Federal Register / Vol. 74, No. 171 / Friday, September 4, 2009 / Notices 45811 

10We divided the total dumping margins 

(calculated as the difference between NV and EP or 

CEP) for each importer by the total quantity of 

subject merchandise sold to that importer during 

the POR to calculate a per-unit assessment amount. 

We will direct CBP to assess importer-specific 

assessment rates based on the resulting per-unit 

(i.e., per-kilogram) rates by the weight in kilograms 

of each entry of the subject merchandise during the 

POR. 

administrative review, including the 

results of our analysis of the issues 

raised by the parties in their comments, 

within 120 days of publication of the 

preliminary results. The assessment of 

antidumping duties on entries of 

merchandise covered by this review and 

future deposits of estimated duties shall 

be based on the final results of this 

review. 

Assessment Rates 

Upon completion of this 

administrative review, pursuant to 19 

CFR 351.212(b), the Department will 

calculate an assessment rate on all 

appropriate entries. For the mandatory 

respondents, QVD and Vinh Hoan, and 

new shippers, SAMEFICO and 

Cadovimex II, we will calculate 

importer-specific duty assessment rates 

on a per-unit basis.10 Where the 

assessment rate is de minimis, we will 

instruct CBP to assess no duties on all 

entries of subject merchandise by that 

importer. We will instruct CBP to 

liquidate entries containing 

merchandise from the PRC-wide entity 

at the PRC-wide rate we determine in 

the final results of review. We will issue 

assessment instructions to CBP 15 days 

after the date of publication of the final 

results of review. 

Cash Deposit Requirements 

The following cash deposit 

requirements will be effective upon 

publication of the final results of this 

administrative review for all shipments 

of the subject merchandise entered, or 

withdrawn from warehouse, for 

consumption on or after the publication 

date, as provided for by section 

751(a)(2)(C) of the Act: (1) For the 

exporters listed above, except for 

Cadovimex II and SAMEFICO, the cash 

deposit rate will be that established in 

the final results of this review (except, 

if the rate is zero or de minimis, the cash 

deposit will be zero); (2) for previously 

investigated or reviewed Vietnam and 

non-Vietnam exporters not listed above 

that have separate rates, the cash 

deposit rate will continue to be the 

exporter-specific rate published for the 

most recent period; (3) for all Vietnam 

exporters of subject merchandise which 

have not been found to be entitled to a 

separate rate, the cash deposit rate will 

be the Vietnam-wide rate of $2.11 per 

kilogram; and (4) for all non-Vietnam 

exporters of subject merchandise which 

have not received their own rate, the 

cash deposit rate will be the rate 

applicable to the Vietnam exporters that 

supplied that non-Vietnam exporter. 

These deposit requirements, when 

imposed, shall remain in effect until 

further notice. 

The following cash deposit 

requirements will be effective upon 

publication of the final results of this 

review for all shipments of subject 

merchandise from new shippers 

Cadovimex II or SAMEFICO entered, or 

withdrawn from warehouse, for 

consumption on or after the publication 

date, as provided for by section 

751(a)(2)(C) of the Act: (1) For subject 

merchandise produced and exported by 

Cadovimex II or produced and exported 

by SAMEFICO, the cash deposit rate 

will be zero; (2) for subject merchandise 

exported by Cadovimex II or SAMEFICO 

but not manufactured by Cadovimex II 

or SAMEFICO, the cash deposit rate will 

continue to be the Vietnam-wide rate 

(i.e., $2.11 per kilogram); and (3) for 

subject merchandise manufactured by 

Cadovimex II or SAMEFICO, but 

exported by any other party, the cash 

deposit rate will be the rate applicable 

to the exporter. If the cash deposit rate 

calculated in the final results is zero or 

de minimis, no cash deposit will be 

required for those specific producerexporter combinations. These cash 

deposit requirements, when imposed, 

shall remain in effect until further 

notice. 

Notification to Interested Parties 

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 POR. 

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. 

We are issuing and publishing this 

determination in accordance with 

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

Act. 

Dated: August 28, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

[FR Doc. E9–21429 Filed 9–3–09; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

(C–552–805) 

Polyethylene Retail Carrier Bags from 

the Socialist Republic of Vietnam: 

Preliminary Affirmative Countervailing 

Duty Determination and Alignment of 

Final Countervailing Duty 

Determination with Final Antidumping 

Duty Determination 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: The Department of Commerce 

(the Department) preliminarily 

determines that countervailable 

subsidies are being provided to 

producers and exporters of polyethylene 

retail carrier bags (PRCBs) from the 

Socialist Republic of Vietnam 

(Vietnam). For information on the 

estimated subsidy rates, see the 

‘‘Suspension of Liquidation’’ section of 

this notice. This notice also serves to 

align the final countervailing duty 

(CVD) determination in this 

investigation with the final 

determination in the companion 

antidumping duty (AD) investigation of 

PRCBs from Vietnam. 

EFFECTIVE DATE: September 4, 2009. 

FOR FURTHER INFORMATION CONTACT: Jun 

Jack Zhao or Gene Calvert, 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) 482–1396 and (202) 

482–3586, respectively. 

SUPPLEMENTARY INFORMATION: 

Case History 

The following events have occurred 

since the April 20, 2009 initiation of 

this investigation. See Polyethylene 

Retail Carrier Bags From the Socialist 

Republic of Vietnam: Initiation of 

Countervailing Duty Investigation and 

Request for Public Comment on the 

Application of the Countervailing Duty 

Law to Imports From the Socialist 

Republic of Vietnam, 74 FR 19064 

(April 27, 2009) (Initiation Notice). 

On April 21, 2009, the Department 

met with officials of the government of 

Vietnam (GOV) to provide an overview 

of the procedures and timetable of the 

investigation. See Memorandum to 

Barbara E. Tillman, Director, AD/CVD 

Operations, Office 6, ‘‘Meeting with the 

Government of Socialist Republic of 

Vietnam (GOV): Countervailing Duty 

Investigation of Polyethylene Retail 

Carrier Bags from the Socialist Republic 


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1The calculated signature date is January 10, 

2010, a Sunday. The next business day is January 

11, 2010. 

of Vietnam’’ (April 23, 2009). On May 

13, 2009, the Department selected as 

mandatory respondents the three largest 

Vietnamese producers/exporters of 

PRCBs that could reasonably be 

examined: Advance Polybag Co., Ltd. 

(API), Chin Sheng Company, Ltd. (Chin 

Sheng), and Fotai Vietnam Enterprise 

Corp. (Fotai Vietnam) and Fotai 

Enterprise Corporation (collectively, 

Fotai). See Memorandum to John M. 

Andersen, Acting Deputy Assistant 

Secretary, AD/CVD Operations, 

‘‘Selection of Respondents for the 

Countervailing Duty Investigation of 

Polyethylene Retail Carrier Bags from 

the Socialist Republic of Vietnam’’ (May 

13, 2009). A public version of this 

memorandum is on file in the 

Department’s Central Records Unit 

(CRU) in Room 1117 of the main 

Commerce building. On May 18, 2009, 

we issued the CVD questionnaire to the 

GOV, requesting that the GOV forward 

the company sections of the 

questionnaire to the mandatory 

company respondents. 

On May 22, 2009, the U.S. 

International Trade Commission (ITC) 

issued its affirmative preliminary 

determination that there is a reasonable 

indication that an industry in the 

United States is materially injured by 

reason of imports from Vietnam of 

PRCBs. See Polyethylene Retail Carrier 

Bags From Indonesia, Taiwan, and 

Vietnam; Determinations, 74 FR 25771 

(May 29, 2009); and Polyethylene Retail 

Carrier Bags From Indonesia, Taiwan, 

and Vietnam, USITC Pub. 4080, Inv. 

Nos. 701–TA–462 and 731–TA–1156– 

1158 (May 2009). 

