information 

on the amounts of electricity they 

purchased and the amounts they paid 

for electricity during the POI. We 

compared the rates paid by Fine 

Furniture, Layo, and Yuhua for their 

electricity to the highest rates that they 

would have paid in the PRC during the 

POI. Specifically, we compared 

respondents’’ electricity payments to 

what the respondents would have paid 

under the highest rates on the record for 

the same user category (e.g., ‘‘large 

industrial users’’) and time period 

category (e.g., peak, normal, and valley). 

This benchmark reflects the adverse 

inference we have drawn as a result of 

the GOC’s failure to act to the best of its 

ability in providing requested 

information about its provision of 

electricity in this investigation. 

On this basis, we preliminarily 

determine the countervailable subsidy 

rate to be 1.45 percent ad valorem for 

Fine Furniture. Because the preliminary 

countervailable subsidy rate for both 

Layo and Yuhua is less than 0.005 

percent, we did not include this 

program in our preliminary net 

countervailing duty rates for these 

companies. See, e.g., CFS Decision 

Memorandum at 15. 

II. Programs for Which More 

Information Is Required: Potential 

Subsidies in Layo’s and Yuhua’s 

Financial Statements 

Layo’s and Yuhua’s financial 

statements indicate that both companies 

may have received certain additional 

subsidies. See L1SR at 6; see also Y1SR 

at 3–4. Because the companies did not 

disclose these potential subsidies in 

their original questionnaire responses, 

we did not have time to request and 

analyze information from the GOC on 

these programs prior to the preliminary 

determination. We intend to request this 

information from the GOC and address 

these programs after this preliminary 

determination. 

III. Programs Preliminarily Determined 

To Be Not Used by Respondents 

We preliminarily determine that the 

respondent companies did not apply for 

or receive benefits during the POI under 

the programs listed below. 

1. Local Income Tax Exemption and 

Reductions for ‘‘Productive’’ FIEs 

2. Provision of Electricity at LTAR for 

FIEs and ‘‘Technologically Advanced’’ 

Enterprises by Jiangsu Province 

Verification 

In accordance with section 782(i)(1) of 

the Act, we will verify the information 

submitted by the respondents prior to 

making our final determination. 

Suspension of Liquidation 

In accordance with section 

703(d)(1)(A)(i) of the Act, we calculated 

an individual rate for each producer/ 

exporter of the subject merchandise 

individually investigated. We 

preliminarily determine the total 

estimated net countervailable subsidy 

rates to be: 

mstockstill on DSKH9S0YB1PROD with NOTICES

19042 Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 

Exporter/manufacturer 

Net 

subsidy 

rate 

Fine Furniture (Shanghai) Ltd.; 

Great Wood (Tonghua) Ltd.; 

Fine Furniture Plantation 

(Shishou) Ltd.

2.25 

Zhejiang Layo Wood Industry 

Co., Ltd.; Jiaxing Brilliant Import & Export Co., Ltd.

Zero 

Zhejiang Yuhua Timber Co., Ltd Zero 

9 Miles Oak Flooring (China) ..... 27.01 

Anhui Hupo Wood Industry Co., 

Ltd.

27.01 

Anji Tianpeng Bamboo & Wooden Floor Co., Ltd.27.01 

Anlian Wood Co., Ltd ................. 27.01 

Beijing Forever Strong Construction & Decoration Material Co., 

Ltd.

27.01 

Beijing New Building Material 

(Group) Co., Ltd.

27.01 

Beijing W.A. Wood Co., Ltd ....... 27.01 

Cairun Floor Building Material 

Co., Ltd.

27.01 

Changchun Zhongyi Wood Co., 

Ltd.

27.01 

Changzhou Credit International 

Trade Co., Ltd.

27.01 

Changzhou Green Spot Wood 

Industry Co., Ltd.

27.01 

Changzhou Jiahao Wood Trade 

Co., Ltd.

27.01 

Changzhou Leili Wood Industry 

Co., Ltd.

27.01 

Changzhou Opls Decoration Materials Co., Ltd.27.01 

Chaohu Great Mainland Flooring 

Co., Ltd.

27.01 

Chaohu Vgreen Timber Co., Ltd 27.01 

China Xuzhou Tengmao Wood 

Co., Ltd.

27.01 

Chuangfu Wood Flooring Cld., 

Co.

27.01 

Complete Flooring Supply Corporation.27.01 

Dalian Brilliant Future International Trade Co., Ltd.27.01 

Dalian Hongjia Imp. & Exp. Co., 

Ltd.

