81574 Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 

1As stated in the initiation notice, due to the 

closure of the Federal Government in Washington 

D.C. between February 5 and February 12, 2010, the 

Department tolled its deadlines during that period, 

thereby extending the deadline for the initiation of 

this new shipper review by one week, to March 8, 

2010. See NSR Initiation, 75 FR at 10758. 

2 In contrast to the previous importer 

questionnaire, the second supplemental importer 

questionnaire was issued separately from the other 

questionnaires to SRF. 

notice. Requests should contain: (1) The 

party’s name, address and telephone 

number; (2) the number of participants; 

and (3) a list of issues to be discussed. 

See 19 CFR 351.310(c). Issues raised in 

the hearing will be limited to those 

raised in the case and rebuttal briefs. 

The Department will issue the final 

results of this review, including the 

results of its analysis of issues raised in 

any written briefs, within 90 days of 

signature of these preliminary results, 

unless the final results are extended. 

See section 751(a)(2)(B)(iv) of the Act. 

Notification to Importers 

This notice serves as a preliminary 

reminder to importers of their 

responsibility under 19 CFR 

351.402(f)(2) to file a certificate 

regarding the reimbursement of 

antidumping duties prior to liquidation 

of the relevant entries during this 

review period. Failure to comply with 

this requirement could result in the 

Secretary’s presumption that 

reimbursement of antidumping duties 

occurred and the subsequent assessment 

of double antidumping duties. 

This new shipper review is issued 

and published in accordance with 

sections 751(a)(2)(B)(iv) and 777(i)(1) of 

the Act, as well as 19 CFR 351.214(i). 

Dated: December 21, 2010. 

Christian Marsh, 

Acting Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2010–32680 Filed 12–27–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–533–825] 

Polyethylene Terephthalate Film, 

Sheet, and Strip From India: 

Preliminary Results of Countervailing 

Duty New Shipper Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

(the Department) is conducting a new 

shipper review under the countervailing 

duty (CVD) order on polyethylene 

terephthalate film, sheet and strip (PET 

film) from India in response to a request 

from SRF Limited (SRF). The period of 

review (POR) is January 1, 2009, 

through December 31, 2009. The 

domestic interested parties for this 

proceeding are DuPont Teijin Films, 

Mitsubishi Polyester Film, Inc., SKC, 

Inc. and Toray Plastics (America), Inc. 

(petitioners). 

We preliminarily determine that the 

U.S. sale of subject merchandise 

produced and exported by SRF was 

bona fide. See Bona Fides Analysis 

section below. We also preliminarily 

determine that SRF has benefitted from 

countervailable subsidies provided on 

the production and export of PET film 

from India. See the ‘‘Preliminary Results 

of Administrative Review’’ section, 

below. If the final results remain the 

same as the preliminary results of this 

review, we intend to instruct U.S. 

Customs and Border Protection (CBP) to 

assess countervailing duties. Interested 

parties are invited to comment on the 

preliminary results of this new shipper 

review. See the ‘‘Public Comment’’ 

section of this notice, below. The final 

results will be issued 90 days after the 

date of signature of these preliminary 

results, unless extended. 

DATES: Effective Date: December 28, 

2010. 

FOR FURTHER INFORMATION CONTACT: Elfi 

Blum or Toni Page, AD/CVD 

Operations, Office 6, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–0197 or (202) 482– 

1398, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On July 1, 2002, the Department 

published in the Federal Register the 

CVD order on PET film from India. See 

Notice of Countervailing Duty Order: 

Polyethylene Terephthalate Film, Sheet 

and Strip (PET Film) from India, 67 FR 

44179 (July 1, 2002) (PET Film Order). 

On December 24, 2009, the Department 

received a timely request from SRF, in 

accordance with section 751(a)(2)(B) of 

the Tariff Act of 1930, as amended (the 

Act) and 19 CFR 351.214(c), to conduct 

a semiannual new shipper review of the 

CVD duty order on PET film from India. 

The Department found the request for 

review met all of the requirements for 

initiation set forth in 19 CFR 351.214(b) 

and initiated the new shipper review on 

March 2, 2010, covering the period 

January 1, 2009, through December 31, 

2009. See Polyethylene Terephthalate 

Film, Sheet and Strip from India: 

Initiation of Antidumping Duty and 

Countervailing Duty New Shipper 

Reviews, 75 FR 10758 (March 9, 2010) 

(NSR Initiation).1

The Department issued the initial 

questionnaires to the Government of 

India (GOI) and to SRF and to its U.S. 

customer through SRF on April 6, 2010. 

On May 27, 2010, the GOI submitted its 

questionnaire response. SRF and its U.S. 

customer (through SRF) submitted their 

questionnaire responses on June 10, 

2010. The Department issued its first 

supplemental questionnaires to the GOI 

on July 8, 2010, and to SRF and to its 

U.S. customer (through SRF) on August 

10, 2010. On August 10, 2010, the GOI 

submitted its first supplemental 

response, and SRF and its U.S. customer 

submitted submitted their first 

supplemental responses on September 

8, 2010. The Department issued a 

second supplemental questionnaire to 

the GOI on August 25, 2010, and the 

GOI filed its second supplemental 

response on September 22, 2010. 

On August 18, 2010, the Department 

extended the deadline for the 

preliminary results of the countervailing 

duty administrative review from August 

29, 2010, to November 22, 2010. See 

Polyethylene Terephthalate Film, Sheet, 

and Strip from India: Extension of Time 

Limit for Preliminary Results of 

Countervailing Duty New Shipper 

Review, 75 FR 52717 (August 27, 2010). 

On November 5, 2010, the Department 

further extended the deadline for the 

preliminary results to December 14, 

2010, and then on December 14, 2010, 

the Department again extended the 

deadline to December 21, 2010. See 

Polyethylene Terephthalate Film, Sheet, 

and Strip from India: Extension of Time 

Limit for Preliminary Results of 

Countervailing Duty New Shipper 

Review, 75 FR 69400 (November 12, 

2010); Polyethylene Terephthalate Film, 

Sheet and Strip from India: Extension of 

Time Limit for Preliminary Results of 

Countervailing Duty New Shipper 

Review, 75 FR 79336 (December 20, 

2010). 

The Department issued a second 

supplemental questionnaire to SRF on 

November 22, 2010 and a second 

supplemental importer questionnaire on 

December 1, 2010.2 SRF’s U.S. customer 

(through SRF) filed its response to the 

second importer questionnaire on 

December 6, 2010. SRF’s second 

supplemental response is due after the 

preliminary results, on December 27, 

2010. 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 81575 

3SRF Original Response of June 10, 2010 (QR– 

SRF), at Exhibits 9(a)(i–ii). 

Scope of the Order 

For purposes of the order, the 

products covered are all gauges of raw, 

pretreated, or primed Polyethylene 

Terephthalate Film, Sheet and Strip, 

whether extruded or coextruded. 

Excluded are metallized films and other 

finished films that have had at least one 

of their surfaces modified by the 

application of a performance-enhancing 

resinous or inorganic layer of more than 

0.00001 inches thick. Imports of PET 

film are classifiable in the Harmonized 

Tariff Schedule of the United States 

(HTSUS) under item number 

3920.62.00.90. HTSUS subheadings are 

provided for convenience and customs 

purposes. The written description of the 

scope of this proceeding is dispositive. 

Bona Fides Analysis 

Consistent with Department practice, 

we examined the bona fides of the new 

shipper sale at issue. In evaluating 

whether or not a sale in an NSR is 

commercially reasonable, and therefore 

bona fide, the Department considers, 

inter alia, such factors as: (1) The timing 

of the sale; (2) the price and quantity; (3) 

the expenses arising from the 

transaction; (4) whether the goods were 

resold at a profit; and (5) whether the 

transaction was made on an arm’slength basis. See Tianjin Tiancheng 

Pharmaceutical Co., Ltd. v. United 

States, 366 F. Supp. 2d 1246, 1250 (Ct. 

Int’l Trade 2005) (TTPC). Accordingly, 

the Department considers a number of 

factors in its bona fides analysis, ‘‘all of 

which may speak to the commercial 

realities surrounding an alleged sale of 

subject merchandise.’’ See Hebei New 

Donghua Amino Acid Co., Ltd. v. United 

States, 374 F. Supp. 2d 1333, 1342 (Ct. 

Int’l Trade 2005) (New Donghua) (citing 

Fresh Garlic From the People’s Republic 

of China: Final Results of Antidumping 

Administrative Review and Rescission 

of New Shipper Review, 67 FR 11283 

(March 13, 2002), and accompanying 

Issues and Decision Memorandum (New 

Shipper Review of Clipper 

Manufacturing Ltd.)). In TTPC, the court 

also affirmed the Department’s decision 

that ‘‘any factor which indicates that the 

sale under consideration is not likely to 

be typical of those which the producer 

will make in the future is relevant,’’ 

(TTPC, 366 F. Supp. 2d at 1250), and 

found that ‘‘the weight given to each 

factor investigated will depend on the 

circumstances surrounding the sale.’’ 

TTPC, 366 F. Supp. 2d at 1263. Finally, 

in New Donghua, the Court of 

International Trade affirmed the 

Department’s practice of evaluating the 

circumstances surrounding an NSR sale, 

so that a respondent does not unfairly 

benefit from an atypical sale and obtain 

a lower rate than the producer’s usual 

commercial practice would dictate. 