On May 28, 2009, the GOV requested 

that the Department conduct a 

questionnaire presentation in Hanoi. On 

June 4, 2009, the Department informed 

the GOV that it would be unable to 

conduct a questionnaire presentation 

given the timing of the request relative 

to the progress of the investigation. See 

Memorandum to the File, 

‘‘Communications with the Embassy of 

the Socialist Republic of Vietnam 

Concerning Request for Questionnaire 

Presentation’’ (June 5, 2009) and the 

June 17, 2009 GOV submission 

(responding to the Department’s June 4, 

2009 letter). On June 9, 2009, the GOV 

requested that the Department modify 

the May 18, 2009 questionnaire by 

establishing a ‘‘cut–off date,’’ limiting 

the time period covered by the 

questionnaire. During a follow–up ex 

parte meeting with the GOV, the 

Department stated that the issue of 

whether there should be a cut–off date, 

and what such a date would be, could 

not be determined until the preliminary 

determination. We also stated it was 

necessary, therefore, for the 

questionnaire to cover the entire average 

useful life (AUL) selected for this 

investigation (11 years). See 

Memorandum to the File, ‘‘Ex–Parte 

Meeting with Counsel for the 

Government for the Socialist Republic 

of Vietnam and Chin Sheng Trading 

Production Co., Ltd.’’ (June 18, 2009). 

On June 4, 2009, we published a 

postponement of the preliminary 

determination of this investigation until 

August 28, 2009. See Polyethylene 

Retail Carrier Bags from the Socialist 

Republic of Vietnam: Postponement of 

Preliminary Determination in the 

Countervailing Duty Investigation, 74 FR 

26846 (June 4, 2009). We received 

responses from the GOV and the three 

mandatory company respondents on 

July 8, 2009, to our May 18, 2009 

questionnaire. On July 24, 2009, we 

issued supplemental questionnaires to 

the GOV and the three respondents. We 

received a response from API on August 

7, 2009, and responses from the GOV, 

Chin Sheng, and Fotai on August 17, 

2009. 

On June 25, 2009, Hilex Poly Co., LLC 

and Superbag Corporation (collectively, 

Petitioners) submitted new subsidy 

allegations covering nine programs. On 

July 17, 2009, the Department 

determined to investigate seven of these 

newly alleged subsidy programs 

pursuant to section 775 of the Tariff Act 

of 1930, as amended (the Act). See 

Memorandum to Barbara E. Tillman, 

Director, AD/CVD Operations, Office 6, 

‘‘Countervailing Duty Investigation of 

Polyethylene Retail Carrier Bags from 

the Socialist Republic of Vietnam: 

Initiation Analysis 

of New Subsidy Allegations’’ (July 17, 

2009). Also on July 17, 2009, the GOV 

submitted objections to the newly 

alleged subsidy programs, claiming 

Petitioners could have raised the 

allegations in the petition, but had 

chosen not to do so in order to 

manipulate the schedule of the 

investigation, depriving the GOV of 

adequate time to respond to 

questionnaires. Questions regarding 

these newly alleged subsidies were sent 

to the GOV and the three company 

respondents on July 17, 2009. API 

submitted its questionnaire response on 

July 30. The GOV, Chin Sheng, and 

Fotai submitted responses on August 7 

and 10, 2009 (narrative responses were 

due on August 7 and attachments were 

due on August 10). 

On July 17, 2009, Petitioners 

submitted a second set of new subsidy 

allegations regarding two programs. On 

July 28, 2009, the Department 

determined to investigate both subsidy 

programs pursuant to section 775 of the 

Act. See Memorandum to Barbara E. 

Tillman, Director, AD/CVD Operations, 

Office 6, ‘‘Countervailing Duty 

Investigation of Polyethylene Retail 

Carrier Bags from the Socialist Republic 

of Vietnam: Initiation Analysis of July 

17, 2009 New Subsidy Allegations’’ 

(July 28, 2009). Questions regarding this 

second set of newly alleged subsidies 

were sent to the GOV and the three 

company respondents on July 28, 2009. 

API responded to the questionnaire on 

August 7, 2009, and the GOV, Chin 

Sheng, and Fotai responded on August 

17, 2009. 

On August 19, 2009, Petitioners 

submitted pre–preliminary 

determination comments. Fotai 

submitted rebuttal comments on August 

21, 2009, API on August 24, 2009, and 

the GOV on August 25, 2009. 

Alignment of Final Countervailing Duty 

Determination with Final Antidumping 

Duty Determination 

On April 20, 2009, the Department 

initiated the CVD and AD investigations 

of PRCBs from Vietnam. See Initiation 

Notice and Polyethylene Retail Carrier 

Bags From Indonesia, Taiwan, and the 

Socialist Republic of Vietnam: Initiation 

of Antidumping Duty Investigations, 74 

FR 19049 (April 27, 2009). The CVD 

investigation and the AD investigation 

have the same scope with regard to the 

merchandise covered. 

On August 24, 2009, Petitioners 

submitted a letter, in accordance with 

section 705(a)(1) of the Act, requesting 

alignment of the final CVD 

determination with the final AD 

determination of PRCBs from Vietnam. 

Therefore, in accordance with section 

705(a)(1) of the Act and 19 CFR 

351.210(b)(4), we are aligning the final 

CVD determination with the final AD 

determination. Consequently, the final 

CVD determination will be issued on 

the same date as the final AD 

determination, which is currently 

scheduled to be issued no later than 

January 11, 2010, unless postponed.1

Scope Comments 

As explained in the preamble to the 

Department’s regulations, we set aside a 

period of time in the Initiation Notice 

for parties to raise issues regarding 

product coverage, and encouraged all 

parties to submit comments within 21 

calendar days of publication of that 

notice. See Antidumping Duties; 

Countervailing Duties; Final Rule, 62 FR 

27296, 27323 (May 19, 1997); and 

Initiation Notice, 74 FR at 19065. No 


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such comments have been filed on the 

record of either this investigation or the 

companion AD investigation. 

Scope of the Investigation 

The scope of this investigation covers 

polyethylene retail carrier bags, which 

also may be referred to as t–shirt sacks, 

merchandise bags, grocery bags, or 

checkout bags. The subject merchandise 

is defined as non–sealable sacks and 

bags with handles (including 

drawstrings), without zippers or integral 

extruded closures, with or without 

gussets, with or without printing, of 

polyethylene film having a thickness no 

greater than 0.035 inch (0.889 mm) and 

no less than 0.00035 inch (0.00889 mm), 

and with no length or width shorter 

than 6 inches (15.24 cm) or longer than 

40 inches (101.6 cm). The depth of the 

bag may be shorter than 6 inches but not 

longer than 40 inches (101.6 cm). 

PRCBs are typically provided without 

any consumer packaging and free of 

charge by retail establishments, e.g., 

grocery, drug, convenience, department, 

specialty retail, discount stores, and 

restaurants to their customers to 

package and carry their purchased 

products. The scope of this investigation 

excludes (1) polyethylene bags that are 

not printed with logos or store names 

and that are closeable with drawstrings 

made of polyethylene film and (2) 

polyethylene bags that are packed in 

consumer packaging with printing that 

refers to specific end–uses other than 

packaging and carrying merchandise 

from retail establishments, e.g., garbage 

bags, lawn bags, trash–can liners. 

Imports of merchandise included 

within the scope of this investigation 

are currently classifiable under 

statistical category 3923.21.0085 of the 

Harmonized Tariff Schedule of the 

United States (HTSUS). This 

subheading may also cover products 

that are outside the scope of this 

investigation. Furthermore, although the 

HTSUS subheading is provided for 

convenience and customs purposes, the 

written description of the scope of this 

investigation is dispositive. 

Application of the CVD Law to Vietnam 

This is the first CVD investigation of 

exports from Vietnam. Vietnam has 

been treated as a non–market economy 

(NME) country in all past AD 

investigations and administrative 

reviews. See, e.g., Memorandum to 

Faryar Shirzad, Assistant Secretary, 

Import Administration, Antidumping 

Duty Investigation of Certain Frozen 

Fish Fillets from the Socialist Republic 

of Vietnam - Determination of Market 

Economy Status, November 8, 2002 (this 

document is available online at http:// 

ia.ita.doc.gov/download/vietnam-nmestatus/vietnam-market-statusdetermination.pdf); see also Uncovered 

Innerspring Units from the Socialist 

Republic of Vietnam: Notice of 

Preliminary Determination of Sales at 

Less Than Fair Value, 73 FR 45738, 

45739 (August, 6, 2008), unchanged in 

Uncovered Innerspring Units from the 

Socialist Republic of Vietnam: Notice of 

Final Determination of Sales at Less 

Than Fair Value, 73 FR 62479 (October 

21, 2008). In accordance with section 

771(18)(C)(i) of the Act, any 

determination that a country is an NME 

country shall remain in effect until 

revoked by the administering authority. 