27.01 

Dalian Luming Group ................. 27.01 

Dalian Maruni Wood Works Co., 

Ltd.

27.01 

Dalian Ontime International 

Trade Co.

27.01 

Dalian Taiyangshi International 

Trading Co., Ltd.

27.01 

Dalian Turuss Wood Industry 

Co., Ltd.

27.01 

Dongguan Forest Century 

Wooden Co., Ltd.

27.01 

Elegant Living Corporation ......... 27.01 

Foshan Linguan Wood Products 

Co., Ltd.

27.01 

Foshan Pengbang Wood Manufacturer Co., Ltd.27.01 

Foshan Shunde 

Hechengchuangzhan Wood 

Co., Ltd.

27.01 

Foshan Tocho Timber Co., Ltd .. 27.01 

Fujian Jianou Huayu Bamboo Industry Co., Ltd.27.01 

Fuzhou Floors China Co., Ltd .... 27.01 

Gao’an City Kangli Bamboo And 

Wooden Products Co., Ltd.

27.01 

Exporter/manufacturer 

Net 

subsidy 

rate 

Giant Flooring ............................. 27.01 

Glassical Industrial Limited ......... 27.01 

Great Forest Wood Limited ........ 27.01 

Green Elf Flooring (Also Dba 

Hong Ding Lumber Co.).

27.01 

Guangdong Guangyang Hi-Tech 

Industry Co., Ltd.

27.01 

Guangdong Yingran Wood Industry.27.01 

Guangzhou Fnen Wood Flooring 27.01 

Guangzhou Homewell Trade 

Co., Ltd.

27.01 

Guangzhou Quanfeng Wood Industry Co., Ltd.27.01 

Handan Global Wood Limited .... 27.01 

Hangzhou Dazhuang Floor Co ... 27.01 

Hangzhou Fuyang Zhongjian 

Wood Industry Co., Ltd.

27.01 

Hangzhou Kingdom Imp & Exp 

Trading Corp., Ltd.

27.01 

Hangzhou Singular Group Co., 

Ltd.

27.01 

Hangzhou Tianlin Industrial Co., 

Ltd.

27.01 

Heze Lv Sen Wood Co., Ltd ...... 27.01 

Homewell (Xiamen) Industry Co., 

Ltd.

27.01 

Huidong Weikang Rubber & 

Plastic Products Co., Ltd.

27.01 

Hu’made Group .......................... 27.01 

Huzhou Boge Import And Export 

Co., Ltd.

27.01 

Huzhou Jinjie Industrial Co., Ltd 27.01 

Huzhou Natural Forest Flooring 

Co., Ltd.

27.01 

Huzhou Tianlong Wood Co., Ltd 27.01 

Huzhou Top Wood Co., Ltd ....... 27.01 

Huzhou Yaxin Arts & Crafts Co., 

Ltd.

27.01 

Jiangmen Xinhui Yinhu Woodwork Co., Ltd.27.01 

Jiangsu Happy Wood Industrial 

Group Co., Ltd.

27.01 

Jiangsu Horizon Trade Co., Ltd 27.01 

Jiangsu Kentier Wood Co., Ltd .. 27.01 

Jiangsu Nanyang Wood Co., Ltd 27.01 

Jiangsu Wanli Wooden Co., Ltd 27.01 

Jiangxi Kangtilong Bamboo 

Products Co., Ltd.

27.01 

Jiashan Greenland International 

Trading Co., Ltd.

27.01 

Jiashan Huayu Lumber Co., Ltd 27.01 

Jiashan Longsen Lumbering Co., 

Ltd.

27.01 

Jiashan On-Line Lumber Co., 

Ltd.

27.01 

Jiaxing Hengtong Wood Co., Ltd 27.01 

Jilin Newco Wood Industries 

Co., Ltd.

27.01 

Jining Sensen Wood Industry 

Co., Ltd.

27.01 

Jining Sunny Wood Co., Ltd ...... 27.01 

Kingswood Timber ...................... 27.01 

Kornbest Enterprises Ltd ............ 27.01 

Lianyungang Shuntian Timber 

Co., Ltd.

27.01 

Longeron I&E Co., Ltd ................ 27.01 

Lord Parquet Industry Co., Limited.27.01 

Lyowood Industrial Co., Ltd ........ 27.01 

Macdouglas Wood Flooring 

(Suzhou) Co., Ltd.

27.01 

Exporter/manufacturer 

Net 

subsidy 

rate 

Nanjing Dimac Wood Industry 

Co., Ltd.

27.01 

Qiaosen Wood Flooring Industry 

Company.

27.01 

Qichuang Wood Industrial Co., 

Ltd.