Based on the totality of 

circumstances, we preliminarily find 

that the sale made by SRF during the 

POR was a bona fide commercial 

transaction. The facts that led us to this 

preliminary conclusion include the 

following: (1) Neither the price nor 

quantity were outside normal bounds; 

(2) neither SRF nor its customer 

incurred any extraordinary expenses 

arising from this transaction; (3) the sale 

was made between unaffiliated parties 

at arm’s length; and (4) the timing of the 

sale does not indicate that the sale was 

not bona fide. Since much of the factual 

information used in our analysis of the 

bona fides of the transaction involves 

business proprietary information, a full 

discussion of the bases for our decision 

is set forth in the Memorandum to 

Thomas Gilgunn, Program Manager, 

from Toni Page, International Trade 

Analyst, regarding Bona Fide Nature of 

the Sale in the Duty New Shipper 

Review of Polyethylene Terephthalate 

Film, Sheet, and Strip from India: SRF 

Limited (Bona Fides Memorandum), 

dated concurrently with this notice and 

on file in the Central Records Unit 

(CRU), room 7046 of the main 

Department of Commerce building. We 

will continue to examine the bona fides 

of SRF’s sale after the preliminary 

results. 

Period of Review 

The period of this countervailing new 

shipper review covers the period 

January 1, 2009, through December 31, 

2009. 

Subsidies Valuation Information 

Allocation Period 

SRF was not a respondent in the 

original investigation, nor was the 

company a respondent in any prior 

segment of this proceeding. In response 

to the Department’s original 

questionnaire and its first supplemental 

questionnaire, SRF proposed a 

company-specific average useful life 

(AUL) of 16.49 years for its plant and 

machinery. In Exhibits 9(a)(i–ii) of its 

original questionnaire response, SRF 

provided its depreciation schedule over 

the past 15 years, and a detailed list of 

assets for plant and machinery related to 

the production of subject merchandise, 

respectively.3 However, SRF also 

reported that for its two plants in the 

Packaging Division, SRF has 

depreciated its assets using a straightline methodology over either 8 years or 

19 years. We note that SRF has not fully 

explained why it used different 

depreciation periods for equipment 

producing the same merchandise nor 

how these different periods factored 

into its depreciation schedule. Based on 

these concerns, we preliminarily 

determine that SRF has not rebutted the 

presumption set forth in 19 CFR 351.524 

and that its company-specific AUL 

should not be used to determine the 

appropriate allocation period for nonrecurring subsidies. Rather, for purposes 

of these preliminary results we are using 

the IRS Tables. We are continuing to 

gather information on SRF’s calculation 

and will reconsider using SRF’s 

company-specific AUL in the final 

results. 

Benchmark Interest Rates and Discount 

Rates 

For programs requiring the 

application of a benchmark interest rate 

or discount rate, 19 CFR 351.505(a)(1) 

states a preference for using an interest 

rate that the company would pay on a 

comparable commercial loan that the 

company could have obtained in the 

market. Also, 19 CFR 351.505(a)(3)(i) 

states that when selecting a comparable 

commercial loan that the recipient 

‘‘could actually obtain on the market’’ 

the Department will normally rely on 

actual short-term and long-term loans 

obtained by the firm. However, when 

there are no comparable commercial 

loans, the Department may use a 

national average interest rate, pursuant 

to 19 CFR 351.505(a)(3)(ii). 

Pursuant to 19 CFR 351.505(a)(2)(iv), 

if a program under review is a 

government provided, short-term loan 

program, the preference would be to use 

a company-specific annual average of 

the interest rates on comparable 

commercial loans during the year in 

which the government-provided loan 

was taken out, weighted by the 

principal amount of each loan. For this 

review, the Department required a 

rupee-denominated short-term loan 

benchmark rate and a U.S. dollardenominated short-term benchmark rate 

to determine benefits received under the 

Pre-Shipment Export Financing 

program. For further information 

regarding this program, see the ‘‘PreShipment and Post-Shipment Export 

Financing’’ section below. 

In prior reviews of this case, the 

Department determined that Inland Bill 

Discounting (IBD) loans are more 

comparable to pre-shipment export 

financing and post-shipment export 

financing loans than other types of 

rupee-denominated short-term loans. 

See, e.g., Notice of Preliminary Results 

and Rescission in Part of Countervailing 


emcdonald on DSK2BSOYB1PROD with NOTICES
81576 Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 

Duty Administrative Review: 

Polyethylene Terephthalate Film, Sheet, 

and Strip from India, 70 FR 46483, 

46485 (August 10, 2005) (PET Film 

Preliminary Results of 2003 Review) 

unchanged in the final results, Final 

Results of Countervailing Duty 

Administrative Review: Polyethylene 

Terephthalate Film, Sheet, and Strip 

from India, 71 FR 7534 (February 13, 

2006), and accompanying Issues and 

Decision Memorandum (PET Film Final 

Results of 2003 Review). In the Notice of 

Preliminary Affirmative Countervailing 

Duty Determination and Alignment of 

Final Countervailing Duty 

Determination With Final Antidumping 

Duty Determination: Polyethylene 

Terephthalate Film, Sheet and Strip 

(PET Film) From India, 66 FR 53389, 

53390–91 (October 22, 2001) (PET Film 

Preliminary Determination), unchanged 

in the final determination, Notice of 

Final Affirmative Countervailing Duty 

Determination: Polyethylene 

Terephthalate Film, Sheet and Strip 

(PET Film) From India, 67 FR 34905 

(May 16, 2002), and accompanying 

Issues and Decision Memorandum (PET 

Film Final Determination), at 

‘‘Benchmarks for Loans and Discount 

Rates,’’ the Department determined that, 

in the absence of IBD loans, cash credit 

(CC) loans are the next most comparable 

type of short-term loans to pre-shipment 

export financing than other types of 

loans, for rupee-denominated preshipment export financing, because, like 

pre-shipment export financing, CC loans 

are denominated in rupees and take the 

form of a line of credit which can be 

drawn down by the recipient. See PET 

Film Preliminary Determination, 

unchanged in the PET Film Final 

Determination), at ‘‘Benchmarks for 

Loans and Discount Rates.’’ There is no 

new information or evidence of changed 

circumstances which would warrant 

reconsidering this finding. SRF reported 

receipt of pre-shipment export 

financing. However, SRF did not obtain 

IBD loans during the POR. SRF did take 

out CC short-term loans during the POR. 

Therefore, for these preliminary results, 

we used SRF’s weighted average CC 

loans as the basis for the short-term 

rupee-denominated benchmarks for all 

pre-shipment financing. 

Further, in prior reviews, the 

Department determined that U.S. dollardenominated working capital demand 

loans (WCDL) are comparable to U.S. 

dollar-denominated pre-shipment 

export financing and post-shipment 

export financing, because these loans 

and WCDLs are used to finance both 

inventories and receivables. See PET 

Film Preliminary Results of 2003 

Review, 70 FR 46484, unchanged in PET 

Film Final Results of 2003 Review, at 

‘‘Benchmarks for Loans and Discount 

Rate.’’ There is no new information or 

evidence of changed circumstances 

which would warrant reconsidering this 

finding. 

SRF reported only one U.S. dollardenominated short-term loan during the 

POR. However, SRF did not obtain any 

WCDL during the POR. Therefore, in 

accordance with 19 CFR 

351.505(a)(3)(ii), the Department is 

using a national average dollardenominated short-term interest rate, as 

reported in the International Monetary 

Fund’s publication International 

Financial Statistics (IMF Statistics) for 

SRF. 

SRF received exemptions from import 

duties and central sales taxes (CST) on 

the importation of capital equipment 

under the Export Promotion Capital 

Goods Scheme (EPCGS) and the Special 

Economic Zones (SEZ) programs, which 

we have preliminarily determined to be 

non-recurring benefits in accordance 

with 19 CFR 351.524(c). 

Pursuant to 19 CFR 351.505(a)(2)(ii) 

the Department will not consider a loan 

provided by a government-owned 

special purpose bank to be a commercial 

loan for purposes of selecting a loan to 

compare with a government-provided 

loan. The Department has previously 

determined that the Industrial 

Development Bank of India (IDBI) is a 

government-owned special purpose 

bank. See PET Film Final Results 2003 

Review at Comment 3. Further, in PET 

Film Final Results of 2005 Review, at 

‘‘Benchmark Interest Rates and Discount 

Rates,’’ the Department determined that 

the Industrial Finance Corporation of 

India (IFCI) and the Export-Import Bank 

of India (EXIM) are government-owned 

special purpose banks. See Polyethylene 

Terephthalate Film, Sheet, and Strip 

from India: Final Results of 

Countervailing Duty Administrative 

Review, 73 FR 7708 (February 11, 2008), 

and accompanying Issues and Decision 

Memorandum (PET Film Final Results 

of 2005 Review). As such, the 

Department does not use loans from the 

IDBI, IFCI, or EXIM, if reported by 

respondents, as a basis for a commercial 

loan benchmark. 

In this review, SRF did not have 

comparable commercial long-term 

rupee-denominated loans for all 

required years; therefore, for those years 

for which we did not have companyspecific information, and where the 

relevant information was on the record, 

we relied on comparable long-term 

rupee-denominated benchmark interest 

rates from the immediately preceding 

year as directed by 19 CFR 

351.505(a)(2)(iii). When there were no 

comparable long-term, rupeedenominated loans from commercial 

banks during either the year under 

consideration or the preceding year, we 

used national average long-term interest 

rates, pursuant to 19 CFR 

351.505(a)(3)(ii), from the IMF Statistics. 

Finally, 19 CFR 351.524(d)(3) directs us 

regarding the selection of a discount rate 

for the purposes of allocating nonrecurring benefits over time. The 

regulations provide several options in 

order of preference. The first among 

these is the cost of long-term fixed-rate 

loans of the firm in question, excluding 

any loans which have been determined 

to be countervailable, for each year in 

which non-recurring subsidies have 

been received. 