See, e.g., Tapered Roller Bearings and 

Parts Thereof, Finished and Unfinished, 

From the People’s Republic of China: 

Preliminary Results of 2001–2002 

Administrative Review and Partial 

Rescission of Review, 68 FR 7500, 7500 

(February 14, 2003), unchanged in 

Tapered Roller Bearings and Parts 

Thereof, Finished and Unfinished, from 

the People’s Republic of China: Final 

Results of 2001–2002 Administrative 

Review and Partial Rescission of 

Review, 68 FR 70488 (December 18, 

2003). 

According to the petition, there is no 

statutory bar to applying countervailing 

duties to imports from non–market 

economy countries like Vietnam. See 

the March 31, 2009 Petition. Citing 

Georgetown Steel Corp. v. United States, 

801 F.2d 1308 (Fed. Cir. 1986) 

(Georgetown Steel), the petition argues 

that the Court of Appeals for the Federal 

Circuit affirmed the Department’s 

discretion regarding application of the 

countervailing duty law to NME 

countries. Id. 

Following its assessment of another 

NME country, the People’s Republic of 

China (the PRC), the Department, in its 

final affirmative countervailing duty 

determination on coated free sheet 

paper from the PRC, determined that the 

current nature of the Chinese economy 

does not create obstacles to applying the 

necessary criteria in the countervailing 

duty law. See Memorandum to David M. 

Spooner, Assistant Secretary, Import 

Administration, Countervailing Duty 

Investigation of Coated Free Sheet Paper 

from the People’s Republic of China: 

Whether the Analytical Elements of the 

Georgetown Steel Holding are 

Applicable to the PRC’s Present-day 

Economy, March 29, 2007; 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 IDM) 

at Comment 1; see also 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 at Comment 1. 

The petition argues that the 

Vietnamese economy, like the PRC’s 

economy, is substantially different from 

the Soviet–style economy investigated 

in Georgetown Steel and that the 

Department should not have any special 

difficulties in the identification and 

valuation of subsidies involving a non– 

market economy like Vietnam. See the 

March 31, 2009 Petition. Finally, the 

petition argues that Vietnam’s economy 

significantly mirrors the PRC’s presentday economy and is at least as different 

from the Soviet–style economy at issue 

in Georgetown Steel, as the PRC’s 

economy was found to be in 2007. Id. 

The petition also argues that 

Vietnam’s accession to the World Trade 

Organization (WTO) allows the 

Department to apply countervailing 

duties on imports from that country. Id. 

The WTO Subsidies and Countervailing 

Measures Agreement (SCM Agreement), 

similar to U.S. law, permits the 

imposition of countervailing duties on 

subsidized imports from member 

countries and nowhere exempts non– 

market economy imports from being 

subject to the provisions of the SCM 

Agreement. As Vietnam agreed to the 

SCM Agreement and other WTO 

provisions on the use of subsidies, the 

petition argues that Vietnam should be 

subject to the same disciplines as all 

other WTO members. Id. 

Given the complex legal and policy 

issues involved in determining whether 

the CVD law should be applied to 

Vietnam, the Department invited public 

comment on this matter. See Initiation 

Notice, 74 FR at 19067. The comments 

we received are on file in the 

Department’s CRU, and can be accessed 

on the Web at http://ia.ita.doc.gov/iahighlights-and-news. Informed by those 

comments and based on our assessment 

of the differences between the 

Vietnamese economy today and the 

Soviet–style economies that were the 

subject of Georgetown Steel, we 

preliminarily determine that the 

countervailing duty law can be applied 

to imports from Vietnam. For a detailed 

discussion of the Department’s research 

and analysis, see Memorandum to 

Ronald K. Lorentzen, Acting Assistant 

Secretary, Import Administration, 

‘‘Countervailing Duty Investigation of 

Polyethylene Retail Carrier Bags from 

the Socialist Republic of Vietnam 

Whether the CVD law is Applicable to 


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Vietnam’s Present Day Economy’’ 

(August 28, 2009). 

Date of Applicability of CVD Law to 

Vietnam 

We preliminarily determine that it is 

appropriate and administratively 

desirable to identify a uniform date from 

which the Department will identify and 

measure subsidies in Vietnam for 

purposes of the CVD law, and have 

adopted January 11, 2007, the date on 

which Vietnam became a member of the 

WTO, as that date. We have selected 

this date because of the reforms in 

Vietnam’s economy in the years leading 

up to its WTO accession and the linkage 

between those reforms and Vietnam’s 

WTO membership. The changes in 

Vietnam’s economy that were brought 

about by those reforms permit the 

Department to determine whether 

countervailable subsidies were being 

bestowed on Vietnamese producers. For 

example, the GOV has created room for 

private and foreign ownership in the 

production system by encouraging 

private entrepreneurship, liberalizing 

the foreign investment regime, and 

equitizing state–owned enterprises 

(SOEs). 

Additionally, Vietnam’s accession 

agreement contemplates application of 

the CVD law. While the accession 

agreement itself would not preclude 

application of the CVD law prior to the 

date of accession, the Working Party 

Report at Paragraph 255 regarding 

benchmarks for measuring subsidies 

and Vietnam’s assumption of 

obligations with respect to subsidies 

provides support for the notion that the 

Vietnamese economy had reached the 

stage where subsidies and disciplines 

on subsidies (e.g., countervailing duties) 

were meaningful. Accession of Vietnam: 

Report of the Working Party on the 

Accession of Viet Nam, WT/ACC/VNM/ 

48 (October 27, 2006). 

Period of Investigation 

The period for which we are 

measuring subsidies, i.e., the period of 

investigation (POI), is January 1, 2008 

through December 31, 2008. 

Subsidies Valuation Information 

Allocation Period 

The AUL period in this proceeding, as 

described in 19 CFR 351.524(d)(2), is 11 

years according to the U.S. Internal 

Revenue Service’s 1977 Class Life Asset 

Depreciation Range System for assets 

used to manufacture PRCBs. No party in 

this proceeding has disputed this 

allocation period. There are no non– 

recurring subsidy benefits in this 

preliminary determination that exceed 

0.5 percent of relevant sales, and thus 

no benefits were allocated across the 

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

Denominator and Attribution of 

Subsidies 

When selecting an appropriate 

denominator for use in calculating the 

ad valorem countervailable subsidy rate, 

the Department considered the basis for 

the approval of benefits under each 

program at issue. For example, export 

subsidies are attributed only to products 

exported and export sales are used as 

the denominator, see 19 CFR 

351.525(b)(2); while domestic subsidies 

are attributed to the total sales of all 

products of each respondent and total 

sales are used as the denominator in our 

calculations. See 19 CFR 351.525(b)(3). 

All three respondents reported that they 

had no cross–owned affiliates that 

received subsidies and no trading 

companies involved in sales 

transactions; therefore, we are using 

only respondents’ own sales figures as 

denominators. Id. 

API acts solely as a processor on 

behalf of its U.S. parent. Its sales 

revenue consists solely of conversion 

fees paid by the parent. It reported, 

however, the value of the merchandise 

that is reported to U.S. Customs and 

Border Protection (CBP) when the 

merchandise is entered into the United 

States as the value to be used as the 

denominator for all subsidy 

calculations. This constructed sales 

value includes the conversion fees plus 

the value of the materials converted. 

We preliminarily determine that API’s 

sales revenue figure (i.e., its conversion 

fees) should be used as the denominator 

for subsidy calculations. This figure is 

the income value from its financial 

statements and its tax return. It is the 

basis used by API to claim the income 

tax preferences described below. The 

value of the merchandise, by contrast, 

represents the income of API’s U.S. 

parent. Furthermore, we note that API 

did not adequately address why such an 

adjustment is warranted in this case and 

whether the facts in this case meet the 

criteria for the Department to consider 

such an adjustment set forth in Ball 

Bearings and Parts Thereof From 

Thailand; Final Results of 

Countervailing Duty Administrative 

Review, 57 FR 26646, 26647 (June 15, 

1992), and in CFS IDM at Comment 21. 

Discount Rate for Allocation 

As noted above, there are no non– 

recurring subsidy benefits in this 

preliminary determination that exceed 

0.5 percent of relevant sales, and thus 

no benefits were allocated across the 

AUL. As such, discount rates were not 

required for this preliminary 

determination. 