27.01 

Qingdao Fuguichao Wood Co., 

Ltd.

27.01 

Quanfa Woodwork (Shenzhen) 

Co., Ltd.

27.01 

Shandong Fuma Commerce & 

Trade Co., Ltd.

27.01 

Shandong Yuncheng Jinyang 

Wood Industry Co., Ltd.

27.01 

Shanghai Chunna Industrial Co., 

Ltd.

27.01 

Shanghai Eswell Enterprise Co., 

Ltd.

27.01 

Shanghai Feihong Wood Products Co.27.01 

Shanghai Guangri Flooring Co., 

Ltd.

27.01 

Shanghai Pinsheng Wood Industry Co., Ltd.27.01 

Shanghai Pujiang United Wood 

Co., Ltd.

27.01 

Shanghai Yiming Wooden Industry Co., Ltd.27.01 

Shenyang Bask Industry Co., Ltd 27.01 

Shenzhen Jianyuanxin Trade 

Co., Ltd.

27.01 

Shenzhen Shi Huanwei Woods 

Co., Ltd.

27.01 

Shuanghai Shuai Yuan Wood Industry Co., Ltd.27.01 

Sterling Pacific Wood Products 

Co., Ltd.

27.01 

Suifenhe Sanmulin Economic 

And Trade Co., Ltd.

27.01 

Suzhou Duolun Wood Industry 

Co., Ltd.

27.01 

Tengmao Wood Co., Ltd ............ 27.01 

Tianjin Zeyuan Wood Industry 

Co., Ltd.

27.01 

Times Flooring Co., Ltd .............. 27.01 

Twowins Bamboo & Wood Products Co., Ltd.27.01 

Ua Wood Floors ......................... 27.01 

Weifang Jiayuan Imp & Exp Co., 

Ltd.

27.01 

Wenzhou Timber Group Company.27.01 

Wuhan Nanhong Materials & 

Goods Fitting Co., Ltd.

27.01 

Wuxi Haisen Decorates Material 

Co., Ltd.

27.01 

Xiamen Homeshining Industry 

Co., Ltd.

27.01 

Xuzhou Fuxiang Wood Co., Ltd 27.01 

Xuzhou Huanqiu Import & Export 

Trade Co., Ltd.

27.01 

Xuzhou Tengmao Wood Co., Ltd 27.01 

Xuzhou Yijia Manufacture Co., 

Ltd.

27.01 

Xuzhou Yijia Wood Manufacture 

Co., Ltd.

27.01 

Yinlong Wood Products Co., Ltd 27.01 

Ys Nature International Trading 

Co., Ltd.

27.01 

Zhejiang Assun Wood Co., Ltd .. 27.01 

Zhejiang Gaopai Wood Co., Ltd 27.01 

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Federal Register / Vol. 76, No. 66 / Wednesday, April 6, 2011 / Notices 19043 

1MFVN is a company located in Vietnam and is 

a wholly owned subsidiary of Max Fortune 

Industrial Co., Ltd. (Max Fortune HK) located in 

Hong Kong. 

Exporter/manufacturer 

Net 

subsidy 

rate 

Zhejiang Huayue Wooden Products Co., Ltd.27.01 

Zhejiang Yongji Wooden Co., 

Ltd.

27.01 

Zhejiang Yongyu Bamboo Development.27.01 

Zhongshan New Oasis Wood Industry Co., Ltd.27.01 

Zhongyi Bamboo Industrial Co., 

Ltd. Fujian.

27.01 

All Others .................................... 2.25 

* Non-cooperative company receiving the 

AFA rate. See ‘‘Non-Cooperative Companies’’ 

section, above. 

In accordance with sections 

703(d)(1)(B) and (2) of the Act, we are 

directing CBP to suspend liquidation of 

all entries of wood flooring from the 

PRC that are entered, or withdrawn from 

warehouse, for consumption on or after 

the date of the publication of this notice 

in the Federal Register, and to require 

a cash deposit or bond for such entries 

of merchandise in the amounts 

indicated above. However, because the 

estimated CVD rate for Layo and Yuhua 

is de minimis, liquidation will not be 

suspended and no cash deposits or 

bonds are required for merchandise 

produced and exported by Layo or 

Yuhua. 

In accordance with sections 703(d) 

and 705(c)(5)(A) of the Act, for 

companies not investigated, we apply 

an ‘‘all-others’’ rate, which is normally 

calculated by weighting the subsidy 

rates of the individual companies 

selected as respondents by those 

companies’’ exports of the subject 

merchandise to the United States. The 

‘‘all-others’’ rate does not include zero 

and de minimis rates or any rates based 

solely on the facts available. In this 

investigation, because we have only one 

rate that can be used to calculate the 

‘‘all-others’’ rate, Fine Furniture’s rate, 

we have assigned that rate to ‘‘allothers.’’ 