Denominator 

When selecting an appropriate 

denominator for use in calculating the 

ad valorem subsidy rate, the Department 

considers the basis for respondent’s 

receipt of benefits under each program 

at issue. As discussed in further detail 

below, we preliminarily determine that 

the benefits received by SRF under all 

but one of the programs found 

countervailable, were tied to export 

performance. Therefore, for those 

programs, except as cited below for preand post shipment export financing, we 

use total export sales, including deemed 

exports, as the denominator for our 

calculations. See 19 CFR 351.525(b)(2). 

Because pre-shipment and postshipment export financing requires that 

the recipient demonstrate physical 

exports, we used total export sales net 

of deemed exports. Further, for the one 

program that was not tied to export 

performance, the State and Union 

Territory Sales Tax Exemption program, 

we have used SRF’s total sales of subject 

merchandise as the denominator in our 

calculations. 

A. Programs Preliminarily Determined 

To Be Countervailable 

1. Pre-Shipment and Post-Shipment 

Export Financing 

The Reserve Bank of India (RBI), 

through commercial banks, provides 

short-term pre-shipment financing, or 

‘‘packing credits,’’ to exporters. Upon 

presentation of a confirmed export order 

or letter of credit to a bank, companies 

may receive pre-shipment loans for 

working capital purposes (i.e., 

purchasing raw materials, warehousing, 

packing, transportation, etc.) for 

merchandise destined for exportation. 

Companies may also establish preshipment credit lines upon which they 

draw as needed. Limits on credit lines 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 81577 

4See Government of India Original Response of 

May 27, 2010 (QR–GOI), at 19. 

5See QR–SRF, at 65–66, and Exhibits 31(a)–(c). 

6See SRF’s First Supplemental Response of 

September 8, 2010 (SQR1–SRF), at 32–33 and 

Exhibits S1–23(a) and (b). 

7See SQR1–SRF, at Exhibit S1–23(a) and (b). 

are established by commercial banks 

and are based on a company’s 

creditworthiness and past export 

performance. Credit lines may be 

denominated either in Indian rupees or 

in a foreign currency. Commercial banks 

extending export credit to Indian 

companies must, by law, charge interest 

at rates determined by the RBI. 

Post-shipment export financing 

consists of loans in the form of 

discounted trade bills or advances by 

commercial banks. Exporters qualify for 

this program by presenting their export 

documents to the lending bank. The 

credit covers the period from the date of 

shipment of the goods to the date of 

realization of the proceeds from the sale 

to the overseas customer. Under the 

Foreign Exchange Management Act of 

1999, exporters are required to realize 

proceeds from their export sales within 

180 days of shipment. Post-shipment 

financing is, therefore, a working capital 

program used to finance export 

receivables. In general, post-shipment 

loans are granted for a period of not 

more than 180 days, and may be 

obtained in Indian rupees and in foreign 

currencies. In the original investigation, 

the Department determined that the preshipment and post-shipment export 

financing programs conferred 

countervailable subsidies on the subject 

merchandise because: (1) The provision 

of the export financing constitutes a 

financial contribution pursuant to 

section 771(5)(D)(i) of the Act as a direct 

transfer of funds in the form of loans; (2) 

the provision of the export financing 

confers benefits on the respondents 

under section 771(5)(E)(ii) of the Act to 

the extent that the interest rates 

provided under these programs are 

lower than comparable commercial loan 

interest rates; and (3) these programs are 

specific under section 771(5A)(B) of the 

Act because they are contingent upon 

export performance. See PET Film Final 

Determination at ‘‘Pre-Shipment and 

Post-Shipment Financing.’’ There is no 

new information or evidence of changed 

circumstances that would warrant 

reconsidering this finding. Therefore, 

for these preliminary results, we 

continue to find this program 

countervailable. 

SRF reported that it did not receive 

any post-shipment export financing 

during the POR. However, it did report 

receiving pre-shipment export financing 

during the POR. With regard to preshipment loans, the benefit conferred is 

the difference between the amount of 

interest the company paid on the 

government loan and the amount of 

interest it would have paid on a 

comparable commercial loan (i.e., the 

short-term benchmark). Because preshipment loans are tied to a company’s 

total exports rather than exports of 

subject merchandise, we calculated the 

subsidy rate for these loans by dividing 

the total benefit by the value of SRF’s 

total exports, net of deemed exports, 

during the POR. See 19 CFR 

351.525(b)(2). On this basis, we 

preliminarily determine the 

countervailable subsidy from preshipment export financing for SRF to be 

0.13 percent ad valorem. 

2. Advance License Program (ALP) 

Under the ALP, aka Advance 

Authorization scheme,4 exporters may 

import, duty free, specified quantities of 

materials required to manufacture 

products that are subsequently 

exported. The exporting companies, 

however, remain contingently liable for 

the unpaid duties until they have 

fulfilled their export requirement. The 

quantities of imported materials and 

exported finished products are linked 

through standard input-output norms 

(SIONs) established by the GOI. During 

the POR, SRF used advance licenses to 

import certain materials duty free. 

In the 2005 administrative review of 

this proceeding, the GOI indicated that 

it had revised its Foreign Trade Policy 

and Handbook of Procedures for the 

ALP during that POR. The Department 

analyzed the changes introduced by the 

GOI to the ALP in 2005 and 

acknowledged that certain 

improvements to the ALP system were 

made. However, the Department found 

that, based on the information 

submitted by the GOI and examined 

during previous reviews of this 

proceeding, systemic issues continued 

to exist in the ALP system during the 

POR. See PET Film Final Results of 

2005 Review, Issues and Decision 

Memorandum, at Comment 3; see also 

Notice of Final Affirmative 

Countervailing Duty Determination and 

Final Negative Critical Circumstances 

Determination: Certain Lined Paper 

Products from India, 71 FR 45034 

(August 8, 2006), and accompanying 

Issues and Decision Memorandum at 

Comment 1. In the 2005 review, the 

Department specifically stated that it 

continues to find the ALP 

countervailable because of the systemic 

deficiencies in the ALP identified in 

that review, including: 

The GOI’s lack of a system or procedure to 

confirm which inputs are consumed in the 

production of the exported products and in 

what amounts that is reasonable and effective 

for the purposes intended, as required under 

19 CFR 351.519. Specifically, we still have 

concerns with regard to several aspects of the 

ALP including (1) the GOI’s inability to 

provide the SION calculations that reflect the 

production experience of the PET film 

industry as a whole; (2) the lack of evidence 

regarding the implementation of penalties for 

companies not meeting the export 

requirements under the ALP or for claiming 

excessive credits; and, (3) the availability of 

ALP benefits for a broad category of 

‘‘deemed’’ exports. 

PET Film Final Results of 2005 Review, 

at Comment 3. 

Further, in that same review, the 

Department found that PET film 

producers ‘‘do not have to keep track of 

wastage since it is not recoverable for 

the production of PET film.’’ Id. 

Accordingly, no allowance was made by 

the GOI to account for waste to ensure 

that the amount of duty deferred would 

not exceed the amount of import 

charges on imported inputs consumed 

in the production of the exported 

subject merchandise. See id. 

Furthermore, the Department found 

that, in developing the SIONs for Pet 

film, the GOI did not tie the relevant 

production numbers to a producer’s 

accounting system or financial 

statement. Id. 

In this review, SRF pointed to the 

revisions addressed in the above 

referenced 2005 administrative review 

of the order, stating that the GOI 

introduced those measures in order to 

strengthen the supervision and 

monitoring of the ALP.5 Further, in 

response to the Department’s request, 

SRF submitted ‘‘a complete set of 

documents submitted to the’’ Directorate 

General of Foreign Trade (DGFT). The 

cited documents include copies of SRF’s 

application for redemption and its 

documentation received from the DGFT 

and Customs at the time of redemption.6

This information includes the 

application for redemption, which 

contains the import and export data 

from the ALP license, a back-up detail 

on imports and exports made by SRF, 

SRF’s Appendix 23 as submitted to the 

GOI, which lists the total quantity 

consumed for the exported product, and 

the total quantity authorized.7 All of 

SRF’s documents were certified by an 

accountant. The total values of the GOI 

redemption document reflect the import 

and export data SRF reported to the 

GOI. However, we note that the actual 

consumption and export data deviate 

from those specified in the original 

license. 


emcdonald on DSK2BSOYB1PROD with NOTICES
81578 Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 

8See QR–GOI, at 20 and Exhibit 1. 9 Id. 31. 10See Government of India (GOI) First 

Supplemental Response of August 10, 2010 (SQR1– 

GOI), at 18–19 and GOI Second Supplemental 

Response of September 22, 2010 (SQR2–GOI), at 13. 11See QR–GOI, at 37. 

12See SQR1–SRF, at Exhibit S1–23(a). 

13See Exhibits 30, QR–SRF, and S1–22(a), SQR1– 

SRF. 