Interest Rate Benchmarks 

Section 771(5)(E)(ii) of the Act 

explains that the benefit for loans is the 

‘‘difference between the amount the 

recipient of the loan pays on the loan 

and the amount the recipient would pay 

on a comparable commercial loan that 

the recipient could actually obtain on 

the market,’’ indicating that a 

benchmark must be a market–based rate. 

Normally, the Department uses 

comparable commercial loans reported 

by the company for benchmarking 

purposes. 19 CFR 351.505(a)(3)(i). If the 

firm does not receive any comparable 

commercial loans during the relevant 

periods, the Department’s regulations 

provide that we ‘‘may use a national 

average interest rate for comparable 

commercial loans.’’ 19 CFR 

351.505(a)(3)(ii). The Department, 

however, has determined that loans 

provided by Vietnamese banks reflect 

significant government intervention in 

the banking sector and do not reflect 

rates that would be found in a 

functioning market. See Memorandum 

to Ronald K. Lorentzen, Acting 

Assistant Secretary, Import 

Administration, ‘‘Countervailing Duty 

Investigation of Polyethylene Retail 

Carrier Bags from the Socialist Republic 

of Vietnam A Review of Vietnam’s 

Banking Sector’’ (August 28, 2009) 

(Vietnam Banking Memorandum). Thus, 

the benchmarks that are described 

under 19 CFR 351.505(a)(3) are not 

appropriate. The Department is, 

therefore, preliminarily determining 

that it must use an external, market– 

based benchmark interest rate. 

For loans denominated in Vietnamese 

dong, we are calculating the external 

benchmark following, where 

appropriate, the regression–based 

methodology first developed in the CVD 

investigation of Coated Free Sheet Paper 

from the PRC, and updated in several 

subsequent PRC investigations, most 

recently Citric Acid. See CFS IDM at 

‘‘Benchmarks’’ section, and Citric Acid 

and Certain Citrate Salts From the 

People’s Republic of China: Final 

Affirmative Countervailing Duty 

Determination, 74 FR 16836 (April 13, 

2009) and accompanying Issues and 

Decision Memorandum at ‘‘Benchmarks 

and Discount Rates’’ section. This 

methodology bases the benchmark 

interest rate on the inflation–adjusted 

interest rates of countries with per 

capita gross national incomes (GNIs) 

similar to Vietnam’s, and takes into 

account a key factor involved in interest 

rate formation, that of the quality of a 

country’s institutions, which is not 


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directly tied to the state–imposed 

distortions in the banking sector 

discussed in the Vietnam Banking 

Memorandum. 

Following the methodology 

developed in the PRC investigations, we 

first identified the countries most 

similar to Vietnam 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. Vietnam, with a per 

capita GNI of $890, is near the upper 

boundary of the low income category 

(and the lower boundary of the lower– 

middle income category), which the 

World Bank established as $975 during 

the POI. However, data are not currently 

available for many of the countries in 

the low income ‘‘basket.’’ See 

Memorandum to Mark Hoadley, 

Program Manager, AD/CVD Operations, 

Office 6, ‘‘Countervailing Duty 

Investigation of Polyethylene Retail 

Carrier Bags (PRCBs) from the Socialist 

Republic of Vietnam: Preliminary 

Determination Loan Benchmark 

Analysis’’ (August 28, 2009) (Loan 

Benchmark Memorandum). Moreover, 

several of the countries in the basket 

appear to be involved in crises that 

would preclude a functional internal 

lending system. These factors suggest 

that the low income basket of countries 

cannot serve as the basis of a benchmark 

interest rate. Thus, we are preliminarily 

determining to use the lower–middle 

income basket of countries as the basis 

of our regression analysis. 

With the following exceptions, we 

have used the interest and inflation 

rates reported in the International 

Financial Statistics (IFS), collected by 

the International Monetary Fund, for the 

countries identified as ‘‘lower–middle 

income’’ by the World Bank. First, we 

did not include those economies the 

Department considered to be non– 

market economies for any part of the 

years in question: the PRC, Armenia, 

Azerbaijan, Belarus, Georgia, Moldova, 

and Turkmenistan. Second, the pool 

necessarily excludes any country that 

did not report both lending and 

inflation rates for the IFS for the 

relevant years, since our calculation 

requires both lending and inflation rates 

for each country considered in the 

regression analysis (i.e., we deduct 

inflation from nominal lending rates to 

derive real rates). Third, Jordan reported 

a deposit rate, not a lending rate; and 

the rates reported by Ecuador and Timor 

L’Este are dollar–denominated rates. 

Therefore, the rates for these three 

countries have been excluded. Finally, 

for each year the Department calculated 

an inflation–adjusted short–term 

benchmark rate, we have also excluded 

any countries with aberrational or 

negative real interest rates for the year 

in question. 

With the interest rates remaining, 

adjusted for inflation, we performed the 

regression analysis and calculated 

short–term interest rates, exclusive of 

inflation, for the years the Vietnamese 

dong loans were disbursed. See Loan 

Benchmark Memorandum. We did not 

need to calculate long–term Vietnamese 

dong benchmark rates. 

For loans denominated in U.S. 

dollars, we are again choosing to follow 

the methodology developed over a 

number of successive PRC 

investigations. Specifically, for U.S. 

dollar loans, the Department used as a 

benchmark the one-year dollar interest 

rates for the London Interbank Offering 

Rate (LIBOR), plus the average spread 

between LIBOR and the one-year 

corporate bond rates for companies with 

a BB rating. For long–term U.S. dollar 

loans, we added the spread between 

one-year and 5-year and 10-year BB 

bond rates in order to calculate 5-year 

and 10-year dollar benchmark rates. Id. 

Land Benchmark 

Section 351.511(a)(2) of the 

Department’s regulations sets forth the 

basis for identifying comparative 

benchmarks for determining whether a 

government good or service is provided 

for less than adequate remuneration 

(LTAR). These potential benchmarks are 

listed in hierarchical order by 

preference: (1) market prices from actual 

transactions within the country under 

investigation; (2) world market prices 

that would be available to purchasers in 

the country under investigation; or (3) 

an assessment of whether the 

government price is consistent with 

market principles. As explained in 

detail in a separate memorandum, the 

Department cannot rely on the use of so 

called ‘‘first–tier’’ and ‘‘second–tier 

benchmarks’’ to assess the benefits from 

the provision of land at LTAR in 

Vietnam, and we have also 

preliminarily determined that the 

purchase of land–use rights in Vietnam 

is not conducted in accordance with 

market principles. See Memorandum to 

Ronald K. Lorentzen, Acting Assistant 

Secretary, Import Administration, 

‘‘Countervailing Duty Investigation of 

Polyethylene Retail Carrier Bags from 

the Socialist Republic of Vietnam Land 

Markets in Vietnam’’ (August 28, 2009). 

Given these findings, we looked for an 

appropriate basis to determine the 

extent to which land–use rights are 

provided for less than adequate 

remuneration. Consistent with our PRC 

investigations in which land has been 

an issue, we have preliminarily 

determined that this analysis is best 

achieved by comparing prices for land– 

use rights in Vietnam with comparable 

market–based prices in a country at a 

comparable level of economic 

development that is within the 

geographic vicinity of Vietnam. In the 

PRC investigations, we concluded that 

the most appropriate benchmark for 

respondents’ land–use rights were sales 

of certain industrial land plots in 

industrial estates, parks, and zones in 

Thailand. We relied on prices from a 

real estate market report on Asian 

industrial property that was prepared 

outside the context of any Department 

proceeding by an independent and 

internationally recognized real estate 

agency with a long–established presence 

in Asia. In relying on a land benchmark 

from Thailand, we noted that the PRC 

and Thailand had similar levels of per 

capita GNI and that population density 

in the PRC and Thailand are roughly 

comparable. Additionally, we noted that 

producers consider a number of 

markets, including Thailand, as options 

for diversifying production bases in 

Asia beyond the PRC. Therefore, we 

concluded, the same producers may 

compare prices across borders when 

deciding what land to buy. We cited to 

a number of sources which named 

Thailand as an alternative production 

base to the PRC. 