ITC Notification 

In accordance with section 703(f) of 

the Act, we will notify the ITC of our 

determination. In addition, we are 

making available to the ITC all nonprivileged and non-proprietary 

information relating to this 

investigation. We will allow the ITC 

access to all privileged and business 

proprietary information in our files, 

provided the ITC confirms that it will 

not disclose such information, either 

publicly or under an administrative 

protective order, without the written 

consent of the Assistant Secretary for 

Import Administration. 

In accordance with section 705(b)(2) 

of the Act, if our final determination is 

affirmative, the ITC will make its final 

determination within 45 days after the 

Department makes its final 

determination. 

Disclosure and Public Comment 

In accordance with 19 CFR 

351.224(b), we will disclose to the 

parties the calculations for this 

preliminary determination within five 

days of its announcement. Due to the 

anticipated timing of verification and 

issuance of verification reports, case 

briefs for this investigation must be 

submitted no later than one week after 

the issuance of the last verification 

report. See 19 CFR 351.309(c)(i) (for a 

further discussion of case briefs). 

Rebuttal briefs must be filed within five 

days after the deadline for submission of 

case briefs, pursuant to 19 CFR 

351.309(d)(1). A list of authorities relied 

upon, a table of contents, and an 

executive summary of issues should 

accompany any briefs submitted to the 

Department. Executive summaries 

should be limited to five pages total, 

including footnotes. See 19 CFR 

351.309(c)(2) and (d)(2). 

Section 774 of the Act provides that 

the Department will hold a public 

hearing to afford interested parties an 

opportunity to comment on arguments 

raised in case or rebuttal briefs, 

provided that such a hearing is 

requested by an interested party. If a 

request for a hearing is made in this 

investigation, the hearing will be held 

two days after the deadline for 

submission of the rebuttal briefs, 

pursuant to 19 CFR 351.310(d), at the 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230. Parties should 

confirm by telephone the time, date, and 

place of the hearing 48 hours before the 

scheduled time. 

Interested parties who wish to request 

a hearing, or to participate if one is 

requested, must submit a written 

request to the Assistant Secretary for 

Import Administration, U.S. Department 

of Commerce, Room 1870, 14th Street 

and Constitution Avenue, NW., 

Washington, DC 20230, within 30 days 

of the publication of this notice, 

pursuant to 19 CFR 351.310(c). Requests 

should contain: (1) The party’s name, 

address, and telephone; (2) the number 

of participants; and (3) a list of the 

issues to be discussed. Oral 

presentations will be limited to issues 

raised in the briefs. Id. 

This determination is published 

pursuant to sections 703(f) and 777(i) of 

the Act. 

Dated: March 21, 2011. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2011–8173 Filed 4–5–11; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–894] 

Certain Tissue Paper Products From 

the People’s Republic of China: 

Preliminary Affirmative Determination 

of Circumvention of the Antidumping 

Duty Order 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

Preliminary Determination 

We preliminarily determine that 

certain tissue paper products (tissue 

paper) produced and/or exported by 

Max Fortune (Vietnam) Paper Products 

Company, Limited (MFVN) 1 to the 

United States from Vietnam are made 

from jumbo rolls and/or cut sheets of 

tissue paper produced in the People’s 

Republic of China (PRC), and are 

circumventing the antidumping duty 

order on tissue paper from the PRC, as 

provided in section 781(b) of the Tariff 

Act of 1930, as amended (the Act). See 

Notice of Amended Final Determination 

of Sales at Less than Fair Value and 

Antidumping Duty Order: Certain 

Tissue Paper Products from the People’s 

Republic of China, 70 FR 16223 (March 

30, 2005) (PRC Tissue Paper Order). 

DATES: Effective Date: April 6, 2011. 

FOR FURTHER INFORMATION CONTACT: 

Brian Smith or Gemal Brangman, AD/ 

CVD Operations, Office 2, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–1766 or (202) 482– 

3773, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On February 19, 2010, the Seaman 

Paper Company of Massachusetts, Inc. 

(the petitioner) requested that the 

Department of Commerce (the 

Department) initiate an anticircumvention inquiry pursuant to 

section 781(b) of the Act, and 19 CFR 

351.225(h), to determine whether U.S. 

mstockstill on DSKH9S0YB1PROD with NOTICES