The GOI submitted a ‘‘detailed note,’’ 

which, it states, contains the step-bystep procedures, including management, 

enforcement and maintenance, involved 

in the issuance of an ALP and in the 

discharge of its export obligation.8

Specifically, in this note, the GOI states 

that the holder of an advance license is 

required to produce the relevant Bank 

Certificate of export and realization, 

along with a copy of the shipping bill(s) 

containing the details of the shipment 

(physical exports) or a copy of the 

invoice duly signed by the unit 

receiving the material and their 

jurisdictional excise authorities 

(deemed exports) for redemption of the 

ALP. It further states that, before 

discharging the bank guarantee against 

the ALP, the Indian Customs verifies 

that the details of exports as given in the 

redemption certificate are in accordance 

with their records.9

The Department requested that the 

GOI submit a complete set of 

documentation with respect to SRF’s 

export obligation under the ALP, or any 

other company’s complete set of 

documentation, but in its response, the 

GOI deferred to the respondent.10 Thus, 

to date the Department has not received 

from the GOI a complete set of 

documents, which would include 

documents from each Indian 

Government entity involved in the 

processing of the redemption of an 

export obligation under the ALP. The 

GOI has not provided SRF’s relevant 

Bank Certificate(s) of export and 

realization, along with a copy of the 

shipping bill(s) containing the details of 

the shipment (physical exports) or a 

copy of the invoice duly signed by the 

unit receiving the material and their 

jurisdictional excise authorities 

(deemed exports) for redemption of the 

ALP. As such, the record does not 

include supporting documentation that 

demonstrates that Indian Customs 

verified that the details of exports as 

given in the redemption certificate are 

in accordance with the records 

maintained by Indian Customs with 

respect to imports and exports. Further, 

copies of those specific customs records 

have also not been submitted by the 

GOI. 

Thus, for the preliminary results, the 

Department was unable to examine the 

totality of documents involved in the 

processing of an Application for 

Redemption of Advance License, as 

examined by the DGFT and the Indian 

customs, to assess the monitoring 

procedures in place. The Department 

was unable to determine whether 

Appendix 23 is indeed effective in 

tracing the consumption of the 

quantities of inputs imported duty free 

to the quantities of subject merchandise 

exported, in accordance with the 2005 

SION for PET film. Therefore, there is 

insufficient record evidence 

demonstrating the functionality and 

accuracy of the GOI’s monitoring 

procedures to ensure that the inputs 

imported duty free were consumed in 

the production of subject merchandise 

exported, in accordance with the newly 

established PET film SION. Moreover, 

contrary to the GOI’s claim that the 

present ALP scheme permits for 

monitoring which inputs listed in the 

SION are actually consumed in the 

production of the exported product, the 

GOI did not address the concerns the 

Department had in the 2005 review with 

respect to the formulation and 

verification of the PET film SION. In 

particular, the Department verified in 

PET Film Final Results 2005 Review that 

the GOI did not require the producer to 

tie the inventory and consumption data 

to the producer’s accounting systems 

and financial statements in order to 

verify the accuracy of the producer’s 

data, or to account for waste normally 

incurred in the production. See PET 

Film Final Results 2005 Review, Issues 

and Decision Memorandum, at 

Comment 3. In fact, the GOI states in its 

response that it considers ‘‘that the 

system need not provide for 

determination of ‘what amounts of 

inputs have actually been consumed’ 

and whether an excess has been allowed 

in a particular situation and in a given 

case, as an exporter is required to 

provide on annual basis a copy of the 

consumption register Appendix 23, duly 

certified by a Chartered Accountant.’’ 11

Further, the Department determined 

in the 2005 review that the GOI, in its 

revisions to the ALP, did not address 

the Department’s concerns that it has no 

specific procedure in place to monitor 

that these finished products are 

ultimately exported. Specifically, the 

Department determined that Appendix 

23 does not differentiate and identify 

sales as being either physical exports, 

deemed exports, or sales to intermediate 

suppliers, nor does it segregate imported 

inputs from domestically procured ones, 

nor does it differentiate the exported 

product produced from these inputs by 

separately identifying physical exports 

from deemed exports. In this new 

shipper review, neither the GOI nor SRF 

claimed that the laws and procedures 

underlying the ALP had changed with 

respect to ‘‘deemed exports.’’ The 

Appendix 23 submitted by SRF does not 

indicate any changes to the Appendix 

23 examined in the 2005 review, and 

thus still does not address the 

Department’s concern regarding deemed 

exports.12 Thus, with respect to physical 

exports versus deemed exports, the GOI 

still did not demonstrate that it has a 

reliable monitoring system in place to 

determine which inputs, and in which 

amounts, are consumed in the 

production of the exported product. See 

19 CFR 351.519(a)(4). 

Because there is no evidence on the 

record demonstrating that the systemic 

deficiencies in the ALP system 

identified above have been resolved, the 

Department continues to find that the 

ALP confers a countervailable subsidy 

because: (1) A financial contribution, as 

defined under section 771(5)(D)(ii) of 

the Act, is provided under the program, 

as the GOI exempts the respondents 

from the payment of import duties that 

would otherwise be due; (2) the GOI 

does not have in place and does not 

apply a system that is reasonable and 

effective for the purposes intended in 

accordance with 19 CFR 351.519(a)(4), 

to confirm which inputs, and in what 

amounts, are consumed in the 

production of the exported products, 

making normal allowance for waste nor 

did the GOI carry out an examination of 

actual inputs involved to confirm which 

inputs are consumed in the production 

of the exported product, and in what 

amounts; thus, the entire amount of the 

import duty deferral or exemption 

provided to the respondent constitutes a 

benefit under section 771(5)(E) of the 

Act; and, (3) this program is specific 

under section 771(5A)(A) and (B) of the 

Act because it is contingent upon 

exportation. 

Pursuant to 19 CFR 351.524(c)(1), the 

exemption of import duties on raw 

material inputs normally provides a 

recurring benefit. Under this program, 

during the POR, SRF did not have to 

pay certain import duties for inputs that 

were used in the production of subject 

merchandise. Thus, we are treating the 

benefit provided under the ALP as a 

recurring benefit. 

SRF received various ALP licenses, 

which it reported separately for the 

production of subject merchandise and 

non-subject merchandise.13 However, 

because the original license(s) identify 

Polyester Film only, it cannot be 

established whether the licenses were 

issued for subject merchandise only, or 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 81579 

14See e.g., Polyethylene Terephthalate Film, 

Sheet, and Strip (PET Film) From India: Final 

Results of Countervailing Duty Administrative 

Review, 75 FR 6634, (February 10, 2010) and 

accompanying Issues and Decision Memorandum at 

Comment 9. 

15See Exhibits 16 and 18(a), QR–SRF. 

for both subject- and non-subject 

merchandise, e.g., metalized film. 

Therefore, we were not able to 

determine whether the licenses were in 

fact tied to the production of a 

particular product within the meaning 

of 19 CFR 351.525(b)(5). Accordingly, 

we find that SRF’s ALP licenses benefit 

all of the company’s exports. 

To calculate the subsidy, we first 

determined the total value of import 

duties exempted during the POR for 

SRF. From this amount, we subtracted 

the required application fees paid for 

each license during the POR as an 

allowable offset in accordance with 

section 771(6) of the Act. We then 

divided the resulting benefit by the total 

value of export sales. On this basis, we 

determine the countervailable subsidy 

provided under the ALP to be 0.59 

percent ad valorem. 

3. Export Promotion Capital Goods 

Scheme (EPCGS) 

The EPCGS provides for a reduction 

or exemption of customs duties and 

excise taxes on imports of capital goods 

used in the production of exported 

products. Under this program, 

producers pay reduced duty rates on 

imported capital equipment by 

committing to earn convertible foreign 

currency equal to four to five times the 

value of the capital goods within a 

period of eight years. Once a company 

has met its export obligation, the GOI 

will formally waive the duties on the 

imported goods. If a company fails to 

meet the export obligation, the company 

is subject to payment of all or part of the 

duty reduction, depending on the extent 

of the shortfall in foreign currency 

earnings, plus an interest penalty. 

In the investigation, the Department 

determined that import duty reductions 

or exemptions provided under the 

EPCGS are countervailable export 

subsidies because the scheme: (1) 

Provides a financial contribution 

pursuant to section 771(5)(D); (2) 

provides two different benefits under 

section 771(5)(E) of the Act; and (3) is 

specific pursuant to section 771(5A) (A) 

and (B) of the Act because the program 

is contingent upon export performance. 

See, e.g., PET Film Final Determination 

at ‘‘EPCGS.’’ Because there is no new 

information or evidence of changed 

circumstances that would warrant 

reconsidering our determination that 

this program is countervailable, we 

continue to find that this program is 

countervailable for these preliminary 

results. 

Since the unpaid duties are a liability 

contingent on subsequent events, under 

the EPCGS, the exempted import duties 

would have to be paid to the GOI if 

accompanying export obligations are not 

met. It is the Department’s practice to 

treat any balance on an unpaid liability 

that may be waived in the future, as a 

contingent liability interest-free loan 

pursuant to 19 CFR 351.505(d)(1). See 

PET Film Final Determination at 

‘‘EPCGS.’’ These contingent-liability 

loans constitute the first benefit under 

the EPCGS. The second benefit is the 

waiver of duty on imports of capital 

equipment covered by those EPCGS 

licenses for which the export 

requirement has already been met. For 

those licenses, for which companies 

demonstrate that they have completed 

their export obligation, we treat the 

import duty savings as grants received 

in the year in which the GOI waived the 

contingent liability on the import duty 

exemption pursuant to 19 CFR 

351.505(d)(2). 