For this investigation, we have 

obtained two additional sets of 

information from the same independent 

and internationally recognized real 

estate agency: The latest Asian 

Industrial Property Market Flash 

(AIPMF), an updated version of the 

same report relied on in the PRC 

investigations, which includes 

industrial land rental values for plots in 

industrial estates, parks, and zones in 

Thailand, the Philippines, and other 

Asian countries; and, an unpublished 

report that includes industrial land 

rental values for plots in industrial 

estates, parks, and zones in several 

Indian cites. We are placing both the 

AIPMF, which is available on the 

internet, and the unpublished Indian 

report on the record of this 

investigation. See Memorandum to 

Mark Hoadley, Program Manager, AD/ 

CVD Operations, Office 6, 

‘‘Countervailing Duty Investigation of 

Polyethylene Retail Carrier Bags 

(PRCBs) from the Socialist Republic of 

Vietnam: Preliminary Determination 

Land Benchmark Analysis’’ (August 28, 

2009) (Land Benchmark Memorandum). 

In evaluating which of these locations is 

most appropriate to use as the source of 

the benchmark, we have focused on per 

capita GNI, considering population 


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2As noted above, the GOV acknowledges there is 

preferential lending from the VDB, a state-owned 

policy bank, which does not lend to the three 

respondents. 

3The Plastics Plan was issued nearly a year and 

a half before the FYP. Both documents cover 

planning and development until 2010. 

4Another document singles out the steel industry 

for debt restructuring and requests that banks 

approve new loans to that industry, thus providing 

evidence that the SBV promotes specific industries. 

Document No. 11170/NHNN-TD, December 24, 

2008, attached to Lending Documents 

Memorandum. 

density as well (following the PRC 

precedent described above). 

Based on our analysis, we 

preliminarily determine that a simple 

average of all rental rates for industrial 

property in the cities of Pune and 

Bangalore in India provides the closest 

match among options on the record to 

Vietnam in terms of per capita GNI and 

population density. The per capita GNI 

of India is $1,070, compared to $890 for 

Vietnam, while the per capita GNI for 

the Philippines and Thailand is $1,890 

and $2,840, respectively (the AIPMF 

includes data for other Asian nations, 

all with even higher incomes; e.g., 

Singapore). While the Philippines is a 

closer match in terms of population 

density with 285 people per square 

kilometer (psk) compared to Vietnam’s 

253 people psk, India is still close with 

344 people psk. At the metropolitan 

level, Pune and Bangalore have an 

average population density of 7,791 psk 

compared to 8,805 psk for Ho Chi Minh 

City (all three respondents are located in 

Ho Chi Minh City or adjacent towns). 

The other cities analyzed in the Indian 

report have population densities much 

higher than Ho Chi Minh City. The 

calculated average of the rates for Pune 

and Bangalore is $6.088 per square 

meter per month. See Land Benchmark 

Memorandum. 

Analysis of Programs 

Based upon our analysis of the 

petition and the responses to our 

questionnaires, we 

determine the following: 

I. Programs Preliminarily Determined to 

Be Countervailable 

A. Preferential Lending for the Plastics 

Industry 

According to the petition, the GOV 

directs preferential lending to plastic 

producers through the Vietnam 

Development Bank (VDB) and state– 

owned commercial banks (SOCBs). The 

petition claims this allegation is evident 

from the GOV’s ‘‘plastics plan,’’ a fiveyear plan for the plastics industry 

subsequently provided by the GOV as 

Exhibit 15 of its July 8, 2009 

questionnaire response, and other 

official documentation and press 

reports. See the March 31, 2009 Petition 

at 78. 

The GOV states there is no policy for 

the provision of preferential lending to 

plastic producers. See the GOV’s July 8, 

2009 questionnaire response at II–27. 

According to the GOV, five-year plans 

are not ‘‘self–executing.’’ Id. at II–11. 

Instead, there must be separate, distinct 

policies creating preferences or 

subsidies designed to meet the goals of 

five-year plans. For example, according 

to the GOV, the plastics plan states only 

four specific programs available to 

plastic producers: exemptions for land 

rent, R&D subsidies, trade promotion 

funds, and loans from the VDB. Thus, 

the GOV argues, if there were a policy 

to provide preferential lending to plastic 

producers through SOCBs, it would be 

explicit, and specified within the 

plastics plan or other document issued 

by the administering agency. See the 

GOV’s August 17, 2009 questionnaire 

response at 23. In that regard, the GOV 

claims that the plastic plan’s reference 

to ‘‘preferential credit capital,’’ 

discussed below, refers only to loans 

and other financing from the VDB.2 Id. 

at 24. The GOV also emphasizes that its 

influence on SOCBs was removed 

through a series of measures beginning 

in 1997. See the GOV’s July 8, 2009 

questionnaire response at II–17. 

We preliminarily determine that 

lending from SOCBs (including joint– 

stock commercial banks that are owned 

by government entities such as other 

state–owned banks or SOEs) to Chin 

Sheng and Fotai confers a 

countervailable subsidy. (API did not 

receive any loans from banks in 

Vietnam). The central five-year plan for 

2006–2010 identifies the ‘‘plastics 

industry’’ among 14 ‘‘major tasks’’ in the 

economic development section of the 

plan, and specifically states the goal of 

satisfying demand for ‘‘plastic 

packages’’ for ‘‘daily life.’’ Exhibit 10 of 

the July 8, 2009 GOV submission (FYP) 

at 81. Plastic products are also 

discussed in other sections of the FYP. 

For example, within the regional 

development section of the FYP, the 

plan provides for a ‘‘focus’’ on the 

development of ‘‘key processing 

industries,’’ such as plastics, among 

several others, in the ‘‘southeastern 

region,’’ which is where all three 

respondents are located. FYP at 122. 

The GOV also issued a five-year plan 

explicitly for the plastics industry. 

Exhibit 15 of the July 8, 2009 GOV 

submission (Plastics Plan). According to 

the GOV, the Plastics Plan was prepared 

by the same agencies that prepared the 

FYP, and elements of the Plastics Plan 

were included in the FYP.3 The Plastics 

Plan enumerates several types of 

assistance that should be made available 

for the development of the plastics 

industry, or segments within that 

industry, including preferential credit 

capital. Article 2 of the Plastics Plan 

states that the GOV’s ‘‘preferential credit 

capital shall be concentrated on 

investment projects in support of the 

industry’s development . . . .’’ Plastics 

Plan at 18. The Plastics Plan also 

requires the State Bank of Vietnam 

(SBV), which is the central bank of 

Vietnam, to coordinate with the GOV’s 

principal planning agency and other 

government agencies ‘‘in supporting 

enterprises in the implementation of the 

approved planning.’’ Id. 

The 2007 annual report of 

Vietcombank, an SOCB that provided 

Vietnam dong loans outstanding during 

the POI in this investigation, states that 

it ‘‘arranged and financed for many state 

important projects’’ during 2007, 

indicating a goal of lending to targeted 

or encouraged projects. Exhibit 21 of the 

August 17, 2009 GOV submission at 4. 

A directive from the SBV, effective in 

the POI, ‘‘requires credit institutions 

. . . to continue increasing credit 

extension for national key projects . . . 

.’’ See Directive No. 05/2008/CT– 

NHNN, October 9, 2008, attached to 

Memorandum to the File, ‘‘Additional 

Documents Regarding Preferential 

Lending Allegation,’’ August 28, 2009 

(Lending Documents Memorandum). A 

questionnaire issued by the SBV, also in 

the POI, requests that commercial banks 

report information on interest rates 

charged to different categories of 

customers, including ‘‘preferential 

subjects under the bank’s policy.’’ See 

Document No. 10080/NHNN–CSTT, 

November 13, 2008, attached to Lending 

Documents Memorandum. Finally, a 

news bulletin posted on the SBV’s 

website during the POI discusses the 

progress of SOCBs in reducing interest 

rates to ‘‘priority policy–based 

sectors,’’4 thus appearing to 

acknowledge the existence of 

preferential policy–based lending. See 

‘‘News & Event: Commercial banks join 

in massive reduction of lending rate,’’ 

September 24, 2008, attached to 

Lending Documents Memorandum. 