Import duty exemptions under this 

program are provided for the purchase 

of capital equipment. The preamble to 

our regulations states that, if a 

government provides an import duty 

exemption tied to major equipment 

purchases, ‘‘it may be reasonable to 

conclude that, because these duty 

exemptions are tied to capital assets, the 

benefits from such duty exemptions 

should be considered non-recurring 

***’’ See Countervailing Duties; Final 

Rule, 63 FR 65348, 65393 (November 

25, 1998). In accordance with 19 CFR 

351.524(c)(2)(iii) and past practice, we 

are treating these import duty 

exemptions on capital equipment as 

non-recurring benefits.14

SRF reported that it imported capital 

goods under the EPCGS in the years 

prior to the POR. SRF received various 

EPCGS licenses, which it reported were 

for the production of subject 

merchandise and non-subject 

merchandise. Information provided by 

SRF indicates that some of the licenses 

were issued for the purchase of capital 

goods and materials to be used in the 

production of both subject and nonsubject merchandise.15 Based on the 

information and documentation 

submitted by SRF, we cannot determine 

that the EPCGS licenses are tied to the 

production of a particular product 

within the meaning of 19 CFR 

§ 351.525(b)(5). As such, we find that all 

of SRF’s EPCGS licenses benefit all of 

the company’s exports. 

SRF met the export requirements for 

certain EPCGS licenses prior to 

December 31, 2009, and the GOI has 

formally waived the relevant import 

duties. For most of its licenses, 

however, SRF has not yet met its export 

obligation as required under the 

program. Therefore, although SRF has 

received a deferral from paying import 

duties when the capital goods were 

imported, the final waiver on the 

obligation to pay the duties has not yet 

been granted for many of these imports. 

To calculate the benefit received from 

the GOI’s formal waiver of import duties 

on SRF’s capital equipment imports 

where its export obligation was met 

prior to December 31, 2009, we 

considered the total amount of duties 

waived, i.e., the calculated duties 

payable less the duties actually paid in 

the year, net of required application 

fees, in accordance with section 771(6) 

of the Act, to be the benefit and treated 

these amounts as grants pursuant to 19 

CFR 351.504. Further, consistent with 

the approach followed in the 

investigation, we determine the year of 

receipt of the benefit to be the year in 

which the GOI formally waived SRF’s 

outstanding import duties. See PET Film 

Final Determination at Comment 5. 

Next, we performed the ‘‘0.5 percent 

test,’’ as prescribed under 19 CFR 

351.524(b)(2), for each year in which the 

GOI granted SRF an import duty waiver. 

Those waivers with values in excess of 

0.5 percent of SRF’s total export sales in 

the year in which the waivers were 

granted were allocated using the 

allocation period for non-recurring 

subsidies to be the AUL prescribed by 

the Internal Revenue Service (IRS) for 

renewable physical assets for the 

industry under consideration (as listed 

in the IRS’s 1977 Class Life Asset 

Depreciation Range System, and as 

updated by the Department of the 

Treasury), in accordance with 19 CFR 

351.524(d)(2)(i), while waivers with 

values less than 0.5 percent of SRF’s 

total export sales were expensed in the 

year of receipt. See ‘‘Allocation Period’’ 

section, above. 

As noted above, import duty 

reductions or exemptions that SRF 

received on the imports of capital 

equipment for which they have not yet 

met export obligations may have to be 

repaid to the GOI if the obligations 

under the licenses are not met. 

Consistent with our practice and prior 

determinations, we will treat the unpaid 

import duty liability as an interest-free 

loan. See 19 CFR § 351.505(d)(1); and 

PET Film Final Determination and 

Issues and Decision Memorandum, at 

‘‘EPCGS’’; see also Final Affirmative 

Countervailing Duty Determination: 

Bottle-Grade Polyethylene 

Terephthalate (PET) Resin From India, 


emcdonald on DSK2BSOYB1PROD with NOTICES
81580 Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 

16See SQR1–GOI, at 11–12. 

17The Central Government of India may appoint 

any of its officers of a certain rank to the position 

of Development Commissioner of one or more SEZs. 

18See SQR1–SRF, at Revised Exhibit 9(a)(I). 

19See QR–SRF, at Exhibits 19(a) and (b), and 

SQR1–SRF, at 26–27. 

20See QR–GOI, at 15 and SQR1–GOI, at 12. 

21The Department previously determined central 

excise duty exemptions to be not countervailable. 

See Final Affirmative Countervailing Duty 

Determination: Bottle-Grade Polyethylene 

Terephthalate (PET) Resin From India, 70 FR 13460 

(March 21, 2005), and accompanying Issues and 

Decision Memorandum at ‘‘Export Oriented Units 

(EOUs) Programs: Purchase of Material and other 

Inputs Free of Central Excise Duty.’’ 

22See QR–GOI, at 16 and QR–SRF, at 50–51. 23See SQR1–SRF, at Exhibits S1–20(a)–20(c). 

70 FR 13460 (March 21, 2005) (Indian 

PET Resin Final Determination), and 

accompanying Issues and Decision 

Memorandum at ‘‘Export Promotion 

Capital Goods Scheme (EPCGS).’’ 

The amount of the unpaid duty 

liabilities to be treated as an interest-free 

loan is the amount of the import duty 

reduction or exemption for which the 

respondent applied, but, as of the end 

of the POR, had not been finally waived 

by the GOI. Accordingly, we find the 

benefit to be the interest that SRF would 

have paid during the POR had it 

borrowed the full amount of the duty 

reduction or exemption at the time of 

importation. See, e.g., PET Film 

Preliminary Results of 2003 Review, 70 

FR 46483, 46488 (August 10, 2005) 

(unchanged in the final results, 71 FR 

7534). 

As stated above, under the EPCGS 

program, the time period for fulfilling 

the export requirement expires eight 

years after importation of the capital 

good. As such, pursuant to 19 CFR 

351.505(d)(1), the benchmark for 

measuring the benefit is a long-term 

interest rate because the event upon 

which repayment of the duties depends 

(i.e., the date of expiration of the time 

period to fulfill the export commitment) 

occurs at a point in time that is more 

than one year after the date of 

importation of the capital goods (i.e., 

under the EPCGS program, the time 

period for fulfilling the export 

commitment is more than one year after 

importation of the capital good). As the 

benchmark interest rate, we used the 

weighted-average interest rate from all 

comparable commercial long-term, 

rupee-denominated loans for the year in 

which the capital good was imported. 

See ‘‘Benchmarks for Loans and 

Discount Rate’’ section above for a 

discussion of the applicable benchmark. 

We then multiplied the total amount of 

unpaid duties under each license by the 

long-term benchmark interest rate for 

the year in which the license was 

approved and summed these amounts to 

determine the total benefit for each 

company. 

The benefit received under the EPCGS 

is the sum of: (1) The benefit 

attributable to the POR from the 

formally waived duties for imports of 

capital equipment for which 

respondents met export requirements by 

December 31, 2009, and (2) interest due 

on the contingent liability loans for 

imports of capital equipment that have 

not met export requirements. We then 

divided the total benefit received by 

SRF under the EPCGS program by SRF’s 

total exports to determine a 

countervailable subsidy of 0.04 percent 

ad valorem. 

4. Special Economic Zones (SEZs) 

Formerly Known as Export Process 

Zones/Export Oriented Units (EPZs/ 

EOUs) 

In the original questionnaire, we 

asked the GOI and SRF whether SRF 

had received benefits under the EPZs/ 

EOUs program. This program was found 

not to have been used in the original 

investigation. See PET Film Final 

Determination at ‘‘Programs Determined 

to be Not Used,’’ and aspects of EOUs 

were subsequently found 

countervailable in Indian PET Resin 

Final Determination. See Indian PET 

Resin Final Determination, at e. to g. In 

its questionnaire response the GOI 

stated that this program had been 

converted into a different program, the 

SEZ program. In response to the 

Department’s request to explain and 

describe in detail the conversion of the 

program into a different program, the 

GOI responded that the conversion of 

the EPZs/EOUs to the SEZ program was 

via the Special Economic Zones Act, 

2005, effective February 2006 (SEZ Act). 

The GOI stated that this was not really 

a new program but only a renaming of 

the EPZs/EOUs.16 This new shipper 

review is the first review under this 

order where this program was reported 

to be used by a respondent. In response 

to the Department’s questionnaire 

requesting information on EPZs and 

EOUs, SRF reported that it first received 

approval to set up an SEZ from the 

Development Commissioner 17 in 

August 2003 and commenced 

production in October 2004.18

Subsequently, SRF expanded its SEZ 

unit twice, once in 2007 and then again 

in 2009.19

In response to the Department’s 

original questionnaire, and specifically 

concerning EPZs and EOUs, the GOI 

stated that the nature of an SEZ is to 

provide a long-term and stable policy 

framework with a minimum of 

regulatory regime and to provide an 

expeditious and single window 

clearance mechanism for all eligible to 

apply for an SEZ. An SEZ may be 

established jointly or individually by 

the Central Government, the State 

Government or a person, i.e., companies 

like SRF, to manufacture goods or 

provide services, or both, as well as to 

serve as a Free Trade and Warehousing 

Zone.20 Companies/persons or 

Governments that want to set-up an SEZ 

in an identified area, can submit their 

proposal to the relevant State 

Government. To be eligible under the 

SEZ Act, the companies inside an SEZ 

must commit to export their production 

of goods and/or services. Specifically, 

all products produced, excluding rejects 

and certain domestic sales, must be 

exported and must achieve a net foreign 

exchange (NFE), calculated 

cumulatively for a period of five years 

from the commencement of production. 

In return, the companies inside the SEZ 

are eligible to receive various forms of 

assistance. 

Companies in a designated SEZ may 

receive the following benefits: (1) Dutyfree importation of capital goods and 

raw materials, components, 

consumables, intermediates, spare parts 

and packing material; (2) purchase of 

capital goods and raw materials, 

components, consumables, 

intermediates, spare parts and packing 

material without the payment of central 

sales tax (CST) thereon; (3) exemption 

from the services tax for the services 

consumed within the SEZ; 21 (4) 

exemption from stamp duty of all 

transactions and transfers of immovable 

property, or documents related thereto 

within the SEZ; (5) exemption from 

electricity duty and cess thereon on the 

sale or supply to the SEZ unit; (6) 

income tax exemptions under the 

Income Tax Exemption Scheme Section 

10A; 22 and (7) discounted land in an 

SEZ.23

In this new shipper review, SRF 

reported that it produced subject and 

non-subject merchandise in an SEZ unit 

located in Indore during the POR. 