Therefore, the Department finds that 

the merchandise under investigation is 

part of a state targeted, or encouraged, 

industry or project, and that there is 

evidence that loans from SOCBs are a 

designated means for developing that 

industry or project. While there may be 

no single policy document directing 

preferential lending to plastic producers 

from SOCBs, when all of the documents 

described above are evaluated together, 

it is the Department’s preliminary 


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5We note in this regard that the record indicates 

at least two other GOV efforts to implement the 

goals of the plastics plan that are not explicitly 

mentioned in the plastics plan: 1) Chin Sheng 

received tax preferences, as discussed below, 

because, apparently, of its production of plastics; 

and, 2) the GOV’s tariff schedule applies zero rates 

to imports of basic plastic raw materials 

(polyethylene and polypropylene) and plastic 

processing equipment. 

6According to the GOV, there are five SOCBs: 

Vietcombank, BIDV, Vietin Bank, Agribank, and 

Mekong Housing and Commercial Bank. 

7To be precise, except for the transaction 

involving Fotai and Binh Duong province, the 

respondents sublease land from other private 

companies that have leased the land use rights from 

the GOV. The Department could not find any 

evidence that the companies involved in these 

sublease transactions with the respondents are 

government entities or SOEs. We intend to gather 

additional information regarding the lease 

agreements between the GOV and the private 

parties from whom the respondents sublease their 

land in supplemental questionnaires. 

8Fotai’s documents reference Decision No. 189/ 

2000/QD-BTC, November 24, 2000. 

9Advance is also located in Binh Duong 

province. Chin Sheng is located in Ho Chi Minh 

Continued 

determination that SOCBs are part of the 

GOV framework to provide lending to 

targeted industries in the economy and 

that the plastics industry (which 

explicitly includes products like PRCBs 

as priority products) is one of the major 

targeted industries. Likewise, while the 

GOV argues that commercial banks have 

autonomy and are free from government 

interference, the record indicates that, 

in practice, SOCBs implement the goals 

of the state planning documents. 

Finally, despite the GOV’s claim, the 

fact that there may be subsidies 

enumerated in the plastics plan cannot 

be construed as proof of the non– 

existence of any other means of 

development. Such an interpretation 

fails to explain the purpose of the 

document beyond the four subsidy 

programs,5 and, in our view, one of the 

four enumerated programs includes the 

provision of preferential credit capital 

through more than just the VDB. The 

plan includes no language linking the 

reference to ‘‘preferential credit capital’’ 

to the VDB, and does not even imply 

that the use of ‘‘preferential credit 

capital’’ is limited to funds from the 

VDB. The VDB is only mentioned once 

as one of several GOV agencies that are 

instructed to advance the goals of the 

plan through their coordinated efforts. 

As discussed above, other evidence on 

the record indicates that SOCBs are 

required to provide credit to priority 

industries and activities. 

In addition to being a subsidy specific 

to the plastics industry, pursuant to 

section 771(5A)(D)(i) of the Act, loans 

from SOCBs, which we determine are 

public entities, constitute financial 

contributions from the GOV pursuant to 

section 771(5)(D)(i) of the Act. See also 

771(5)(B)(i) of the Act. Information 

provided by the GOV in its August 17, 

2009 questionnaire response indicates 

that two SOCBs that lent to respondents 

are public entities given that they are 

almost entirely owned by the GOV: 

Vietcombank and the Bank for 

Investment and Development of 

Vietnam (BIDV).6 The August 17, 2009 

questionnaire response indicates a third 

bank involved in this investigation, 

Indovina Bank Ltd. (Indovina), is also a 

public entity. Indovina is a joint venture 

between Vietin Bank (Vietin), another 

one of the five SOCBs in Vietnam, and 

Cathay United Bank, a Taiwanese bank. 

Vietin owns 50 percent of Indovina. It 

is the Department’s position that it is 

not necessary to conduct further 

analysis to determine whether an SOCB 

(or any state–owned non–bank 

enterprise) is a public entity if the 

government is a majority owner. For 

Indovina, we note that under the Law of 

Credit Institutions, December 12, 1997, 

provided by the GOV as Exhibit 7 of its 

July 8, 2009 questionnaire response, the 

chairman and other members of the 

managing board including the general 

director of the bank must be approved 

by the SBV. In addition, there are 

conditions within Indovina’s Articles of 

Association which provide the GOV 

with an apparent upper hand in any 

dispute between the two partners. See 

Exhibit S1–25 of the GOV’s August 17, 

2009 questionnaire response. (The 

Articles of Association is a proprietary 

document, therefore, the exact terms 

may not be publically disclosed.) Based 

on either of these two factors, the GOV 

is the dominant partner or shareholder. 

Therefore, we preliminarily determine 

that Indovina is a public entity. 

Finally, this program provides 

benefits to the recipients equal to the 

difference between what the recipients 

paid on loans from SOCBs and the 

amount they would have paid on 

comparable commercial loans, pursuant 

to section 771(5)(E)(ii) of the Act. Only 

Fotai and Chin Sheng received loans 

from the GOV SOCBs that were 

outstanding during the POI. In 

determining the amount these 

companies would have paid on 

comparable commercial loans, we 

employed the interest rate benchmarks 

discussed above. We then divided the 

benefits by each company’s total sales. 

On this basis, we preliminarily 

determine the CVD subsidy to be 1.18 

percent ad valorem for Chin Sheng and 

0.21 percent ad valorem for Fotai. 

B. Land Rent Exemption for 

Manufacturers of Plastic Products 

According to the petition, the GOV 

owns all land in Vietnam and uses this 

land ownership to further its industrial 

and economic policies. See June 25, 

2009 New Subsidy Allegations at 2. In 

addition, the petition claims the Plastics 

Plan, discussed above in the context of 

preferential lending, exempts 

companies that invest in ‘‘key 

programs’’ from paying rent for land. 

According to the GOV, the ‘‘mandatory 

respondents did not enjoy any reduction 

or exemption from the payment of the 

amounts applicable to their sub–leases 

or, in the case of Fotai, lease.’’ GOV’s 

August 10, 2009 questionnaire response 

at 14. 

We preliminarily determine that one 

tract of land leased by Fotai is 

countervailable. API and Chin Sheng 

lease their land from private companies, 

who in turn lease their land from the 

GOV.7 Fotai leases two tracts from 

private companies and a third tract from 

the Binh Duong provincial government. 

According to Fotai’s submission, the 

tract leased from the provincial 

government was previously exempt 

from lease fees in its entirety, 

apparently under a now terminated land 

law that provided an exemption for 

certain projects.8 The exemption 

expired for all but that fraction used for 

office space, and, under the superseding 

land law, a new lease rate was 

negotiated in 2006. In May 2007, the 

agreement was amended by the 

province to provide a 30-year extension 

of the terms of the lease. 

According to a decree implementing 

the new land law, Decree No. 142/2005/ 

ND–CP, November 14, 2005, Exhibit 

NSA1–7 of the GOV’s August 10, 2009 

questionnaire response, land rent shall 

be reduced under several specific 

circumstances enumerated in the law, 

and also where the Prime Minister 

determines it is appropriate to do so 

based on the recommendations of 

agency heads and provincial and 

municipal governments. Id. at Article 

15. The GOV’s plastics plan, in turn, 

provides that ‘‘key programs . . . and 

projects relocated out of cities are all 

entitled to enjoy the localities’ 

preferential regimes on land rent 

exemption.’’ Plastics Plan at Article 2. 

The plan then briefly describes three 

key programs (Plastics Plan at Article 2), 

and expands these three programs in a 

list of nine investment fields in an 

appendix. Fotai would appear to qualify 

under one or more of the three programs 

and nine fields. Moreover, Binh Duong 

province, is one of three ‘‘concentrated 

plastic industry zones’’ specifically 

directed in the plastics plan to relocate 

plastic factories from inner cities into 

‘‘industrial parks or clusters.’’9


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City, another one of the three ≥zones≥ referred to 

in the plastics plan. 

10According to the GOV, the FIE exemption 

program was part of a terminated law. Also 

according to the GOV, there is no exemption 

program for industrial zones. 

Thus, we preliminarily determine that 

Fotai’s land rented from Binh Duong 

province was provided by the province 

pursuant to Fotai’s production of 

plastics as referenced under the Plastics 

Plan. While the rate readjustment took 

place in 2006, before the January 11, 

2007 cut–off date, discussed above 

under the ‘‘Date of Applicability of CVD 

Law to Vietnam’’ section, the 

Department finds that the May 2007 

amendment to the agreement, which 

changed its material terms by extending 

its duration to 30 years, constitutes a 

new subsidy provided after the cut–off 

date, which is countervailable. 

We preliminarily determine that the 

provision of land to manufacturers of 

plastic products is specific to the 

plastics industry, pursuant to section 

771(5A)(D)(i) of the Act. We also 

preliminarily determine there is a 

financial contribution under section 

771(5)(D)(iii) of the Act because the 

rented land use rights constitute the 

provision of a good or service. We 

preliminarily determine that a benefit 

exists under 19 CFR 351.511(a) to the 

extent that these rights were provided 

for LTAR. In order to calculate the 

benefit, we first multiplied the 

benchmark land rental rate, discussed 

above under the ‘‘Land Benchmark’’ 

section, by the total area of Fotai’s tract 

at issue. We then deducted the rental fee 

paid by Fotai during the POI to derive 

the total benefit. We then divided the 

total benefit by Fotai’s total sales to 

calculate a countervailable subsidy rate 

of 3.86 percent ad valorem for Fotai. 

C. Corporate Income Tax Exemptions 

and Reductions 

The petition alleged Income Tax 

Preferences for Foreign Invested 

Enterprises (FIEs). In the June 25, 2009 

new subsidy allegations, Petitioners 

alleged a similar program of Discounted 

Corporate Income Taxes for Industrial 

Zone Enterprises. 

We preliminarily determine that API 

was eligible for countervailable income 

tax preferences under the Discounted 

Corporate Income Taxes for Industrial 

Zone Enterprises program, but received 

no benefit during the POI. 

We preliminarily determine that Fotai 

received countervailable income tax 

preferences under the Income Tax 

Preferences for FIEs program. Such 

preferences are specific under section 

771(5A)(D)(i) of the Act because they are 

limited as a matter of law to a group of 

enterprises, FIEs. The preferences are 

financial contributions in the form of 

revenue foregone by the government 

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

and provide a benefit to Fotai pursuant 

to 19 CFR 351.509(a)(1) in the amount 

of tax savings. Specifically, Fotai 

benefited from a reduction in the 

standard corporate income tax rate for 

the tax return filed during the POI (its 

income tax rate under the program will 

change in subsequent years). To 

calculate the amount of the benefit, 

we divided Fotai’s tax savings by its 

total sales. On this basis, we 

preliminarily determine a 

countervailable subsidy rate of 0.17 

percent ad valorem for Fotai. 

Chin Sheng also benefited from a 

corporate income tax rate reduction for 

the tax return filed during the POI. Chin 

Sheng also enjoyed an exemption at the 

same time, further reducing its effective 

rate. We preliminarily determine that 

Chin Sheng received this reduction and 

exemption under a program for new 

investment projects and relocated 

businesses. While such a program was 

not alleged in the petition or in the new 

subsidy allegations, 19 CFR 351.311(b) 

allows the Department to investigate a 

possible countervailable subsidy 

discovered during a proceeding. 

According to Chin Sheng’s August 10, 

2009 questionnaire response at page 6, 

the company received its ‘‘incentive 

tax’’ rate because of its status as a 

‘‘business establishment newly set up 

under investment projects.’’ Chin Sheng 

also references an April 2007 

memorandum it received from the Tax 

Department, Exhibit 7 of the August 10, 

2009 questionnaire response, that 

discusses its tax treatment. The 

memorandum refers to Circular 128/ 

2003/TT–BTC, December 22, 2003 

(Circular 128), a document not 

submitted or discussed by the GOV, but 

which appears to be a terminated tax 

law for domestic enterprises. Chin 

Sheng refers to section E.III.1.1 of the 

circular. However, there is no section 

E.III.1.1. Presumably, Chin Sheng 

intended to cite section F.III.1.1, which 

provides rate reductions and 

exemptions for ‘‘business 

establishments newly set up under 

investment projects and relocated 

business establishments.’’ 

We preliminarily determine that the 

tax reduction and exemption provided 

to Chin Sheng under this program are 

specific to a group of enterprises, 

‘‘business establishments newly set up 

under investment projects and relocated 

business establishments,’’ under section 

771(5A)(D)(i) of the Act. The income tax 

reduction and exemption are financial 

contributions in the form of revenue 

forgone by the government under 

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

provide a benefit to Chin Sheng 

pursuant to 19 CFR 351.509(a)(1) in the 

amount of tax savings. To calculate the 

amount of the benefit, we divided Chin 

Sheng’s tax savings by its total sales. On 

this basis, we preliminarily determine a 

countervailable subsidy rate of 0.51 

percent ad valorem for Chin Sheng. 

D. Import Duty Exemptions for Raw 

Materials 

According to the petition and the June 

25, 2009 new subsidy allegations, 

companies in Vietnam are entitled to 

exemptions from import duties on raw 

materials if they are FIEs or located in 

industrial zones. While both API and 

Fotai are in fact exempt from paying 

duties on imported raw materials, their 

exemptions stem from Article 16 of the 

Law on Import Tax and Export Tax, Law 

No. 45/2005/QH–11, June 14, 2005, 

included as Exhibit 43 of the GOV’s July 

8, 2009 questionnaire response. Article 

16 states that ‘‘§g§oods imported for 

processing for a foreign party which are 

then exported’’ are exempt from import 

duties. Thus, according to respondents, 

their exemptions are not contingent on 

either FIE status or location in industrial 

zones.10

Despite this incorrect identification of 

the nature of the program, such 

exemptions can still constitute 

countervailable export subsidies ‘‘to the 

extent that the §Department§ 

determines that the amount of the 

remission or drawback exceeds the 

amount of import charges on imported 

inputs that are consumed in the 

production of the exported product, 

making normal allowances for waste’’ 

under 19 CFR 351.519(a)(1)(i). Thus, we 

preliminarily determine that API 

received countervailable benefits under 

this program to the extent it imported 

materials not consumed in exported 

products. Such materials were 

identified by API in its July 8, 2009 

questionnaire response. Such 

exemptions are specific as export 

subsidies in accordance with section 

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

they are contingent upon export 

performance. Furthermore, such 

exemptions provide a financial 

contribution in the form of revenue 

forgone under 771(5)(D)(ii) of the Act. 

To calculate the amount of the benefit, 

we summed the amount of duties saved 

on materials imported but not 

consumed in exported products, and 

divided the sum by API’s export sales. 

On this basis, we preliminarily 

determine a rate of 0.20 percent ad 

valorem. 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 74, No. 171 / Friday, September 4, 2009 / Notices 45819 

As noted, Fotai also had imports of 

materials under this program, but it is 

unclear whether all of these materials 

were consumed in the exported 

products. We intend to gather clarifying 

information after this preliminary 

determination. Chin Sheng reported that 

its imports are subject to a zero rate 

under the normal tariff schedule, and, 

therefore, it did not benefit from the 

program. Chin Sheng’s claims are 

consistent with the 2005 Tariff Schedule 

for Vietnam, the latest the Department 

was able to locate in English. However, 

the Department intends to gather more 

information regarding how the GOV 

establishes and verifies which goods are 

consumed in the production of exported 

products and how it reconciles imports 

and exports under these exemptions. 

Because the exemptions received by API 

and Fotai were not linked to FIE status 

or industrial zone location, the GOV 

provided limited information in its 

questionnaire responses concerning 

these exemptions. 

II. Programs Preliminarily Determined to 

Be Not Countervailable 

VAT Exemptions for Equipment for FIEs 

In the June 25, 2009 new subsidy 

allegations, Petitioners claim FIEs are 

exempt from paying VAT on imported 

equipment. We preliminarily determine 

that this program is not countervailable 

because a benefit is not provided under 

the program. 

Under the VAT system described by 

the GOV and company respondents, 

absent an exemption, a company would 

normally pay VAT to suppliers on 

purchases. In turn, the company collects 

VAT from its customer along with the 

sales price. The VAT paid by the 

company to suppliers on purchased 

equipment is called ‘‘input’’ VAT, while 

the VAT the company collects from the 

customer is called ‘‘output’’ VAT. The 

company periodically submits a VAT 

report to the GOV that reconciles the 

two VAT amounts, and passes forward 

to the government only the amount by 

which output VAT exceeds input VAT. 

Conversely, if input VAT exceeds 

output VAT, the government refunds 

the difference to the company. Thus, 

with or without the exemption, the 

company merely passes forward VAT 

collected from its customer (or receives 

a refund); it is the final consumer, not 

the producer, who actually incurs the 

VAT owed to the government. 