Specifically, SRF reported using the 

SEZ program to obtain: (1) Duty-free 

importation of capital goods and raw 

materials, components, consumables, 

intermediates, spare parts and packing 

material; (2) purchase of capital goods 

and raw materials, components, 

consumables, intermediates, spare parts 

and packing material without the 

payment of central sales tax (CST) 

thereon; (3) exemption from stamp duty 

of all transactions and transfers of 

immovable property, or documents 

related thereto within the SEZ; (4) 

exemption from electricity duty and 

cess thereon on the sale or supply to the 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 81581 

24See QR–SRF, at 58 and Exhibit 21(a); see also 

id. Exhibit 20(c). 

SEZ unit; (5) income tax exemptions 

under Income Tax Exemption Scheme 

Section 10A; and (6) discounted land in 

an SEZ. 

Since eligibility for the SEZ program 

is contingent upon export performance, 

we find that the assistance provided 

under the SEZ program is specific 

within the meaning of sections 

771(5A)(A) and (B) of the Act. 

a. Duty-Free Importation of Capital 

Goods and Raw Materials, Components, 

Consumables, Intermediates, Spare Parts 

and Packing Material 

Companies in SEZs are entitled to 

import capital goods and raw materials, 

components, consumables, 

intermediates, spare parts and packing 

material duty-free in exchange for 

committing to export all of the products 

it produces, excluding rejects and 

certain domestic sales. Additionally, 

such companies have to achieve an NFE 

calculated cumulatively for a period of 

five years from the commencement of 

production. 

We preliminarily determine that the 

duty-free importation of capital goods 

and raw materials, components, 

consumables, intermediates, spare parts 

and packing material provide a financial 

contribution pursuant to section 

771(5)(D)(ii) of the Act through the 

foregoing of duty payments. This SEZ 

program confers benefits in the amounts 

of exemptions of customs duties not 

collected in accordance with section 

771(5)(E) of the Act. 

With regard to these import duty 

exemptions provided on goods, such as 

raw materials, that may be consumed in 

the production of the exported product, 

the GOI did not provide any information 

to demonstrate that such exemptions 

meet the criteria for noncountervailability set forth in 19 CFR 

351.519(a)(4). Absent such information, 

the Department finds that all of the 

import duty exemptions provided under 

this category of the SEZ program are 

countervailable. Based on the 

information provided by SRF in the 

form of copies of its ‘‘Executed Legal 

agreement for SEZ Unit’’ with the GOI, 

until an SEZ demonstrates that it has 

fully met its export requirement, the 

company remains contingently liable for 

the import duties.24 SRF has not yet met 

its export requirement under this 

program and will owe the unpaid duties 

if the export requirement is not met. 

Therefore, consistent with 19 CFR 

351.505(d)(1), until the contingent 

liability for the unpaid duties is 

officially waived by the GOI, we 

consider the unpaid duties to be an 

interest-free loan made to SRF at the 

time of importation. We determine the 

benefit to be the interest that SRF would 

have paid during the POR had it 

borrowed the full amount of the duty 

reduction or exemption at the time of 

importation. 

Pursuant to 19 CFR 351.505(d)(1), the 

benchmark for measuring the benefit is 

a long-term interest rate because the 

event upon which repayment of the 

duties depends (i.e., the date of 

expiration of the time period to fulfill 

the export commitment) occurs at a 

point in time that is more than one year 

after the date of importation of the 

capital goods (i.e., under the SEZ 

program, the time period for fulfilling 

the export commitment is more than 

one year after importation of the capital 

good). We used the long-term, rupeedenominated benchmark interest rate 

discussed in the ‘‘Benchmarks for 

Interest Rates and Discount Rates’’ 

section above for each year in which 

capital goods were imported as the 

benchmark. 

We calculated the benefit from these 

exemptions by multiplying the value of 

the item imported by the applicable 

duty rates for customs duty and cess, 

and multiplied these amounts by the 

appropriate interest rate. We then 

summed the results, and divided that 

total by SRF’s exports to determine the 

countervailable subsidy of 0.44 percent 

ad valorem. 

b. Exemption From Payment of Central 

Sales Tax (CST) on Purchases of Capital 

Goods and Raw Materials, Components, 

Consumables, Intermediates, Spare Parts 

and Packing Material 

Under this program, SRF did not have 

to pay CST on raw materials, capital 

goods and other goods, such as 

packaging materials procured 

domestically. We preliminarily 

determine that the exemption from 

payment of CST on purchases of capital 

goods and raw materials, components, 

consumables, intermediates, spare parts 

and packing material provides a 

financial contribution pursuant to 

section 771(5)(D)(ii) of the Act through 

the foregoing of CST payments. This 

SEZ program confers benefits in the 

amount of exemptions of CST not 

collected, in accordance with section 

771(5)(E) of the Act. Specifically, the 

benefit associated with domestically 

purchased materials is the amount of 

CST due and uncollected on those 

purchases by SRF during the POR. 

Normally, uncollected indirect taxes, 

such as the CST, are considered to be 

recurring benefits. However, a portion of 

the benefit of this program is tied to the 

purchase of capital goods. As such, 

pursuant to 19 CFR 351.524(c)(2)(iii), 

we would normally treat such 

uncollected taxes due on purchases of 

capital goods as non-recurring benefits. 

However, we performed the ‘‘0.5 percent 

test,’’ as prescribed under 19 CFR 

351.524(b)(2) and found that the amount 

of uncollected CST that was tied to the 

purchase of capital goods during the 

POR was less than 0.5 percent of total 

export sales during the POR. We also 

performed the ‘‘0.5 percent test on SRF’s 

uncollected CST on its purchases of 

capital goods in 2008, 2007, 2006, 2005 

and 2004, and found that each year’s 

uncollected CST was less than 0.5 

percent of total export sales for each 

year. Therefore, each annual benefit for 

2004–2008 was expensed in the year 

earned and the only benefit attributable 

to the POR was the amount of the 

uncollected CST on purchases of capital 

goods under this program during the 

POR. See 19 CFR 351.524(b)(2). 

With regard to the CST exemptions on 

goods, such as raw materials, that may 

be consumed in the production of the 

exported product, the GOI did not 

provide any information to demonstrate 

that such exemptions meet the criteria 

for non-countervailability set forth in 19 

CFR 351.518. Absent such information, 

the Department finds that all of the CST 

exemptions provided under this 

category of the SEZ program are 

countervailable. Therefore, we are 

treating all other CST exemptions on all 

purchases (other than capital goods) as 

recurring benefits pursuant to 19 CFR 

351.524. 

To calculate the benefit, we summed 

the total value of uncollected CST for 

capital goods purchased during the POR 

and the total value of uncollected CST 

due on all other purchases during the 

POR. We then divided this amount by 

the total value of SRF’s export sales 

during the POR. On this basis, we 

preliminarily determine the 

countervailable subsidy provided to 

SRF through the CST exemptions under 

the SEZ program to be 0.53 percent ad 

valorem. 

c. Exemption From Stamp Duty of all 

Transactions and Transfers of 

Immovable Property, or Documents 

Related Thereto Within the SEZ 

According to SRF, ‘‘{t}he Indian 

Stamp Act, 1899, is a Central enactment 

and States have powers to adopt the 

Indian Stamp Act, 1899, with 

amendments to the same to suit the 

transactions peculiar to each State,’’ and 

that the state of Madhya Pradesh has 

made amendments and imposed various 

types of Stamp duty. These amendments 

include the Stamp Duty, Surcharge on 


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81582 Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 

25See QR–SRF, at p. 57 and Exhibit 26(b) and 

SQR1–SRF, at 29–30. 

26See SQR1–GOI, at p. 16 and Exhibit 6. 

27See QR–SRF, at p. 58 and Exhibits 27(a) and 

(b). 

28See SQR1–GOI, at 16 and Exhibit S1–7. 

29See QR–SRF, at Exhibit 33(a). 

30See SQR1–GOI, at Exhibit S1–7. 

31See QR–SRF, at p. 77. 

32See QR–GOI, at 26. 

33See QR–SRF, at 50. 

34See SQR1–SRF, at 25. 

35See id. at 25 and Exhibits S1–20(a), (b)(English 

translation of the Madhya Pradesh Directive in 

Supplement to SQR1–SRF of September 8, 2010, 

and (c). 

36See Exhibit S1–20(a), at 3 and Exhibit S1–20(c). 

Stamp Duty (under Madhya Pradesh 

Upkar Adhiniyam), Gram Panchyat 

Taxes (under Madhya Pradesh 

Panchayat Raj Adhiniyam, 1993), and 

Municipalities tax (under Madhya 

Pradesh Municipalities Act, 1961). 