The Department has examined similar 

VAT exemptions and rebates in past 

proceedings and has determined that 

the amount of exempted or rebated VAT 

was, in itself, not countervailable within 

the meaning of 19 CFR 351.510 and 19 

CFR 351.517. The Department has 

further determined in these prior cases 

that exempting the tax at the time of 

importation, rather than recovering the 

tax at the time of reconciliation, 

conferred no benefit because of the short 

time difference between the two events. 

See, e.g., Final Affirmative 

Countervailing Duty Determination: 

Certain Hot–Rolled Carbon Steel Flat 

Products From Thailand, 66 FR 50410 

(October 3, 2001) and accompanying 

Issues and Decision Memorandum at 

‘‘VAT Exemptions Under the 

Investment Promotion Act,’’ and Final 

Affirmative Countervailing Duty 

Determination: Dynamic Random 

Access Memory ‘‘DRAM’’ 

Semiconductors from the Republic of 

Korea, 68 FR 37122 (June 23, 2003) and 

accompanying Issues and Decision 

Memorandum at ‘‘Exemption of VAT on 

Imports Used for Bonded Factories 

under Construction.’’ Therefore, based 

on the respondents’ description of the 

program, we preliminarily determine 

the respondents did not benefit from a 

VAT exemption for equipment. 

III. Programs Preliminarily Determined 

to Be Terminated 

Export Bonus Program 

The GOV submitted documents, 

specifically Decision No. 1042/QD– 

BTM, June 29, 2007, Exhibit 39 of the 

GOV’s July 8, 2009 questionnaire 

response, demonstrating this program 

was terminated effective June 29, 2007. 

The GOV also stated the last bonuses 

were granted in 2006 based on exports 

in 2005. Thus, we preliminarily 

determine, in accordance with 19 CFR 

351.526, that the program was 

terminated and the last benefits 

disbursed before the POI of this 

investigation. 

IV. Programs Preliminarily Determined 

to Be Not Used by Respondents 

A. Government Provision of Water for 

LTAR in Industrial Zones 

The petition claims occupants of 

industrial zones are offered special rates 

on water. API provided all of its water 

invoices for the POI along with a water 

rate schedule for the area outside its 

industrial zone. The rates on the 

invoices were identical to the rates on 

the schedule. Chin Sheng also provided 

POI invoices. The rates on its invoices 

are identical to the rate stated by the 

GOV in its August 10, 2009 

questionnaire response. Fotai claimed 

not to have used water in its industrial 

zone location, which was not 

operational during the POI. The GOV 

stated that the rates paid in all 

industrial zones in which the three 

respondents have facilities are identical 

to the rates charged in the surrounding 

regions. Therefore, because there is no 

evidence of preferential pricing, we 

preliminarily determine that this 

program is not used. 

B. Preferential Lending for Exporters 

C. Export Promotion Program 

D. New Product Development Program 

E. Income Tax Preferences for Exporters 

F. Income Tax Preferences for FIEs 

Operating in Encouraged Industries 

G. Import Tax Exemptions for FIEs 

Using Imported Goods to Create Fixed 

Assets 

H. Import Tax Exemptions for FIEs 

Importing Raw Materials 

I. Provision of Land Use Rights in 

Industrial Zones For LTAR 

J. Land Rent Reduction or Exemption for 

FIEs 

K. Exemption of Import Duties on 

Importation of Fixed Assets for 

Industrial Zone Enterprises 

According to the petition and the June 

25, 2009 new subsidy allegations, 

companies in Vietnam are entitled to 

exemptions from import duties for 

equipment if they are FIEs or located in 

industrial zones. API and Fotai reported 

they are eligible for such exemptions 

because of their location in industrial 

zones. API also reported it is eligible for 

such exemptions because, under a now 

terminated law, it exports more than 80 

percent of its sales; its preference 

apparently surviving under a 

grandfathering or transition clause. Chin 

Sheng reported it did not participate in 

any program providing duty exemptions 

for imported equipment. 

After applying the ‘‘cut–off’’ date 

discussed above under the ‘‘Date of 

Applicability of CVD Law to Vietnam’’ 

section, we preliminarily determine 

Fotai had no equipment import 

exemptions after the cut–off date. API 

had no equipment import exemptions 

during the POI and its equipment 

import exemptions prior to the POI were 

not greater than 0.5 percent of relevant 

sales. Therefore, benefits for these 

imports were expensed prior to the POI 

in accordance with 19 CFR 

351.524(b)(2). 


srobinson on DSKHWCL6B1PROD with NOTICES
45820 Federal Register / Vol. 74, No. 171 / Friday, September 4, 2009 / Notices 

11Pursuant to 19 CFR 351.204(d)(3), the 

Department must also exclude the countervailable 

subsidy rate calculated for a voluntary respondent. 

In this investigation, we had no producers or 

exporters request to be voluntary respondents. 

L. Exemption of Import Duties for 

Imported Raw Materials for Industrial 

Zone Enterprises 

M. Accelerated Depreciation for 

Companies in Encouraged Industries 

and Industrial Zones 

N. Losses Carried Forward for 

Companies in Encouraged Industries 

and Industrial Zones 

Verification 

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

the Act, we intend to verify the 

information submitted by the GOV and 

the company 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. We 

preliminarily determine the total 

estimated net countervailable subsidy 

rates to be: 

Exporter/Manufacturer Net Subsidy Rate 

Advance Polybag Co., 

Ltd. ............................ 0.20% (de minimis) 

Chin Sheng Company, 

Ltd. ............................ 1.69% 

Fotai Vietnam Enterprise Corp. ................ 4.24% 

All Others ...................... 2.97% 

Sections 703(d) and 705(c)(5)(A) of 

the Act state that, for companies not 

investigated, we will determine an all 

others rate by weighting the individual 

company subsidy rate of each of the 

companies investigated by each 

company’s exports of subject 

merchandise to the United States, 

excluding any zero and de minimis rates 

and any rates based solely on the facts 

available.11 In this investigation, Chin 

Sheng and Fotai’s rates meet the criteria 

for the all others rate. Notwithstanding 

the language of section 705(c)(1)(B)(i)(I) 

of the Act, we have not calculated the 

all others rate by weight averaging the 

rates of the Chin Sheng and Fotai 

because doing so risks disclosure of 

proprietary information. Therefore, for 

the all others rate, we have calculated a 

simple average of the two firms’ rates. 

In accordance with sections 

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

for products both produced and 

exported by API, which has a de 

minimis rate, we are directing CBP to 

suspend liquidation of all entries of 

PRCBs from Vietnam 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. 

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 non– 

privileged 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)(B) 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. Unless 

otherwise notified by the Department, 

case briefs for this investigation must be 

submitted no later than 50 days after the 

date of publication of the preliminary 

determination. See 19 CFR 351.309(c) 

(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. 

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 

tentatively 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, N.W., 

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, 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 number; (2) the 

number of participants; and (3) a list of 

the issues to be discussed. Oral 

presentations will be limited to issues 

raised in the briefs. 

This determination is issued and 

published pursuant to sections 703(f) 

and 777(i)(1) of the Act. 

Dated: August 28, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

[FR Doc. E9–21427 Filed 9–3–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

National Institute of Standards and 

Technology 

International Code Council: The 

Update Process for the International 

Codes and Standards 

AGENCY: National Institute of Standards 

and Technology, Commerce. 

ACTION: Notice. 

SUMMARY: The International Code 

Council (ICC), promulgator of the 

International Codes and Standards, 

maintains a process for updating the 

entire family of International Codes 

based on receipt of proposals from 

interested individuals and organizations 

involved in the construction industry as 

well as the general public. The codes are 

updated every three years (2009— 

current edition, 2012, 2015 editions, 

etc.). In the past, the codes were 

updated on 2–18 month cycles, with an 

intervening supplement between cycles. 

Starting with the 2009/2010 Cycle, ICC 

is transitioning to a development cycle 

where there will only be a single cycle 

of code development with the codes 

split into two groups. For each group of 

codes, there are two hearings for each 

code development cycle; the first where 

a committee considers the proposals 

and recommends an action on each 

proposal and the second to consider 

comments submitted in response to the 

committee action on proposals. 

The purpose of this notice is to 

increase public participation in the 

system used by ICC to develop and 


srobinson on DSKHWCL6B1PROD with NOTICES