Further, SRF states that under Section 

13(2) of The Indore Special Economic 

Zone (Special Provisions) Act, 2003, the 

transfers of immoveable property or 

documents related thereto within the 

SEZ shall be exempt from stamp duty, 

and that SRF has been exempted from 

payment of stamp duty on its land lease 

deed.25

In response to the Department’s 

request to explain how the GOI 

monitors the exemption from stamp 

duty, the GOI responded that the 

monitoring criterion is that the 

documents on which stamp duty is 

being exempted should relate to the 

transfer of immovable property within 

the SEZ. In addition, the GOI provided 

an exhibit containing the applicable 

rates of stamp duty.26

For these preliminary results, we 

determine that the program provides a 

financial contribution in the form of 

revenue foregone by the State 

Government of Madhya Pradesh 

pursuant to section 771(5)(D)(ii) of the 

Act, and confers a benefit equal to the 

amount of the tax exemption, pursuant 

to section 771(5)(E) of the Act. We also 

determine that the SEZ exemption from 

stamp duty/taxes provides a recurring 

benefit under 19 CFR 351.524(c). 

To calculate the benefit, we first 

calculated the value of the uncollected 

stamp duties and taxes, as listed above, 

which SRF did not pay during the POR, 

by multiplying the value of the 

immovable property based on the tax 

rates provided. We then divided this 

amount by SRF’s total export sales 

during the POR to calculate a 

countervailable subsidy of 0.01 percent 

ad valorem. 

d. Exemption From Electricity Duty and 

Cess Thereon on the Sale or Supply to 

the SEZ Unit 

SRF reports that under Section 11(4) 

of The Indore Special Economic Zone 

(Special Provisions) Act, 2003, the 

supply of electricity to an SEZ is exempt 

from electricity duty and cess.27 In 

response to the Department’s request to 

explain its monitoring procedure, the 

GOI cited to Section 11(4) of The Indore 

Special Economic Zone (Special 

Provisions) Act, 2003, stating that the 

unit to which electricity duty is 

exempted should be located within the 

Special Economic Zone as approved by 

the GOI. In addition, the GOI provided 

an exhibit including the Madhya 

Pradesh Electricity Duty (Amendment) 

Act, 1995 and the Madhya Pradesh 

Ordinance No. 18 of 200, i.e., the State’s 

laws governing the taxation of 

electricity.28

For these preliminary results, we 

determine that the electricity duty and 

cess exemptions provide a financial 

contribution in the form of revenue 

foregone by the State Government of 

Madhya Pradesh pursuant to section 

771(5)(D)(ii) of the Act, and confers a 

benefit equal to the amount of the tax 

exemption, pursuant to section 

771(5)(E) of the Act. We also determine 

that the SEZ exemption from electricity 

duty and cess provides a recurring 

benefit under 19 CFR 351.524(c). 

To calculate the benefit, we first 

calculated uncollected electricity duty 

and cess which SRF did not pay during 

the POR, by multiplying the monthly 

billed amount of electricity consumed 

by the tax rates provided. We then 

divided this amount by SRF’s total 

export sales during the POR to calculate 

a countervailable subsidy of 0.18 

percent ad valorem. 

e. SEZ Income Tax Exemption Scheme 

(Section 10A) 

SRF reported that, in accordance with 

Section 10A of the Indian Income Tax 

Act, 1961, it was allowed to deduct its 

profits derived from the export sales as 

an SEZ, as defined in the Foreign Trade 

Policy (FTP), from its taxable income 

during the POR. Specifically, Section 

10A states that: 

Subject to the provisions of this section, a 

deduction of such profits and gains as are 

derived by an undertaking from the export of 

articles or things or computer software for a 

period of ten consecutive assessment years 

beginning with the assessment year relevant 

to the previous year in which the 

undertaking begins to manufacture or 

produce such articles or things or computer 

software, as the case may be, shall be allowed 

from the total income of the assessee.29

In its first supplemental response, the 

GOI also provided a copy of the ‘‘Special 

provision in respect of newly 

established undertakings in free trade 

zones, etc.; 10A.’’ 30

According to SRF, a company located 

in an SEZ does not have to file a formal 

application to make this deduction 

under the program, and the plant started 

production on or after April 2001.31

According to the GOI, ‘‘no deduction 

under this section shall be allowed to 

any undertaking for the assessment year 

beginning on the 1st day of April, 2011 

and subsequent years.’’ 32

Based on the information above, we 

preliminarily determine that, pursuant 

to section 771(5)(D)(ii) of the Act, the 

GOI provides a financial contribution in 

the form of revenue forgone. The benefit 

equals the difference between the 

amount of income taxes that would be 

payable absent this program and the 

actual amount of taxes payable by SRF, 

pursuant to section 771(5)(E) of the Act. 

To determine the benefit, we calculated 

the amount of income tax SRF would 

have had to pay on the income tax 

return filed in the POR less the amount 

SRF actually paid during the POR. See 

19 CFR 351.509(c). We then divided this 

benefit by SRF’s total export sales 

during the POR, to determine a 

countervailable subsidy of 1.29 percent 

ad valorem. 

f. Discounted Land Fees in an SEZ 

The Indore SEZ where SRF has its 

plant is located in the State of Madhya 

Pradesh and as such, the relevant State 

SEZ Act of Madhya Pradesh State, i.e., 

the Indore Special Economic Zone 

(Special Provisions) Act, 2003, 

applies,33 and the State Government of 

Madhya Pradesh is in control of SRF’s 

land lease agreement within the SEZ. 

SRF reported that, because its SEZ unit 

is a Mega Project by virtue of its large 

investment, totaling more than 25 crores 

(250,000,000 rupees), the State 

Government of Madhya Pradesh has 

allowed a concession of 75 percent of 

the lease premium on the land.34 This 

is confirmed by the directive of the 

Government of Madhya Pradesh, 

Department of Commerce, Industry and 

Employment Ministry, submitted by 

SRF.35 Information placed on the record 

by SRF confirms that SRF obtained a 

discount of 75 percent on the annual all 

inclusive lease premium.36

Based on the information above, we 

preliminarily determine that, pursuant 

to section 771(5)(D)(ii) of the Act, the 

State Government of the State of 

Madhya Pradesh provides a financial 

contribution in the form of revenue 

forgone. The benefit equals the 

difference between the actual land 

premium that would be payable absent 

this program and the actual amount 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 81583 

37See SQR1–SRF, at Exhibit S1–20(c). 

38See QR–GOI, at 24 and SQR1–GOI, at 25 and 

26. 

39See QR–SRF, at 69 and Exibit 32. 

40 id. See QR–SRF, at 71–72. 

paid by SRF, net of advances, i.e.,down 

payments on the lease made by SRF, 

pursuant to section 771(5)(E) of the Act. 

We also determine that the discount of 

the land premium in an SEZ scheme 

provides a recurring benefit under 19 

CFR 351.524(c), because the premium is 

paid annually. We took the discount on 

the lease, as reported by SRF to be the 

benefit and divided this benefit by 

SRF’s total export sales during the POR, 

to determine a countervailable subsidy 

of 0.35 percent ad valorem.37

5. Union Territories Sales Tax 

Exemption 

This program allows sellers located in 

a Union Territory not to collect CST on 

their sales outside the Union Territory. 

In the 2005 administrative review the 

Department determined this program to 

be countervailable. The Department 

found that this program provides a 

financial contribution in the form of 

revenue foregone by the respective State 

governments pursuant to section 

771(5)(D)(ii) of the Act, and confer a 

benefit equal to the amount of the tax 

exemption, pursuant to section 

771(5)(E) of the Act. Pursuant to section 

771(5A)(A) and (D)(iv) of the Act, these 

programs are specific because they are 

limited to certain geographical regions 

within the respective States or 

territories administering the programs. 

See Polyethylene Terephthalate Film 

Sheet, and Strip from India: Final 

Results of Countervailing Duty 

Administrative Review, 73 FR 7708 

(February 11, 2008), and accompanying 

Issues and Decision Memorandum at 

‘‘Union Territories Central Sales Tax 

(CST) Program.’’ 

In this new shipper review, the GOI 

reported that SRF did not participate in 

either of these programs, and stated that 

it obtained such information from 

SRF.38 SRF reported that it did not 

receive any benefits under the Union 

Territory CST program or the State Sales 

Tax Incentive Schemes. However, SRF 

did report purchases for which the 

supplier did not collect sales taxes.39

SRF states that it was not charged sales 

tax ‘‘because of a sales tax exemption 

applied for and availed of by the seller,’’ 

and that SRF is not ‘‘required to keep 

track of the program under which the 

seller has not charged sales tax, 

***’’ 40 We preliminarily determine 

that the uncollected CST on SRF’s 

purchases provides a recurring benefit 

under 19 CFR 351.510(c) and 19 CFR 

351.524(c). 

To calculate the benefit, we first 

calculated the total CST exemption SRF 

received during the POR by multiplying 

the purchase value by the applicable tax 

rate to determine the amount that would 

have been paid on SRF’s purchases 

during the POR absent this program. We 

then divided this amount by SRF’s total 

sales during the POR to calculate a 

countervailable subsidy of 0.01 percent 

ad valorem. 

B. Programs Preliminarily Determined 

To Be Not Used 

We preliminarily determine that SRF 

did not apply for or receive benefits 

during the POR under the programs 

listed below: 

GOI Programs 

1. Duty Free Replenishment 

Certificate (DFRC) (GOI). 

2. Target Plus Scheme (GOI). 

3. Capital Subsidy (GOI). 

4. Exemption of Export Credit From 

Interest Taxes (GOI). 

5. Loan Guarantees From the GOI. 

6. Duty Entitlement Passbook Scheme 

(DEPS/DEPB). 

State Programs 

7. State Sales Tax Incentive Schemes. 

8. Octroi Refund Scheme State of 

Maharashtra (SOM). 

9. Waiving of Interest on Loans by 

SICOM Limited (SOM). 

10. State of Uttar Pradesh (SUP) 

Capital Incentive Scheme. 

11. Infrastructure Assistance Schemes 

(State of Gujarat). 

12. Capital Incentive Scheme 

Uttaranchel. 

13. Capital Incentive Schemes (SOM). 

14. Electricity Duty Exemption 

Scheme (SOM). 

Preliminary Results of New Shipper 

Review 

In accordance with section 

751(a)(2)(B)(i) of the Act and 19 CFR 

351.221(b)(4)(i), we have calculated an 

individual subsidy rate for SRF for the 

POR. We preliminarily determine the 

total countervailable subsidy to be 3.57 

percent ad valorem for SRF. 

Assessment Rates/Cash Deposits 

If these preliminary results are 

adopted in our final results of this 

review, 15 days after publication of the 

final results of this review the 

Department intends to instruct CBP to 

liquidate shipments of subject 

merchandise produced and exported by 

SRF entered or withdrawn from 

warehouse, for consumption from 

January 1, 2009, through December 31, 

2009, at 3.57 percent ad valorem of the 

entered value. 

The Department intends to also 

instruct CBP to collect cash deposits of 

estimated countervailing duties at the 

rate of 3.57 percent ad valorem of the 

entered value on shipments of the 

subject merchandise produced and 

exported by SRF, entered, or withdrawn 

from warehouse, for consumption on or 

after the date of publication of the final 

results of this review. We intend to 

instruct CBP to continue to collect cash 

deposits for non-reviewed companies at 

the applicable company-specific CVD 

rate for the most recent period or allothers rate established in the 

investigation. These rates shall apply to 

all non-reviewed companies until a 

review of a company assigned these 

rates is requested. 

Further, effective upon publication of 

the final results, we intend to instruct 

CBP that importers may no longer post 

a bond or other security in lieu of a cash 

deposit on imports of PET film from 

India, manufactured and exported by 

SRF. These cash deposit requirements, 

when imposed, shall remain in effect 

until further notice. 

Verification 

As provided in section 782(i)(3) of the 

Act, the Department intends to conduct 

verification of the GOI and SRF 

questionnaire responses following the 

issuance of the preliminary results. 

Disclosure and Public Hearing 

We will disclose the calculations used 

in our analysis to parties to this segment 

of the proceeding within ten days of the 

public announcement of this notice. See 

19 CFR 351.224(b). 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, 

within 30 days of the date of publication 

of this notice. See 19 CFR 351.310(c). 

Requests should contain: (1) The party’s 

name, address and telephone number; 

(2) the number of participants; and (3) 

a list of issues to be discussed. 

Pursuant to 19 CFR 351.309, 

interested parties may submit written 

comments in response to these 

preliminary results. Unless the time 

period is extended by the Department, 

case briefs are to be submitted within 30 

days after the date of publication of this 

notice in the Federal Register. See 19 

CFR 351.309(c). Rebuttal briefs, which 

must be limited to arguments raised in 

case briefs, are to be submitted no later 

than five days after the time limit for 

filing case briefs. See 19 CFR 

351.309(d). Parties who submit 

arguments in this proceeding are 


emcdonald on DSK2BSOYB1PROD with NOTICES
81584 Federal Register / Vol. 75, No. 248 / Tuesday, December 28, 2010 / Notices 

requested to submit with the argument: 

(1) A statement of the issues; (2) a brief 

summary of the argument; and (3) a 

table of authorities cited. Further, we 

request that parties submitting written 

comments provide the Department with 

a diskette containing an electronic copy 

of the public version of such comments. 

Case and rebuttal briefs must be served 

on interested parties, in accordance 

with 19 CFR 351.303(f). 

Unless extended, the Department will 

issue the final results of this new 

shipper review, including the results of 

its analysis of issues raised in any 

written briefs, not later than 90 days 

after the date of signature of this notice, 

pursuant to section 751(a)(2)(B)(iv) of 

the Act. 

These preliminary results are issued 

and published in accordance with 

sections 751(a)(1) and 777(i)(1) of the 

Act, and 19 CFR 351.221(b)(4). 

Dated: December 21, 2010. 

Christian Marsh, 

Acting Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2010–32677 Filed 12–27–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

RIN 0648–XA041 

Endangered and Threatened Species; 

Recovery Plan for the Sperm Whale 

AGENCY: National Marine Fisheries 

Service, National Oceanic and 

Atmospheric Administration, 

Commerce. 

ACTION: Notice of Availability; recovery 

plan for the sperm whale. 

SUMMARY: The National Marine 

Fisheries Service (NMFS) announces the 

adoption of an Endangered Species Act 

(ESA) Recovery Plan for the Sperm 

whale (Physeter macrocephalus). The 

Recovery Plan contains revisions and 

additions in consideration of public 

comments received on the proposed 

draft Recovery Plan for the sperm 

whale. 

ADDRESSES: Additional information 

about the Recovery Plan may be 

obtained by writing to Monica 

DeAngelis, National Marine Fisheries 

Service, Southwest Regional Office, 

Protected Resources Division, 501 W. 

Ocean Blvd., Suite 4200, Long Beach, 

CA 90802 or send an electronic message 

to Monica.DeAngelis@noaa.gov. 

Electronic copies of the Recovery Plan 

and a summary of NMFS’ response to 

public comments on the Recovery Plan 

are available online at the NMFS Office 

of Protected Resources Web site: 

http://www.nmfs.noaa.gov/pr/species/ 

mammals/cetaceans/spermwhale.htm. 

FOR FURTHER INFORMATION CONTACT: 

Monica DeAngelis (562) 980–3232, 

e-mail Monica.DeAngelis@noaa.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

Recovery plans describe actions 

considered necessary for the 

conservation and recovery of species 

listed under the Endangered Species Act 

of 1973 (ESA), as amended (16 U.S.C. 

1531 et seq.). The ESA requires that 

recovery plans incorporate (1) Objective, 

measurable criteria that, when met, 

would result in a determination that the 

species is no longer threatened or 

endangered; (2) site-specific 

management actions necessary to 

achieve the plan’s goals; and (3) 

estimates of the time required and costs 

to implement recovery actions. The ESA 

requires the development of recovery 

plans for listed species unless such a 

plan would not promote the recovery of 

a particular species. NMFS’ goal is to 

restore endangered sperm whale 

(Physeter macrocephalus) populations 

to the point where they are again secure, 

self-sustaining members of their 

ecosystems and no longer need the 

protections of the ESA. 

The sperm whale was listed as an 

endangered species under the ESA on 

December 2, 1970 (35 FR 18319). Sperm 

whales have a global distribution and 

can be found in the Atlantic, Pacific, 

and Indian Oceans. They were subject to 

commercial whaling for more than two 

and a half centuries and in all parts of 

the world. The long history of whaling 

and the complex social structure and 

reproductive behavior of sperm whales 

have confounded assessments of 

population status and structure. 

Historical catch records are sparse or 

nonexistent in some areas of the world 

and over long periods of time, and gross 

under-reporting or mis-reporting of 

modern catch data has taken place on a 

large scale. The wide-ranging, generally 

offshore distribution of sperm whales 

and their long submergence times, 

complicate efforts to estimate 

abundance. Although the aggregate 

abundance worldwide is probably at 

least several hundred thousand 

individuals, the extent of depletion and 

degree of recovery of populations are 

uncertain. Currently, the population 

structure of sperm whales has not been 

adequately defined. Most models have 

assigned arbitrary boundaries, often 

based on patterns of historic whaling 

activity and catch reports, rather than 

on biological evidence. Populations are 

often divided on an ocean basin level. 

Therefore, the Recovery Plan is 

organized, for convenience, by ocean 

basin and discussed in three sections: 

Those sperm whales in the Atlantic 

Ocean/Mediterranean Sea, including the 

Caribbean Sea and Gulf of Mexico, those 

in the Pacific Ocean and its adjoining 

seas and gulfs, and those in the Indian 

Ocean. There is a need for an improved 

understanding of the genetic differences 

among and between populations, in 

order to determine distinct population 

units. Although there is new 

information, existing knowledge of 

population structure for this nearly 

continually distributed species remains 

poor. New information is currently 

insufficient to identify units that are 

both discrete and significant to the 

survival of the species. 

NMFS released the draft Recovery 

Plan and requested comments from the 

public on July 6, 2006 (71 FR 38385). A 

summary of comments and NMFS 

responses to comments are available 

electronically (see ADDRESSES). 

Concurrent with the public comment 

period, NMFS requested comments from 

three independent peer-reviewers. The 

peer-review comment period was 

extended for another 60 days after the 

public comment period was closed to 

allow peer-reviewers more time. 

The final Recovery Plan contains: 

(1) A comprehensive review of sperm 

whale ecology, (2) a threats assessment, 

(3) biological and recovery criteria for 

downlisting and delisting, (4) actions 

necessary for the recovery of the 

species, (5) an implementation 

schedule, and (6) estimates of time and 

cost to recovery. 

The Recovery Plan presents a 

recovery strategy to address the 

potential threats based on the best 

available science and presents guidance 

for use by agencies and interested 

parties to assist in the recovery of the 

sperm whale. The threats assessment 

ranked threats as either having a/an 

Unknown, Unknown but Potentially 

Low, Low, Medium, or High relative 

impact to the recovery of sperm whales. 

Ranking assignments were determined 

by an expert panel with contributions 

from reviewers. Following are the threat 

rankings relative to the recovery of the 

sperm whale: 

• Fishery interactions in the Indian 

Ocean, anthropogenic noise from ship 

noise, oil and gas exploration, military 

sonar and explosives, contaminants and 

pollutants, and loss of prey base due to 

climate and ecosystem change were 

ranked as having an unknown impact. 


emcdonald on DSK2BSOYB1PROD with NOTICES